United Arab Emirates: Shipping Comparative Guide

1 Legal framework

1.1 Which legislative and regulatory provisions govern the shipping sector in your jurisdiction?

The shipping laws in the United Arab Emirates are codified and enacted in Federal Law 26/1981 Concerning Commercial Maritime Law ('Maritime Code'). The Maritime Code is a self-contained law which deals various aspects of shipping, such as:

• ownership and registration;
• rights in rem of the vessel;
• maritime liens (debts);
• vessel mortgage;
• ship arrest;
• the obligations and rights of the master, crew, owner and operator;
• chartering of the vessel (voyage, time charter and bareboat charter);
• bills of lading;
• piloting and towage of the vessel;
• maritime incidents (collision, assistance and salvage, common maritime average); and
• marine insurance.

The UAE maritime laws are supported by other laws, such as Federal Law 24/1999 on the Protection and Development of the Environment, which is an extensive body of law dealing with environmental protection and the prevention and control of pollution. In general, and among other laws, the Federal Law 5/1985 on Civil Transactions (Civil Code) and the Federal Law 18/1993 Issuing the Commercial Transactions Law (Commercial Code) are parent laws which govern the civil and commercial transactions associated with shipping.

Further, the laws related to shipping in the United Arab Emirates are implemented through:

• federal decrees;
• UAE Cabinet resolutions;
• circulars issued by the Federal Maritime Authority; and
• marine notices issued by individual port authorities in the United Arab Emirates.

While the federal laws apply throughout the United Arab Emirates, each of the seven emirates is also free to enact its own local laws and regulations within its jurisdiction.

1.2 Which bilateral and multilateral instruments on shipping have effect in your jurisdiction?

The United Arab Emirates is a signatory to various international conventions of the International Maritime Organization (IMO). The provisions of these conventions so ratified by the United Arab Emirates are given force in the United Arab Emirates through local laws. Article 8 of the Maritime Code expressly states that the provisions of the Maritime Code will not violate the international agreements ratified by the state. Thus, the spirit of the United Arab Emirates is to implement the ratified international conventions in their spirit and form, and thereby avoid any conflict with the corresponding provisions of local laws.

The United Arab Emirates is also a member of the Gulf Cooperation Council for the Arab States of the Gulf (GCC) established in 1981 for the purpose of coordination, cooperation and integration of the Arab Nations. In pursuance thereof, United Arab Emirates has implemented into its local laws treaties such as the GCC Code (GCC Safety Regulations for Cargo Ships not covered by the provisions of IMO Conventions and for Small Passenger Ships carrying less than 200 Passengers) and the GCC Port Regulations, which have the force of law.

With regard to the enforcement of foreign judgments and arbitration awards, which play a significant role in the commerce of shipping, the United Arab Emirates is a signatory to:

• the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958;
• the GCC Convention for the Execution of Judgments, Delegations and Judicial Notifications, 1996; and
• the Riyad Arab Agreement for Judicial Cooperation, 1983 (the Riyadh Convention).

These instruments establish a framework for ease of enforcement of such foreign judgments and awards in the United Arab Emirates.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

While the applicable laws and regulations are implemented through the administration of justice and in the process of adjudication of disputes by the UAE courts, bodies such as the following play a significant role in enforcing the applicable laws and regulations related to shipping by way of notices, circulars, Cabinet resolutions and similar:

• the Ministry of Energy and Infrastructure;
• the Ministry of Defence;
• the Ministry of Climate Change and Environment; and
• the competent authorities designated by the ministries, such as:
• • the Federal Maritime Authority; and
  • the port authorities of the United Arab Emirates (eg, the Abu Dhabi Ports Authority, the Dubai Ports Authority, the Fujairah Ports Authority and the Sharjah Ports Authority.

1.4 What is the regulators' general approach in regulating the shipping sector?

The applicable laws and regulations related to the shipping sector are implemented through various government bodies and the UAE authorities are strict in this sense. Non-compliance with these laws and regulations can attract potential fines and, in some cases, even penal actions.

2 Registration

2.1 What types of vessels may be registered in your jurisdiction? What requirements and restrictions apply in this regard? Is dual registration permitted?

With regard to the registration of vessels in the United Arab Emirates, Article 11 of the Maritime Code defines a 'vessel' as any structure normally operating, or set for the purpose of operating, in the field of maritime navigation, regardless of its power, tonnage or the purpose of navigation thereof. Hovercraft used for commercial or non-commercial purposes are also considered vessels. Vessels falling within this definition must be registered in the United Arab Emirates and may not sail while flying the flag of the United Arab Emirates unless registered in accordance with the applicable laws. The following are exempt from registration:

• fishing boats;
• pleasure boats;
• boats used in commerce for which the total tonnage does not exceed 10 tons; and
• lighters, barges, tugs, cranes, dredgers, diving boats and other floating structures operating within the state (Article 18 of the code).

A vessel registered in the ports of the United Arab Emirates acquires the nationality of the United Arab Emirates and can only be owned by natural or legal persons with UAE nationality. If the vessel is jointly owned by a number of persons, all such persons should be UAE nationals. If the owner of the vessel is a joint liability company, all shareholders must hold UAE nationality. In the event of a limited partnership:

• all jointly liable partners must hold UAE nationality; and
• at least two-thirds of the capital must be owned by persons holding UAE nationality.

In the event of a limited liability company:

• at least 51% of the capital must be owned by persons holding UAE nationality; and
• the directors must be of UAE nationality.

In the event of a speculative partnerships (under Islamic laws):

• all speculators therein must hold UAE nationality; and
• at least 51% of the capital must be owned by persons holding such nationality.

In the event of a joint stock company:

• at least 51% of the capital must be owned by persons holding UAE nationality; and
• the majority of the members of the board of directors, including the chairman, must hold UAE nationality (Article 14 of the code).

Further, pleasure vessels owned by foreigners residing in the United Arab Emirates may not be operated until they are registered in the register of vessels. If the vessel is used for purposes other than pleasure, the license shall be revoked (Article 26 of the code).

Dual registration is not permitted in the United Arab Emirates.

2.2 What entities may register a vessel in your jurisdiction? What requirements and restrictions apply in this regard?

UAE flagged vessels are registered by the Federal Maritime Authority (FMA), which is the UAE national ship registry.

Prior to registration of a vessel in the United Arab Emirates, for the purpose of assessment of the total net tonnage, the vessel is measured, in accordance with the rules and procedures of measurement set out by the FMA, for determining the dimensions of the vessel and its characteristics and specifications. To this effect, in case of vessels earlier registered in another flag state, the FMA will accept a certificate of measurements and specifications issued by an accredited classification society. In case of a vessel newly constructed and not yet registered, the applicant for registration must submit a certificate of measurement from the yard or the entity which supervised the construction (eg, classification society) (Article 23 of the Maritime Code).

Arabic is the official language of the United Arab Emirates. Therefore, if the accompanying documents to an application for registration of the vessel are in any foreign language, such documents must be duly legalised in the country of origin and translated into Arabic by sworn/official translators in the United Arab Emirates.

2.3 What body administers the shipping register in your jurisdiction?

The FMA, a department of the Ministry of Energy and Infrastructure administers the shipping register in the United Arab Emirates.

2.4 What information is included in the shipping register? Is this publicly accessible?

An application for registration of a vessel must contain the following data (Article 27) and the same is included in the UAE shipping register (Article 21):

• the name of the vessel;
• the former names of the vessel and the last port of registration;
• the date and place of construction of the vessel, and the name and address of the factory or dock of construction;
• the type, tonnage and dimensions of the vessel;
• the name, surnames, occupations and religion of the owners;
• the nationalities and places of residence of the owners, together with the share of each and the adopted majority to be followed in all matters relating to the mutual interests of the shareholders;
• the name, type and head office of the owning company names and nationalities of the members of the board of directors, managers and speculators (in case of speculative partnership), and the shareholding structure;
• the name, nationality, address and maritime qualifications of the master of the vessel;
• the name, nationality and address of the operator of the vessel;
• the mortgage, if any, with the date thereof, the name, surname, occupation, nationality and place of residence of the mortgagee creditor; and
• any attachments which have been effected upon the vessel and all data related thereto.

