The commercial maritime law in the United Arab Emirates is regulated and enforced by Federal Law No. 26 of 1981 (Maritime Code).
A brief snapshot of some key features of the Maritime Code are set out below, which have implications for maritime trade and commerce.
Registration of Vessels
Vessels having UAE nationality are required to be registered with the Maritime Inspection Department under Article 18. There are exceptions to this requirement, with fishing boats, pleasure boats, or boats used in commerce, having tonnage less than 10 tons, not required to register with the authority.
Operating a vessel which flies the UAE flag but is not registered under the Maritime Code is punishable with imprisonment of up to 1 year or fine of up to AED 50,000 or both. The vessel may also be confiscated under Article 44.
Cargo Contracts & Losses
The Maritime Code regulates the contract of goods over maritime transport. Article 256 /1 defines a contract of maritime transport as follows.
A contract of maritime transport is a contract whereby the carrier undertakes to carry goods from one port to another in consideration of a freight that the shipper is obliged to pay.
This contract is proved by a bill of lading which must contain details of the carrier, shipper and consignee, the goods being shipped, port of departure and arrival, name and nationality of the ship, freight charges and method of calculation, place and date of issuance of the bill, number of copies and signatures of the captain and shipper.
The carrier is liable for losses or damages incurred to the goods from the time of receipt of goods till delivery (with exceptions set out under Article 275). That said, the liability of carrier is limited to AED 10,000 for each package or AED 30 for each kilogram of the weight of goods, whichever is higher, unless the parties have agreed on a higher limit of liability under Article 276/4 of the Maritime Code.
Collision of Vessels
Default by one of the vessels leading to a collision would result in the defaulting vessel compensating the non-defaulting vessel for the damage caused under Article 320 of the Maritime Code.
However, Article 321/1 clarifies that in case the default is of more than one party, the liability of each vessel would be estimated based on the proportion of default of the defaulting vessels.
Arrest of the Vessel
A vessel could be arrested by an order of the civil court having jurisdiction solely on the ground of satisfaction of maritime debt.
A maritime debt has been defined under Article 115 of the Maritime Code as a claim in respect of a right arising out of any the following causes:
- Damage caused by the vessel by reason of a collision or otherwise
- Loss of life or personal injuries occasioned by the vessel and arising out of the use thereof.
- Assistance and salvage.
- Contracts relating to the use or exploitation of the vessel under a charter party or otherwise
- Contracts relating to the carriage of goods under a charter party, bill of lading, or other documents.
- Loss of or damage to goods or chattels being carried on board the vessel
- General average.
- Towage or pilotage of the vessel.
- Supplies of products or equipment necessary for the utilization or maintenance of the vessel, in whichever place the supply ismade.
- Construction, repair or fitting out of the vessel, and costs of it being in dock.
- Sums expended by the master, shippers, charterers or agents on account of the vessel or on account of the owner thereof.
- Wages of the master, officers and crew, and other persons working on board the vessel under a contract of maritime employment.
- A dispute as to the ownership of the vessel
- A dispute in connection with the co-ownership of the vessel, or with the possession or use thereof, or with the right to the profits arising out of the use thereof.
- A maritime mortgage
The order of arrest can be set aside by the civil court if a guarantee or any other security which is sufficient to satisfy the debt is presented before the court under Article 118/2 of the Maritime Code. That said, where the maritime debts relate to the dispute as to ownership, co-ownership, possession, use or right to profits arising out of the use of the vessel, the order of arrest may not be set aside. An arrested vessel is forbidden to sail.
Maritime jurisprudence is constantly evolving as the UAE grows into one of the biggest locations for maritime operations and follows international best practices and standards for governing maritime matters.