The United Arab Emirates (UAE) was formed in 1971 as a Federation of the Emirates of Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, and Fujairah. In Arabian Peninsula, having its shores alongside the Arabian (Persian) Gulf and the Gulf of Oman, it merges with the Arabian Sea. Being in between Asia and Europe, it is a natural port and a center for various imports and re-exports. The UAE Federal Maritime Law of 1981 (the Maritime Law) was publicized to govern all maritime issues throughout the UAE. This article will explore the Law of Arrest in Shipping Matters in the country under the Maritime Law.
Definition of ‘ship’ or ‘vessel’: What objects or property may be arrested?
Article 11 of the Maritime Law defines the term ‘vessel’ as: “any structure normally operating, or made to operate, in navigation by sea, without regard to its power, tonnage or the purpose for which it sails, and/or hovercraft used for commercial or non-commercial purposes, and/or all the appurtenances of a vessel necessary for the operation thereof, or as shall be deemed to be part of the vessel and the same nature.”
However, under the UAE law, a vessel that is not automated is not considered as a ‘vessel’, and thus petroleum installations are not considered vessels.
What laws govern ‘Vessel’ Arrest in the UAE?
In UAE, there is a difference between ‘provisional’ arrest and ‘executory’ arrest. Therefore, regarding a maritime debt, Law 26 of 1981, of the UAE Federal Maritime Law (FML), allows for a right of arrest, commonly known as a “provisional relief”. This law issues and controls the arrest of vessels. The regulations relating to provisional arrest are mentioned in Articles 115-122 of the law. Get in touch with us to know more.
Types of claims for which a ‘ship’ or ‘vessel’ are arrested?
- Destruction suffered by a vessel due to accidents.
- Death or personal trauma resulting from the container and its usage.
- Assistance and salvage.
- Contracts regarding the use or exploitation of the vessel under a charter party or otherwise.
- Contracts involving the carriage of goods under a charter party, bill of lading, or other documents.
- Loss or damage of goods and chattels carried by the container.
- General average.
- Chattels or pilotage of a vessel.
- Reserves of products or necessary equipment for the maintenance or operation of the ship.
- Construction, repair, or supply of a vessel and port dues.
- Payment made by the master, shippers, charterers, or agents on account of the vessel or account of the owner.
- Salary of the master, officers, and crew, and other persons working on board the ship under an agreement of maritime job.
- Disagreements over the ship’s ownership rights.
- A disagreement in relation with the co-ownership of the vessel, or with the possession or use, or with the right to the gains arising out of use.
- Maritime overdraft.
What is Sister Ships Arrest?
According to Article 116 of the Maritime Law, a claimant can arrest not only the vessel in question but also any vessel that seems to be owned by the defendant at the time of claim. But since the UAE courts are not interested in revealing the corporate figures who own those sister ships; therefore, they cannot be arrested. There is no right to suspend other vessels owned by a defendant in the following scenarios:
- If there is a disagreement regarding the ownership of the ship,
- If there is disagreement regarding co-ownership of the ship, or its possession, or the rights to the gains earned from its use,
- A maritime mortgage
- If the decease hired the ship
What is the procedure for vessel arrest?
The claimant needs to submit an ex-parte written application to the civil court ruling over the port where the ship is arrested. This application along with all relevant documents regarding the claim, form the prima facie proof of the maritime debt. The claimant needs to prove that the debt is a ‘maritime debt’ according to Article 115 of the Maritime Law. The Court examines all the documents and decides whether to grant or not a provisional solution, often without considering the Counsel. The Court may ask for counter security from the claimant in the form of a bank guarantee. This guarantee should be equal to the claim amount.
What are the documentary pre-conditions to an arrest?
Apart from the above, the Court will also require the following from the claimant:
- A pledge to pay all official fees and expenditure in connection with the pulling and moving of the vessel suspected to be under arrest.
- A promise to pay all the official amounts due to the crew.
- A pledge to pay the owners of the vessel for any damage or delay that may arise from the arrest of that vessel, in the case proved innocent by the Court of law.
What are all documents required for the arrest?
All the documents mentioned below need to be translated into Arabic by a certified legal translator.
- A legalized and notarized Power of Attorney (POA)
- All relevant documents highlighting the maritime debt
- Proof that the ship is owned by the defendant or is a sister ship
- Payment of court fees (3.75% of the claim amount)
- Proof that the ship is in territorial waters
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Which courts can deal with vessel arrest?
The competency of a court is explained in Article 122 of the Maritime Code. According to the Article, the civil Court under whose governance the arrest took place, shall have all the rights on the case, irrespective of the flag on the vessel, if:
- The claimant’s residence or office is in UAE,
- The maritime debt emerged in UAE,
- The liability originated during the voyage due to which the vessel got arrested,
- The maritime debt arose due to an accident over which the Court has its jurisdiction, and
- The claim is protected by a naval mortgage over the captured vessel.
What are other substantial costs and advances for court proceedings and custody?
Suit: According to Article 285 of the Civil Procedure Code, the claimant should file a lawsuit within eight days once the arrest order is approved. Failing to do so, will result in an arrest lapse.
Court Fees: Court fees are payable for initiating action before the Court of First Instance. Its value depends on the claim amount. The maximum fee in a particular Emirate case can go up to AED 40,000/- in UAE.
Lawyers’ Fee: The licensed lawyers practicing in the UAE usually charge 10% of the claim amount as their fees. However, this percentage decreases as the claim amount increases.
Service of order: Once granted, the vessel arrest order is served by the court bailiff and the port authority. The copies of the arrest order need to be submitted to the owner of the vessel or his deputy and the port authority where the ship is arrested.
Appeal: An interlocutory appeal and the order of release will be a time-taking process; hence it is best to provide security to facilitate the vessel’s release.
Maintenance: The arrest-seeking party needs to bear all kinds of maintenance, repair, port fees, towage, and crew charges. These costs need to be mentioned in the arrest application.
Bail: According to Article 118 of the law, a competent civil court can lift the order of arrest once security and other surety are provided, equivalent to the claim amount.
These legal procedures are time-consuming, energy-straining, and highly expensive. Thus, the critical role is of the legal consultant who takes up the case, guides in the best direction, find solutions and alternatives, and processes and pulls off the case as required.