There is no public access to the ship registry. Further, in the United Arab Emirates, there is no right to information as may be found in certain other jurisdictions.

2.5 What are the formal and documentary requirements for registration of a vessel? What is the process for registration? What is the effect of registration? What is the effect of deregistration?

The documentary requirements vary slightly for commercial vessels and pleasure vessels. In general, an application for registration of a vessel should be accompanied by:

• the original vessel invoice.
• the emirates national ID for individuals and/or a valid UAE company trade licence in case of a legal person;
• a UAE Chamber of Commerce membership certificate;
• the company memorandum of association;
• documents of the authorised signatory representing the individual or legal person;
• documents to prove ownership of the ship (eg, purchase invoice attested by the Chamber of Commerce and Industry or a bill of sale attested by the UAE courts). In the case of a ship purchased from outside the United Arab Emirates where the bill of sale is issued outside the United Arab Emirates, the bill of sale must be legalised/attested at the country of origin and by such country's Ministry of Foreign Affairs and the UAE embassy therein. In case of a new ship built in a foreign country, the building certificate must be similarly legalised/attested;
• where the vessel has previously been registered in a foreign registry, a verifiable original or electronic ship deletion certificate obtained from such foreign ship registry;
• a valid establishment card of the UAE company which evidences that the company is entitled to employ staff from foreign countries;
• valid statutory certificates of the vessel; and
• vessel insurance.

The vessel is registered through the web portal of the UAE Ministry of Energy and Infrastructure.

Upon registration, the vessel acquires the nationality of the UAE state (Article 14 of the Maritime Code) and the vessel will be subject to an annual tax of AED 2 per ton of the vessel's total tonnage. This tax is payable as of 1 January each year (Article 43 of the code). Further, the provisions of criminal law in force in the United Arab Emirates will apply to crimes committed onboard a UAE flagged state vessel (Article 17 of the code).

In case of deregistration of the vessel, the vessel loses its UAE nationality. The certificate of ship registration must be returned to the registry, which will delete the registration of the vessel from the register of vessels (Article 38 of the code). However, the documents pertaining to the registration must be kept by the registry for a period of 25 years from the date of deletion (Article 39 of the code)

If the vessel operates under the UAE flag without registration, the operator/owner may be sentenced to imprisonment for a period not exceeding one year, fined up to AED 50,000 or both. In addition, the vessel may be confiscated (Article 44 of the code).

2.6 What are the formal and documentary requirements for registration of a shipping mortgage? What is the process for registration? What is the effect of registration? What is the effect of deregistration?

Any vessel with total tonnage exceeding 10 tonnes may be mortgaged (Article 97 of the Maritime Code), even if the vessel is still under construction (Articles 101 and 102 of the code). The mortgage must be executed by way of an official deed; otherwise, it will be void (Article 99 of the code). A mortgage on a vessel must be registered with the ship registry in the port of registration of the vessel.

The following documents are required for a mortgage on a UAE flagged commercial vessel:

• a letter from the creditor (the mortgagee) stating a mortgage entry on the ship;
• a letter of authorisation of the signatory for the mortgage;
• the original mortgage contract attested by a notary public and, if the mortgagee creditor is outside the country, attested by the Ministry of Foreign Affairs of that country, as well as by the UAE embassy and the UAE Ministry of Foreign Affairs; and
• the original registration certificate of the vessel which is the subject matter of the mortgage.

In order to register the mortgage, the above documents should clearly contain the following information (Article 103 of the code):

• the name, surname and nationality of the debtor and creditor, and their places of residence and occupations;
• the date and type of contract;
• the amount of the debt shown in the contract (if the mortgage is to be effected against more than one vessel, the schedules of the mortgage deed must specify the amount of the debt related to each of the vessels; and if the mortgage is against a vessel or other property, the schedules must specify the amount of the debt secured by the vessel);
• the conditions relating to interest on the debts, if any, and the conditions of settlement;
• the name and description of the mortgaged vessel;
• the date and number of the certificate of registration, or if the vessel is being constructed, the vessel's construction report from the competent maritime authority in whose jurisdiction the vessel is being constructed and registration number thereof in the register of the place of construction; and
• the address of the creditor within the area of the ship registry in which registration is made.

Registration of a shipping mortgage on a UAE flagged vessel is by way of an online application through the web portal of the UAE Ministry of Energy and Infrastructure.

Effects of registration/deregistration of mortgage: Once the mortgage is registered, the registry in which the mortgage has been registered will notify all other registries in the United Arab Emirates (Article 104 of the code). A registered mortgage ranks directly after the priority debts on the vessel. Article 84 of the Maritime Code defines the class of priority debts on a vessel. Where debts are secured by two or more mortgages, the debts will rank in the order of the dates of registration of the mortgages. Registration will result in securing the service of the debt for the last two years in addition to the service cost for the current year at the time of knocking down the auction; and such costs will rank in the same order as the principal sum of the debt. A registered mortgage gives cause for an action of arrest of the mortgage vessel for satisfaction of the debt. De-registration of the mortgage means that the creditor-mortgagee has been paid or another security has been provided by the mortgagor. Therefore, deregistration relieves the vessel or any share therein of any debt to the creditor-mortgagee.

3 Port state control

3.1 Which body is responsible for port state control? What powers does it have?

Port state control in the United Arab Emirates is administered by the Federal Maritime Authority (FMA). The FMA is empowered to carry out inspections of the foreign-flagged ships in UAE waters, to determine that they meet the requirements of their certificates and can proceed to sea without danger to the ship, the environment and the persons onboard. If a ship does not meet these requirements, the FMA has the power not to allow the vessel to leave UAE waters and proceed to sea (except for proceeding to the nearest yard for immediate repairs carried out to the satisfaction of the FMA and/or the class of the vessel) without danger to the ship or persons on board. The FMA may also impose fines on the vessel for violation of the applicable laws, rules and regulations.

3.2 What penalties may be imposed for breach of the applicable laws and conventions?

Depending on the nature of breach of the applicable laws and conventions, the FMA may impose penalties as provided under the UAE Environment Law and the Maritime Code, and as prescribed by the FMA.

3.3 Can decisions of the port state control authority be appealed? If so, what is the process for appeal?

Port state control is administered in the United Arab Emirates through the FMA. In the United Arab Emirates, public bodies may not be sued without leave of the court. If the leave of the court is granted, the process for appeal is as provided in Federal Law 11/1992 on the Civil Procedures Law.

4 Marine casualty

4.1 What key domestic and international provisions apply to marine casualties in your jurisdiction, and what specific considerations should be borne in mind with regard to the following? (a) Collisions; (b) Pollution; (c) Wreck removal; and (d) Salvage.

(a) Collisions

The United Arab Emirates is not a signatory to:

• the International Convention for the Unification of Certain Rules of Law relating to Collisions between Vessels (Brussels Collision Convention);
• the International Convention for the Unification of Certain Rules relating to Civil Jurisdiction in matters of Collision (Brussels, 10 May 1952); or
• the International Convention for the Unification of Certain Rules relating to Penal Jurisdiction in matters of Collision and other Incidents of Navigation (Brussels, 10 May 1952).

However, the United Arab Emirates has ratified the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGs), which has the force of law in UAE domestic waters.

The law relating to collisions of maritime vessels and boats is codified in Articles 318 to 326, Chapter 1 of the Maritime Code. The provisions with regard to liability apply to collisions in UAE domestic waters and are very similar to those contained in the Brussels Collision Convention. A vessel is liable to compensate for damages resulting from a collision if such collision arises from an error of the vessel. The same liability principles apply to collisions caused by error of the pilot, even if the piloting is compulsory. As an exception to this rule, if the collision arises from a force majeure event or on account of causes which are in doubt or unknown, each vessel will bear its own losses incurred. Therefore, in case of common collision of vessels, the liability of each vessel will be assessed in proportion to the error made by each vessel; however, where the proportion of degree of error cannot be determined, the liability will be apportioned equally between the vessels. Subject to the limits of liability so determined, each vessel will be severally liable for damages occurring to the vessels, the cargo, belongings or moneys of the crew or any other person onboard the vessel. These provisions even apply to vessels involved in a collision incident which are dedicated to public service by the United Arab Emirates or by one of its public bodies or organs.

Further, even if there is no physical or material collision, UAE law provides for compensation for damages caused by a vessel to another vessel or to objects or persons present onboard those other vessels and objects, provided that such damages arose from:

• the movement or the negligent performance of a movement by the vessel; or
• failure to observe the provisions of national laws or ratified international conventions (ie, COLREGS).

As regards jurisdiction with regard to claims arising from a maritime collision, Article 325 of the Maritime Code provides that the claimant may file its claim with:

• the court in whose jurisdiction the defendant resides;
• the court in whose jurisdiction the vessel of the defendant is located;
• the court in whose jurisdiction:
• • the arrest of the damaging vessel of the defendant is made;
  • another vessel owned by the defendant is arrested; or
  • the arrest of the vessel can be effected or the defendant has offered a guarantor or another surety; or
• the court in whose jurisdiction the collision takes place, should it take place within the ports, docks or other areas in the domestic waters thereof.

Claims for compensation arising from a maritime collision are governed by a time bar of two years from the date of the collision incident.

In case of death or injury of a person onboard the vessel, the liability of the vessels will be joint and the vessel paying more than its share as per the limits of proportion of liability will have the right of recourse against the other vessels. These claims of recourse by virtue of this right are governed by a time bar of one year from the date of death.

Claims for compensation due for collisions are deemed to be priority debts on the vessel (Article 84(d)) which attach to the vessel and to the freight for the voyage during which the debt arises. A claim for priority right for securing the compensation for collision against the vessel to which the priority debt attaches is governed by a time bar of one year from the date of occurrence of the damage.

Further, in the case of claims arising from a maritime collision which are made before the UAE courts, Article 82 provides that the state, state entities or public agencies thereof owning, operating or managing the vessel may not rely on the principle of immunity of the vessel.

(b) Pollution

The United Arab Emirates has ratified the following conventions related to marine pollution:

• the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78 (Annexes I to V) and the Protocol of 1997 (Annex VI);
• the International Convention on Civil Liability for Oil Pollution Damage 1969, the Protocol of 1976 and the Protocol of 1992;
• the London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters, 1972 (the United Arab Emirates is not a signatory to the London Convention Protocol 1996);
• the Protocol of 1992 to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971 (the United Arab Emirates is not a signatory to the Fund Protocol 2003);
• the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties, 1969 (the United Arab Emirates is not a signatory to the Intervention Protocol 1973);
• the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001; and
• the International Convention for the Control and Management of Ships' Ballast Water and Sediments, 2004.

Further, the United Arab Emirates is not a signatory to:

• the International Convention on Oil Pollution Preparedness, Response and Co-operation; or
• the Protocol on Preparedness, Response and Co-operation to pollution Incidents by Hazardous and Noxious Substances, 2000.

The provisions of the above conventions on protection of the marine environment are implemented in the United Arab Emirates through local instruments such as:

• Federal Law 24/1999 on the Protection and Development of the Environment;
• Federal Decree 74/2006 on the Adherence of the State to the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78); and
• Federal Law 166/2020 on the Accession of the State to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001.

Further, the provisions of UAE-ratified conventions are strictly implemented by the Federal Maritime Authority (FMA), the port authorities, the Dubai Police Marine Pollution Control Centre and other bodies which are empowered to implement the laws, rules and regulations related to pollution prevention, control and mitigation.

With regard to liability and compensation for environmental damages, the aforementioned Federal Law 24/1999 (Articles 71 and 72) states that any person that intentionally or by way of negligence causes damages to the environment or to others as a result of the breach of the law will be responsible for all costs of treatment or removal of such damages. It will also be held responsible for any compensation incurred as a result, including:

• damages:
• • occurring to the environment itself;
  • prohibiting or reducing the legal use thereof, whether temporarily or permanently; or
  • damaging its economic and aesthetic value; and
• the costs of rehabilitating the environment.

Upon the occurrence of a breach, and if the master or officer of the vessel wishes to leave the port expeditiously, the judicial control officers may collect a temporary immediate sum for the account of the enforcement of the fine or compensation sanction levied within the limits provided by law, provided that this sum does not amount to less than the minimum specified sanction, in addition to all expenses and compensations determined by the competent authorities in order to remove the effects of the breach. A bank guarantee for this sum may be submitted to and accepted by the competent authorities (Article 70). The laws also provide for the imposition of sanctions against a party that is in breach of the provisions of law by way of imprisonment (six months to two years) and fines.

(c) Wreck removal

The United Arab Emirates is not a signatory to the Nairobi International Convention on the Removal of Wrecks, 2007.

However, Article 95 of the Maritime Code empowers the FMA to:

• seize the wreck of the vessel as security for the costs of removing such wreck; and
• conduct an administrative sale thereof by public auction and recover its debt from the proceeds, in preference to other creditors. The balance of the proceeds will be deposited in the FMA treasury for distribution to the vessel's creditors, if any.

Further, to address the issues related to wrecks and abandoned vessels, the UAE Council of Ministers has issued Cabinet Resolution 71/2021 on Marine Wrecks and Violating Ships. The resolution applies to all seagoing vessels of any type or size, regardless of power, tonnage capacity or purpose of navigation. In particular, the resolution (Article 4) stipulates that all national and foreign vessels of over 300 gigatonnes which intend to call in the United Arab Emirates or which are anchored in the UAE waters must hold a valid insurance policy or provide financial security issued by a bank or financial institution to cover responsibility for the removal of wrecks in accordance with the rules and conditions determined by the ministry.

Article 4 of the resolution specifically authorises the shipping agent of the concerned vessel to verify the existence of the insurance or financial security before accepting the agency. Furthermore, if the agent fails to verify the insurance requirements of the vessel, the agent will be responsible for removing the wreck. Even the port authorities and local authorities are authorised to verify the existence of the insurance or financial security before permitting the ship to enter the port or anchor in UAE waters.

(d) Salvage

The United Arab Emirates has ratified the International Convention on Salvage, 1989. The provisions relating to salvage are codified under Articles 327 to 339 of the Maritime Code.

Article 8 of the Maritime Code states that the provisions contained in the code must not violate the international agreements ratified by the United Arab Emirates, and that the provisions of the code will apply to matters for which no special provision exists in matters related to maritime customs not conflicting with the provisions of Islamic Sharia law and the principles of justice.

In case of claims arising from acts of assistance or salvage which are made before the UAE courts, Article 82 provides that the state, state entities or public agencies thereof owning, operating or managing a vessel may not rely on the principle of immunity of the vessel.

Moneys due for assistance and salvage rendered to a vessel are by law classed as priority debts on the vessel. A claim in respect of a right arising from salvage services rendered to a vessel gives an action for arrest of the vessel. A vessel owner may not limit its liability in respect of obligations arising from acts of assistance and salvage (Article 140 of the Maritime Code).

Claims in respect of priority rights for salvage are governed by a one-year time bar, which begins to run from the date of termination of the salvage operation. Lawsuits for claims of remuneration for assistance and salvage are governed by a two-year time bar, which begins to run from the date of the end of the salvage operations (Article 337 of the code).

If the assisting, salvaging and salvaged vessel hold UAE nationality and the assistance or salvage is rendered in UAE waters, the UAE courts will have exclusive jurisdiction over claims arising from such salvage. Every agreement conferring jurisdiction upon a foreign court to examine such claims arising from the assistance or salvage or to refer such claims to arbitration outside the state will be void.

4.2 Which parties may bring a marine casualty claim in your jurisdiction, and against whom?

Any person aggrieved by a marine casualty and with a right to claim is entitled to bring such claims in the United Arab Emirates. Therefore, parties such as the following may bring a claim for compensation arising from a marine casualty against the vessel in default:

• shipowners;
• charterers;
• cargo interests;
• ship crew;
• passengers;
• port authorities;
• salvors;
• suppliers of services and goods in a marine casualty; and
• third-party onshore/offshore entities.

However, unlike in other jurisdictions, in the United Arab Emirates the state cannot be made a party to the legal proceedings.

4.3 What limitation of liability regime applies to marine casualty claims and who may avail of it? What types of claims may be limited?

As followed in most jurisdictions, in the United Arab Emirates the limitation of liability by a shipowner is based on the tonnage of the vessel in question. On 4 August 1997, the United Arab Emirates ratified the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC 76) through Federal Decree 118/1997. Further, on 10 November 2020, the United Arab Emirates ratified the 1996 Protocol to the LLMC 1976 by virtue of Federal Decree 167/2020. The 1996 Protocol entered into force in the United Arab Emirates on 23 May 2021.

The limitation of liability by a shipowner is codified under Articles 138 to 142 of the Maritime Code. The limits of liability are provided in Article 141. These legal provisions are similar in principle to those provided in the International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships, and Protocol of Signature (Brussels, 10 October 1957)

As per Article 145 of the Maritime Code the provisions governing limitation of liability will apply to:

• the operator, charterer, managing operator, master and crew; and
• all other subordinates of the owner, operator, charterer or managing operator, in connection with the performance of their duties under the same conditions as they apply to the owner.

Article 138 entitles the owner of the vessel to limit its liability in respect of claims arising from:

• death or injury of any person onboard the vessel or on land or at sea;
• loss or damage to property onboard the vessel or any other property;
• obligations imposed by law to raise a wreck, refloat a vessel or raise or break up a sunken, stranded or abandoned vessel, including everything that is onboard; and
• damages caused by the vessel to port installations, docks and navigation lanes.

4.4 How is the limitation fund constituted? What requirements and restrictions apply in this regard?

As the United Arab Emirates has ratified the LLMC 76 and the 1996 Protocol, it is generally understood that a shipowner is entitled to set up a limitation fund in the United Arab Emirates. However, in reality, this is not the case. UAE law does not expressly provide for the establishment of a limitation fund by the UAE courts. On the contrary, the competent authority to constitute the limitation fund is the FMA and there is no legislation put forth by the FMA to facilitate the constitution of a limitation fund.

Moreover, the Maritime Code states that the shipowner 'may' set up a limitation fund, implying that the constitution of the fund is not a legal right of the owner but at the discretion of the UAE courts. As such, there is some uncertainty regarding this body of law. Moreover, there are very few cases in which the UAE courts have had an opportunity to deal in detail with the applicable local laws pertaining to the constitution of a limitation fund.

It is also important to note that – unlike in other jurisdictions, where the letter of undertaking provided by a protection and indemnity club is accepted as security on behalf of the shipowner – in the United Arab Emirates such letters of undertaking are not accepted as a guarantee or a financial security. While bank guarantees may be accepted as a financial security, there is no precedent to suggest that a bank guarantee from a foreign bank is acceptable as against a local UAE bank. Thus, the establishment of a limitation fund by shipowners is hindered by obstacles and uncertainties.

4.5 Under what circumstances is the limitation of liability unavailable?

Article 140 of the Maritime Code provides for an exception to the shipowner's limitation of liability. As per Article 140, an owner may not limit its liability in relation to claims arising from:

• the personal fault of the owner;
• salvage or common average contribution;
• the rights of the master and the crew onboard the vessel; or
• nuclear damage directed against the owner of a nuclear vessel.

Moreover, if the compensation due for death or injury as a result of limitation of liability is less than the blood money payable under Sharia law, the person entitled will have the right to claim the whole sum in accordance with the provisions of local laws (ie, the Penal Code and the Law of Criminal Procedures).

4.6 What defences are available to marine operators in the event of a marine casualty claim?

If a marine operator falls under one of the categories of persons listed in Article 145 of the Maritime Code, it will be entitled to the shipowner's defence of limitation of liability.

In the event of a marine casualty, marine operators in the United Arab Emirates are entitled to be heard before the UAE courts and to request a court to investigate the casualty for determining and ascertaining the facts, evidence and merits of the quantum of losses and damages against the marine operator.

4.7 Which bodies are responsible for investigating and responding to marine casualties? What powers do they have?

The respective port authorities of the United Arab Emirates and the UAE Coastguard are responsible for responding to and investigating marine casualties. In addition, each emirate has its own local bodies for responding to marine casualties (eg, the Critical Infrastructure and Coastal Protection Authority (Abu Dhabi) and the Dubai Police Marine Pollution Control Centre (Dubai)).

These bodies have the power to:

• detain the ship and its personnel; and
• impose fines for violations of any laws and regulations giving rise to the marine casualty.

4.8 What reporting requirements apply in relation to marine casualties and what are the consequences of non-compliance?

With regard to an oil pollution/leakage incident, Article 24 of the Environment Law states that the shipowner, master or any officer of the vessel, the persons responsible for the transportation of oil within the ports or waters of the United Arab Emirates and the officials of parties involved in oil extraction must immediately – and in accordance with the procedures provided for in the implementing regulations – notify the port authorities, coastguards and other competent authorities of:

• any oil leakage;
• the circumstances of the accident;
• the type of leaked substance; and
• the measures taken to stop or control such leakage.

There are no specific or codified reporting requirements in the United Arab Emirates with regard to marine casualties. Each port authority in whose jurisdiction a vessel is present prescribes its reporting requirements and the shipowners/master of the vessel must familiarise themselves with the respective ports or shipyard's reporting requirements. Not reporting a marine casualty may attract potential fines.

4.9 What remedial measures may be ordered in the event of a marine casualty (eg, wreck removal, clean-up)?

In case of a marine casualty involving damage to the environment, the person responsible for the same will be held responsible for removing such damage and for all costs thereof. That person will also be held responsible for any compensation incurred as a result of such damage (Article 71 of the Environment Law).

The compensation for the environmental damage will include:

• damages:
• • occurring to the environment itself;
  • prohibiting or reducing the legal use of the same, whether temporarily or permanently; or
  • damaging its economic and aesthetic value; and
• the costs of rehabilitating the environment.

In the case of a shipwreck, UAE Cabinet Resolution 71/221 on Marine Wrecks and Violating Ships provides that the Ministry of Energy and Infrastructure, upon the recommendation of the Wrecks and Violating Ships Committee, will issue a written warning to the shipowner or operator, the master, the ship agent, the holder or rights of the wreck or a crew member of the wreck or the wreck itself, specifying the action to be taken to remove or recover the wreck or any other action as may be appropriate, within 60 days of the date of delivery of the written notice posted on the wreck. The committee may recommend the assistance of experts and specialists, if required.

If this 60-day period expires and the shipowner or operator has not taken the necessary measures, the ministry, an authorised authority of the ministry or the competent authority may, in accordance with the circumstances, remove and sell the wreck at public auction or by any other means, at the expense of the shipowner or the rights holder of the ship, taking into consideration the requirement for the ministry to notify the flag state if the ship is foreign.

The ministry or the authorised/competent authority will collect all expenses spent to recover the wreck, to handle environmental damages and to reduce marine pollution during removal the wreck by selling the wrecks administratively at public auction once the written warning period has expired, and 15 days after the auction has been advertised in two local newspapers, one of which is published in English.

4.10 Who may conduct salvage operations in your jurisdiction and what other requirements and restrictions apply in this regard?

The United Arab Emirates imposes no restrictions on salvors and allows foreign salvors to assist in case of emergencies. Companies that have a licence for salvage operation/services and a UAE navigational licence in respect of their vessels deployed in salvage operations can carry out salvage operations in the United Arab Emirates.

5 Cargo claims

5.1 What key domestic and international provisions apply to cargo claims in your jurisdiction?

Cargo claims in the United Arab Emirates are governed by the Maritime Code. The treatment of such claims will vary depending on whether they have arisen in respect of:

• goods carried under a bill of lading or a similar document of title; or
• cargoes carried under a contract of affreightment or charterparty of a ship.

In either case, the Maritime Code is a self-contained code which provides for either category of cargo claims.

With regard to cargo claims arising under a bill of lading or a similar document, the United Arab Emirates is not a signatory to the Hague Rules, the Hague-Visby Rules, the Hamburg Rules or the Rotterdam Rules, which specifically deal with such types of cargo carriage. In the United Arab Emirates, these cargo claims are governed by Articles 256 to 288 (Chapter II – The Contract of Maritime Transport) of the Maritime Code. As per Article 287, these claims are governed by a time bar of one year from the date of receipt of the goods or from the date on which delivery should have been completed.

With regard to cargo claims arising under a contract of affreightment or charterparty or the use of the ship, such claims are governed by Articles 135 to 145 (Chapter I – Owner and Operator) of the Maritime Code. That said, the United Arab Emirates ratified the 1976 Convention on Limitation of Liability for Maritime Claims on 4 August 1997 and the 1996 Protocol to 1976 Convention on Limitation of Liability for Maritime Claims on 10 November 2020. Among other maritime claims, these also apply to cargo claims and thus have the force of law in the United Arab Emirates. On the issue of whether the laws contained in the domestic legislation or the ratified conventions will apply, Article 8 of the Maritime Code provides that international conventions which have been ratified by the United Arab Emirates supersede domestic laws and that, consequently, the conventions ratified by the United Arab Emirates will override the provisions under the domestic laws.

5.2 Which parties may bring a cargo claim in your jurisdiction, and against whom?

In the United Arab Emirates, a cargo claim can be brought by a party which has the rights and title to the cargo. In other words, the rightful holder of the bill of lading has the title to sue and may institute proceedings for a cargo claim. This can be:

• the consignee named in the bill of lading;
• the last endorsee, if the bill of lading is made to order;
• the holder of the bill, if the bill of lading is in favour of the holder; or
• the subrogee insurer of the cargo claim along with the subrogor as the co-plaintiff to the suit.

Depending on the nature of the cargo claim, the claimant may bring the claim against parties such as:

• the carrier identified in the bill of lading (ie, the actual carrier or the non-vessel operating common carrier);
• the carrying vessel;
• the shipper;
• consignees or endorsees of the bill of lading;
• stevedores;
• the port;
• forwarding and clearing agents;
• hauliers; and
• container leasing companies.

5.3 What limitation of liability regime applies to cargo claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?

As practised and followed internationally, the United Arab Emirates also has two broad limitation of liability regimes which, in common parlance, are categorised as:

• package limitation, which applies to claims for loss or damage to goods or delivery of the goods carried by sea under a bill of lading or a similar document; and
• global limitation, which applies to all claims (including cargo claims) in connection with a certain incident or occurrence which may arise against shipowners by virtue of the trade of the ships.

Package limitation: Cargo claims falling under this category are governed by Article 276 of the Maritime Code, which entitles the carrier to limit its liability on the basis of package or unit or kilogram gross weight of the goods. As per Article 276(1), the liability of the carrier for losses or damages incurred to goods will be limited to the higher of:

• a sum not exceeding AED 10,000 for each package or unit; or
• a sum not exceeding AED 30 for every kilogram of the gross weight of the goods.

With regard to claims for delay in delivery of goods, Article 285 of the Maritime Code states that the carrier will be liable for the delay, unless it is established that the delay has arisen from a cause from which the carrier is exempted (Article 275 of the Maritime Code). While UAE laws entitle the carrier to limit liability for loss or damage to cargo, such limitation expressly does not extend to delay claims. Therefore, delay claims under a bill of lading are adjudicated by the UAE courts based on the general laws of proof, causation, mitigation and so on. Moreover, while under the above rules, the right to limitation of liability extends to the servants and agents of the carrier, under UAE law, the carrier's agents or third parties are not entitled to the limitation of liability applicable to the carrier. The liability of agents and third parties is determined in accordance with the UAE laws pertaining to agents and subcontractors. There is no specific procedure to avail of limitation of liability for cargo claims arising under a bill of lading or a similar document. A plea by the carrier in its defence submissions identifying the relevant UAE laws before the court will suffice.

Global limitation: Cargo claims (loss or damage to cargo) falling under this category are governed by Article 141 of the Maritime Code and entitle the shipowner to limit its liability on the basis of tonnage of the vessel (the principles are similar to those in the LLMC 1957). As per Article 145 of the Maritime Code, the provisions governing limitation of liability will apply to:

• the operator, charterer, managing operator, master and crew; and
• subordinates of the owner, operator, charterer or managing operator in connection with the performance of their duties under the same conditions as apply to the owner.

Two noteworthy distinctions between the limitation of liability regimes of the international conventions and UAE laws are as follows:

• Under the conventions, the category of claims therein 'shall' be subject to limitation of liability, whereas under UAE law (Article 138(1) of the Maritime Code), the limitation of liability is discretionary (for the court) and not a statutory right; and
• While the 1976 Convention on Limitation of Liability for Maritime Claims provides for the establishment of a limitation fund by the shipowner, UAE law does not expressly provide for this.

Following ratification of the 1976 Convention on Limitation of Liability for Maritime Claims and the 1996 Protocol by the United Arab Emirates, it is generally understood that a shipowner is entitled to set up a limitation fund before the UAE courts. The principles and requirements for setting up a limitation fund have not been exhaustively tested before the UAE courts. There are very few cases to this effect and as such there are practical uncertainties in this area of law.

5.4 Under what circumstances is the limitation of liability unavailable?

With regard to the limitation of liability provided under Article 276(1) (package limitation) of the Maritime Code, Article 276(2) states that the carrier may not avail of limitation of liability against the shipper should the latter provide data, before the occurrence of the loading, details of the nature and value of the goods and the importance attached to the preservation thereof. Thus, the exceptions to limitation of liability in the United Arab Emirates are very limited as compared to those provided under the Hague Rules, the Hague-Visby Rules, the Hamburg Rules and the Rotterdam Rules.

With regard to the limitation of liability provided under Article 141 (global limitation) of the Maritime Code, Article 140 states that the owner may not limit its liability in the following cases:

• events arising from the personal fault of owner;
• obligations arising from acts of assistance and salvage, or from a common average contribution;
• the rights of the master, crew and any other subordinate onboard the vessel or whose work is related to the service of the vessel, as well as the rights of their heirs; and
• claims arising from nuclear damage directed against the owner of a nuclear vessel.

5.5 What defences are available to (a) carriers and (b) shipowners in the event of a cargo claim?

In addition to the defence of limitation of liability, UAE law exempts a carrier or a shipowner in certain instances, as follows.

In the case of cargo claims arising under a bill of lading or similar document, the carrier will not be responsible for losses or damages incurred to the goods should the shipper deliberately give false data related to the nature or value of the goods for the bill of lading. Additionally, as per Article 276(4) of the Maritime Code, by way of a special agreement, the carrier and the shipper may determine an upper limit of liability different from that set forth in Article 276(1), provided that it is not less than that limit. With regard to claims for delay in delivery of goods, Article 285 of the Maritime Code states that the carrier will be exempt from such liability if it is established that the delay has arisen on account of causes set forth in Article 275 of the code.

With regard to shipowners, in the event of a cargo claim arising from the use of the ship, the shipowner will have a right of recourse against the party on whose account the cargo claim arose.

6 Passenger claims

6.1 What key domestic and international provisions apply to passenger claims in your jurisdiction?

The United Arab Emirates is not a party to the Athens Convention on the Carriage of Passengers and their Luggage by Sea, 1974. However, the laws with regard to passenger claims are contained in Articles 288 to 302 (Chapter III – Contract of Transportation of People) of the Maritime Code.

Under Articles 299 and 302, there is a time bar of:

• two years for passenger claims relating to death or personal injury; and
• one year for transportation of the effects of passengers from the date of departure of the passenger from the vessel.

6.2 What limitation of liability regime applies to passenger claims and who may avail of it? What types of claims may be limited? What is the procedure for limiting liability?

Under Article 296 of the Maritime Code, the limitation of liability for passenger claims is available to a carrier in an amount not exceeding the amount of 'blood money' as specified in the Penal Code. Any agreement for limitation of liability of carrier to a lesser limits than stated above will be deemed void (Article 297). The limitation of liability applies only to the carrier identified in the contract of transportation of person as evidenced by means of a document called a 'passenger ticket'. Claims for death or injury of the passenger may be limited.

6.3 Under what circumstances is the limitation of liability unavailable?

Article 296(3) of the Maritime Code states that a carrier may not avail of the limitation of the liability in instances where the occurrence of a fraud or an unforgivable mistake by the carrier or its subordinate is established. Article 296(3) clarifies that an 'unforgivable mistake' is an act occurring recklessly without taking into account the possibility of the occurrence of a damage.

7 Ship arrest

7.1 What key domestic and international provisions apply to ship arrest in your jurisdiction?

Ship arrest procedures in the United Arab Emirates are governed by the Maritime Code read with the civil procedural laws contained in Federal Law 11/1992 on the Civil Procedures Law. The United Arab Emirates is not a signatory to any ship arrest conventions, such as the International Convention Relating to the Arrest of Sea-Going Ships (1952 Brussels Arrest Convention) or the International Convention on the Arrest of Ships (1999 Geneva Arrest Convention).

7.2 For which types of claims is ship arrest available? What requirements and restrictions apply in this regard?

Under the laws of the United Arab Emirates, a vessel can only be arrested for the satisfaction of a maritime debt. In this regard, Article 115 of the Maritime Code provides that the vessel can only be arrested by an order of the competent civil court. Article 115 defines a 'maritime debt' as a claim in respect of a right arising from any of the following causes:

• damage caused by the vessel by reason of a collision or otherwise;
• loss of life or personal injuries caused by the vessel and arising out of the use thereof;
• assistance and salvage;
• contracts related to the use or exploitation of the vessel under a charter contract or otherwise;
• contracts related to the carriage of goods under a charter contract, bill of lading; or other documents;
• loss or damage of goods of belongings carried onboard the vessel;
• common average;
• towage or piloting of the vessel;
• supplies of products or equipment necessary for the use or maintenance of the vessel, in any location of supply whatsoever;
• construction, repair or fitting of the vessel, and costs incurred in dock;
• sums spent by the master, shippers, charterers or agents on account of the vessel or on account of the owner;
• wages of the master, officers and crew, and other persons working onboard the vessel under a contract of maritime employment;
• a dispute regarding ownership of the vessel;
• a dispute pertaining to the common ownership of the vessel, the possession or use thereof or the right to the profits arising from the use thereof; or
• a maritime mortgage.

7.3 Are maritime liens recognised in your jurisdiction? If so, what claims give rise to maritime liens? What is the difference (if any) between arrest of a ship for a maritime claim and a maritime lien?

In the United Arab Emirates, the concept of a maritime lien as defined in the 1926 Liens and Mortgages Convention and the 1993 Liens and Mortgages Convention does not exist. The Maritime Code includes no express provisions with regard to maritime liens. Therefore, a right to arrest a ship in respect of a claim for a maritime lien, which otherwise exists in some other jurisdictions, does not exist in the United Arab Emirates, unless such claim qualifies as a maritime debt as defined in Article 115 of the Maritime Code.

However, Article 84 of the Maritime Code provides for a class/list of debts which are defined as priority debts on the vessels. These priority debts are akin to maritime liens in international practice. Apart from the list as stated in Article 84 of the Maritime Code, a mortgage also constitutes a debt on the vessel and will be ranked after the priority debts. Moreover, as per Article 91 of the Maritime Code, priority debts remain valid even if the vessel is sold to a third party (except in case of judicial sale).

A priority debt is just a priority over other debts on the vessel, and as such creditors cannot arrest the vessel until unless such right is listed in Article 115 of the Maritime Code.

7.4 Under what circumstances is the arrest of sister ships and associated ships available? What requirements and restrictions apply in this regard?

Article 116 of the Maritime Code entitles creditors to arrest not only the vessel to which the Article 115 maritime debts relate, but also any other vessel(s) under the ownership of the debtor at the time of the occurrence of the debt, even if the vessel is ready to sail. However, as per Article 116 (2) of the code, a claimant is not entitled to arrest any vessel other than that to which the debt relates in the case of maritime debts relating to:

• a dispute regarding ownership of the vessel;
• a dispute regarding the common ownership of the vessel, the possession or use thereof or the right to the profits arising from the use thereof; or
• a maritime mortgage.

7.5 Under what circumstances can bareboat and time-chartered vessels be arrested?

Article 117 of the Maritime Code states that if a vessel was chartered to a charterer along with the right of nautical management thereof (eg, a time charterer or bareboat charterer), and if such charterer was solely responsible for a maritime debt relating to the chartered vessel, the creditor may arrest such ship, or any other ship owned by the charterer. Therefore, the right to arrest a vessel exists even where the maritime debt is on the charterer's account.

7.6 What are the formal and documentary requirements for arresting a vessel? What is the procedure and how long does this take? Must a countersecurity be provided? What other costs are incurred?

To initiate legal proceedings in the United Arab Emirates, the claimant must submit an ex parte application, together with the relevant documents and evidence establishing the maritime debt against the defendant, to the competent UAE court with jurisdiction over the port where the vessel is present at the time of the application.

The arrest application should be filed along with:

• documents evidencing the ownership of the vessel (eg, direct ownership, sister vessels);
• a notarised power of attorney of the claimant issued in the name of its attorney(s)/legal representatives; and
• all supporting documents.

If the claimant is based outside of the United Arab Emirates, its power of attorney must be duly legalised at the place of origin and then attested by the UAE embassy at the place of origin. A notarised power of attorney will not suffice to commence proceedings in the United Arab Emirates, unless it is legalised as required and the original (not a copy) of the power of attorney is produced before the court.

Arabic is the official language of the United Arab Emirates. Therefore, court submissions are filed in Arabic. Moreover, if the power of attorney and the supporting documents are in any language other than Arabic, they must be filed along with their Arabic translations prepared by independent sworn/official Arabic translators. The legalisation and translation process takes time and therefore, it is difficult – if not impossible – to initate proceedings under a tight timeframe in the United Arab Emirates.

Procedure for arrest: Once all documents have been duly translated and the power of attorney has been legalised/attested, the statement of claim must be filed before the court in whose jurisdiction the vessel has called, through the court's e-portal. There are no oral hearings in the United Arab Emirates and applications to the civil courts are determined through written submissions. The courts examine the documentary evidence submitted to determine whether the arrest application fulfils the requirements set out in Article 115 of the Maritime Code. It can take about one to two days before the file reaches the judge who undertakes urgent matters (summary proceedings). Accordingly, pursuant to verification of the statement of claim and the supporting documents by the court, it usually takes five to seven days to get a decision on the grant or rejection of the arrest order. If the arrest is granted, the arresting party must file substantive proceedings in the United Arab Emirates or in an appropriate foreign jurisdiction, or commence arbitration proceedings, as the case may be, within eight days of the arrest order, in order to determine the merits of the actual dispute. If it fails to do so, the arrest order will be vacated and the court fees will be confiscated.

Countersecurity: Along with the arrest application, the claimant must file a letter of undertaking to meet the damages incurred by the defendant in case of wrongful arrest. There are no provisions in the Maritime Code setting out the arresting party's obligation to provide countersecurity, so this is at the discretion of the court. However, the court may demand security towards wrongful arrest. For example, the Fujairah court commonly requests some form of financial security equivalent to the full amount of the claim. The security amount is strictly at the discretionary powers of the court. Letters of undertaking of protection and indemnity clubs are not accepted by the UAE courts and the claimant may be required to produce a bank guarantee or similar financial security to meet this requirement.

Further, during the COVID-19 pandemic, there were numerous instances of ships being abandoned by unscrupulous shipowners. To address this disturbing issue, the United Arab Emirates issued Cabinet Resolution 71/2021 on Marine Wrecks and Violating Ships. Article 8(4) provides that if a ship is arrested by the court or another authority, the Ministry of Energy and Infrastructure:

• will request the court or the authority granting the arrest to serve a warning on the shipowner or the operator of the ship; and
• may request that the court or authority which arrested the ship direct the applicant of arrest to:
• • carry out all necessary procedures to cover the requirements of the ship's crew, supplies and fuel;
  • maintain the ship's seaworthiness; and
  • take all measures to correct its condition.
• These expenses will be considered as a debt to the ship.

7.7 What is the procedure to release a ship from arrest and how long does this take? What security must be provided and how is this calculated?

Based on Article 118(2) of the Maritime Code, the court may release the vessel from the arrest upon presentation of a guarantee or other security sufficient to satisfy the debt by the debtor/respondent. However, the security provided to the court to release the vessel does not amount to an admission of liability; nor does it deny the shipowner its right to limit liability. The the ship will not automatically be released, regardless of the provision of security – especially where the dispute relates to:

• the ownership, possession or use of the vessel; or
• the rights to the profits arising from use of the vessel.

In such case the court has the discretion to order that, upon provision of security, the person in possession of the vessel may use it and direct a third party with the management of the vessel during the period of arrest, in such manner and on such terms and conditions as the court determines.

Once security has been provided, it is usual for the ship to be released the same day or the next working day from issuance of the court's order, although the timeframe may vary on case-by-case basis.

7.8 What is the test for wrongful arrest in your jurisdiction?

In order to succeed on a plea for wrongful arrest, the person alleging the same must prove the malicious intention of the arresting party. The UAE courts construe the same in a very strict manner and a very high degree of proof is required to establish malicious intent, which in most cases is nearly impossible to satisfy. That said, in one landmark decision involving wrongful arrest, the malicious intent of the arresting party was proved; we believe this is the only such favourable decision thus far in the United Arab Emirates.

7.9 Are any alternatives to ship arrest available in your jurisdiction?

The Maritime Code (Article 123 to 125) also provides for the attachment of a vessel where:

• the claim of the creditor qualifies as a debt; and
• at least 24 hours' notice by way of an official notice to pay the debt has been served on the vessel by the bailiff.

If the claim relates to a debt other than a maritime debt, the notice must be served on the owner. If the debt is a maritime debt as defined in the Maritime Code, such notice may be delivered to the master or the master's deputy on the vessel. A second copy of the notice must be served on the maritime authority with jurisdiction in the port in which the attachment is effected in order to prevent the vessel from sailing; and a third copy with the registration bureau in that port. If the vessel is a UAE registered vessel, the registration bureau in the port will notify the registry where the vessel is registered in the United Arab Emirates. The debtor against which the attachment is made will not, after registration, have the right to sell or mortgage the vessel.

The notice of attachment will contain a summons to appear before the court in the area in which the attachment took place to hear the judgment ordering the sale. The attachment will be void if the hearing date is fixed earlier than 15 days or later than 30 days from the date of the attachment. If the owner is a foreigner and is not resident within the state or a legal representative, it will be summoned and served in accordance with the provisions set forth in the procedural laws in force in the United Arab Emirates.

Further, a creditor may seek the imposition of provisional seizure of the property (vessel) as provided under Article 111 of the Cabinet Decision 57/2018 on the Regulation of Federal Law 11/1992 on the Civil Procedure. A provisional seizure of the assets (eg, movable, immovable, bank accounts) may be imposed if the creditor fears losing the guarantee of its right in any of the following cases:

• The debtor does not have a stable residence in the state;
• The creditor fears on the basis of serious evidence that the debtor may flee or smuggle or conceal its funds; or
• The debt securities are at risk of being lost

8 Judicial sale of a vessel

8.1 What key provisions apply to the judicial sale of vessels in your jurisdiction?

The laws governing the judicial sale of the vessel are identified in Articles 126 to 134 of the Maritime Code. The sale will be executed in accordance with the general civil procedure laws contained in:

• the Civil Procedure Code (Federal Law 11/1992);
• Cabinet Decision 57/2018 on the Regulation of Federal Law 11/1992 on the Civil Procedure;
• Cabinet Decision 33/2020 (30/04/2020) Amending Certain Provisions of Cabinet Decision 57/2018 on the Regulations of Federal Law 11/1992 on the Civil Procedure Act; and
• Cabinet Decision 75/2021 Amending Certain Provisions of Cabinet Decision 57/2018 on the Regulations of Federal Law 11/1992 on the Civil Procedure Code.

8.2 What is the procedure for judicial sale of an arrested vessel and how long does this take? What costs are incurred?

A court judgment confirming the order of arrest should include:

• an order for sale of the vessel and the conditions thereof;
• the date fixed for the auction; and
• the starting price (Article 121 of the Maritime Code).

The notice of sale of the vessel must be published in a widely circulated local newspaper on the announcement of the sale; and the conditions of sale must be posted in the vessel's registration bureau in the United Arab Emirates and at any other place specified by the Court. The statutory requirements as to the content of such notice is stated in Article 126(3) of the Maritime Code.

Accordingly, the sale of a vessel under UAE law is possible only through a court order. Once the judicial sale has been ordered, the court fixes an opening bid price and publicises the time and place of the sale in the local newspapers.

As per Articles 126(4) and 126(5), the judicial sale cannot take place earlier than 15 days after publication of the sale, but no later than 90 days after issuance of the court order; otherwise, the debtor can apply for the arrest/attachment to be declared null and void.

The sale must be carried out by the court in three sessions held at seven-day intervals. Therefore, as per the Maritime Code, the timeframe for the judicial sale of the vessel is quite predictable.

However, a judgement confirming the order of arrest of the vessel or the order of sale of the vessel may be appealed within 15 days of the date of such judgment (Articles 121 and 130, respectively). It is difficult to advise on the timeframe for appeal proceedings or the costs involved in this regard, which must be assessed on a case-by-case basis.

8.3 How are the proceeds of sale distributed?

The successful bidder must pay the sale price and costs to the court treasury by the day following the auction; otherwise, the vessel will be resold at its expense (Article 129 of the Maritime Code).

Once the funds have been deposited with the court treasury, any opposition to the distribution of the proceeds will be entertained by the court if filed within three days of the sale. Objecting creditors must submit documents evidencing their debts to the clerk of the competent civil court within three days of receiving notice from the seizing creditor or the owner of the attached vessel; otherwise, the proceeds will be distributed without their participation (Article 133 of the Maritime Code).

The proceeds of sale will be distributed in the order of their ranking – that is:

• priority debts on the vessel;
• mortgage claims; and
• other maritime debts (Article 134 read with Articles 84 and 105 of the Maritime Code).

8.4 What is the legal effect of the judicial sale of a vessel?

Article 92 of the Maritime Code provides that all priority rights/debts over the vessel will abate upon the judicial sale of the vessel.

9 Environmental issues

9.1 What key domestic and international provisions apply to shipping emissions in your jurisdiction?

The United Arab Emirates is a signatory to the International Convention for the Prevention of Pollution from Ships 73/78 (MARPOL), and in particular has also ratified Annex VI on Prevention of Air Pollution from Ships. The convention has the force of law in the United Arab Emirates through Federal Decree Law 74/2006. On a general note, the laws relating to the protection of air from pollution are codified in Chapter IV (Articles 48 to 57) of Federal Law 24/1999 on the Protection and Development of the Environment and will apply as may be relevant to shipping emissions.

9.2 What key domestic and international provisions apply with regard to the sulphur content of marine fuel in your jurisdiction?

The United Arab Emirates has ratified Annex VI (Prevention of Air Pollution from Ships) of MARPOL 73/78, which is given the force of law in the United Arab Emirates. Accordingly, the International Maritime Organization (IMO) 2020 sulphur limits incorporated in Annex VI of MARPOL 73/78 apply in the United Arab Emirates. Further, the Federal Maritime Authority (FMA) has issued Circular 11/2019 (Instructions for MARPOL 73/78 Annex VI – Global Fuel Oil Sulphur Limit) which states that from 1 January 2020 onwards, all UAE flagged vessels and foreign flagged vessels entering UAE waters must use fuel oil with a sulphur content that does not exceed 0.50% mass by mass. Exemptions apply to vessels that use alternative measures such as scrubbers or other fuels that comply with the emission levels. The circular further states that as from 1 March 2020, the carriage of non-compliant fuel oil on UAE flagged vessels and foreign vessels entering UAE waters without an approved alternative means of compliance is prohibited.

The sulphur content of fuel oil supplied onboard is confirmed by the supplier's bunker

delivery note (BDN), which must contain the information specified in Appendix V of Annex VI of MARPOL. BDNs must be kept readily available onboard for inspection for at least three years after the fuel oil in question has been delivered onboard. The results of fuel oil sample tests analysed by a laboratory accredited by the FMA will be used by the FMA to establish whether a ship is consuming and/or carrying compliant fuel.

Further, shipowners/operators should also comply with the rules and regulations prescribed in the respective emirates. For example, the Port of Fujairah has issued Notice to Mariners 252/20219, which bans the use of open-loop scrubbers in Port of Fujairah waters; ships must use fuel that complies with the IMO 2020 sulphur cap.

9.3 What key domestic and international provisions apply with regard to ship recycling in your jurisdiction?

The United Arab Emirates is not a signatory to the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships, 2009. However, the Ministry of Energy and Infrastructure has issued Circular 8/2021, which states that it is strictly prohibited to scrap, completely or partially dismantle or recycle any ship in the United Arab Emirates without the shipowner/managers obtaining prior approval from the FMA represented by the Ministry of Energy and Infrastructure. This approval is aimed at verifying the ship documents and ensuring safe, greener and environmentally sound ship scrapping and recycling operations in the United Arab Emirates.

Further, with regard to UAE flagged ships, the Maritime Code states that the owner may not dismantle the ship before the settlement of all debts due to the state in respect of the vessel; if the vessel is encumbered with a mortgage, the content of the mortgagee must also be obtained (Article 69). The owner should also notify the Maritime Department in writing of such dismantling. Unless a permit is issued by the Maritime Department, the shipowner cannot commence dismantling the vessel. Anyone that violates these requirements will be sentenced to a fine not exceeding AED 100,000 (Article 71).

9.4 What other environmental issues and concerns should shipowners and operators be aware of in your jurisdiction? What best practices should they follow?

In addition to complying with the MARPOL requirements, shipowners and operators should be aware that the United Arab Emirates has ratified the Ballast Water Convention 2004 through Federal Decree Law 6/2017 and the convention thus has the force of law in the United Arab Emirates. Accordingly, ships in UAE waters must comply with the local regulations as applicable in the respective emirates so as to manage their ballast water to remove, render harmless or avoid the uptake or discharge of harmful aquatic organisms and pathogens within ballast water and sediments. For example, the Department of Planning & Development – Ports, Customs & Free Zone Corporation, Government of Dubai has issued a circular dated 18 July 2017 which states that vessels intending to discharge ballast water in Dubai ports must send a copy of the ballast water reporting form provided in IMO Resolution A.868(20) signed by the vessel master to the Dubai Port Authority in the 24 hours prior to entering the port. Any contravention of the requirements stated in the circular may result in appropriate sanctions, which may also include the imposition of fines against the violator.

Further, the United Arab Emirates is not a signatory to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 or its Protocol of 2010. However, hazardous and noxious substances are governed by Articles 27 to 31 of the Environment Law, which provide as follows:

• Ships transporting hazardous substances are prohibited from discharging or disposing of any harmful substances or wastes in the marine environment, whether directly or indirectly;
• Ships carrying hazardous substances will be provided with a logbook in which the master or officer of the vessel must note all operations related to the cargo;
• The master of the vessel entering UAE ports must report any hazardous substances onboard the vessel, their types, quantities, locations, origins of shipment and destinations;
• The master or officer of the vessel must take the necessary measures to protect against the effects of pollution in the event of an accident occurring to a ship carrying harmful or hazardous substances which may pollute the marine environment; and
• Ships carrying harmful substances are prohibited from dumping hazardous wastes and pollutants into the marine environment.

Articles 21 to 26 (Section I – Pollution Caused by Marine Transportation Means) of the Environment provide as follows:

• All vessels (whether UAE flagged or foreign) are prohibited from discharging or disposing of oil or oil mixtures in the marine environment;
• The master of officer of the vessel must take sufficient measures to protect against the effects of pollution in the event of an accident occurring to one of the means carrying oil which results or is likely to result in the pollution of the marine environment of the United Arab Emirates;
• In the event of a collision of oil carrying vessels, whether intentionally by a crew member or by mistake or negligence, the master will be responsible for the operations carried out to stop the leakage. The owner and the transporter will jointly bear all expenses of the damages, compensations and control measures carried out as a result of the spillage into the marine environment, coasts and beaches;
• The owner, master or any officer of the vessel must notify the port authorities, coastguards and other competent authorities of any oil leakage upon its occurrence;
• The owner or master of the vessel must maintain an oil record book containing all operations relating to oil; and
• The oil carrying vessels entering the United Arab Emirates must be equipped with the necessary equipment to undertake control operations in the event of pollution emanating from the said vessel.

10 Employment issues

10.1 What key domestic and international provisions apply to the health and safety of maritime workers in your jurisdiction?

The United Arab Emirates has not ratified the Maritime Labour Convention, 2006 (MLC). However, in order to safeguard the welfare of seafarers, the United Arab Emirates has adopted provisions which are similar to those of the MLC and other International Labour Organization conventions (as applicable to seafarers) and given effect to them through local law. The laws on seafarers – and in particular, their health, safety, employment and welfare – are set out in Articles 169 to 198 of the Maritime Code. They apply to ships of not less than 50 tons.

10.2 What other employment issues should shipowners and operators be aware of with regard to maritime workers in your jurisdiction?

In recent years, the United Arab Emirates has seen a significant increase in cases of shipowners abandoning their vessels in UAE waters, with seafarers deprived of basic necessities such as food, water and fuel to run electrical generators on the ship, and non-payment of the wages on which they rely for their livelihoods. These issues were addressed through local legislation.

The Federal Maritime Authority (FMA) has issued Circular 6/2018 on Compulsory Insurance Requirements Relating to Shipowners' Liabilities towards Seafarers, which applies to shipowners of ships of at least 200 gross registered tonnage, whether UAE flagged or foreign flagged. Under the circular, shipowners must take out insurance to cover liabilities arising from:

• the repatriation of crew, essential needs such as food, accommodation and medical care, and up to four months' outstanding contractual wages and entitlement in the event of abandonment, matching MLC Regulation 2.5, Standard A2.5.2 and Guideline B2.5; and
• contractual payments for death or long-term disability due to an occupational injury, illness or hazard set out in the employment agreement or collective agreement, matching MLC Regulation 4.2, Standard A4.2 and Guideline B4.

Subsequently, due to the remarkable results achieved by Circular 6/201 and the significant reduction in seafarer abandonment cases, the FMA issued Circular 1/2019 on Compulsory Insurance Requirements Relating to Shipowners' Liabilities towards Seafarers, which expands the scope of Circular 6/2018 to include all merchant ships of any size (including those with a gross tonnage of less than 200 tons), whether UAE flagged or foreign flagged.

Also relevant is UAE Cabinet Resolution 71/2021 on Marine Wrecks and Violating Ships, which entered into force on 15 September 2021 and safeguards the interests of seafarers by providing for their right to a seaworthy ship and entitlement to wages (if not paid for two months). Further, if the ship is arrested in the United Arab Emirates and the owner fails to take care of the crew, the court may direct the applicant of arrest to:

• carry out all necessary procedures to cover the requirements of the ship's crew, supplies and fuel;
• maintain the ship's seaworthiness; and
• take all measures to correct its condition.

These expenses will be considered as a debt to the ship.

Further, the Schedule to Cabinet Resolution 71/2021 states that it is an offence for a shipowner or operator to:

• abandon a ship;
• refrain from paying the wages of the seafarers working on the ship for two months or more; or
• fail to provide supplies and healthcare to the seafarers working on the ship

The penalties for these offences are as follows:

• an administrative fine of AED 20,000 administrative fine and a fine of AED 10,000 for each seafarer;
• for a foreign-flagged ship, a ban on entering UAE ports or anchoring in state waters for three months from the last time of departure from the United Arab Emirates; and
• in case of repeat offences:
• • double the administrative fine;
  • cancellation of the company's licence, if this was issued in the United Arab Emirates; and
  • a one-year ban on entering UAE ports or to anchoring in UAE waters after leaving the United Arab Emirates.

11 Disputes

11.1 In which forums are shipping disputes typically heard in your jurisdiction?

Shipping disputes are heard before the mainland courts or the courts with offshore jurisdiction of the United Arab Emirates (ie, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM)). Ship arrest cases are normally heard before the mainland courts.

Shipping disputes are also heard by arbitration tribunals. The United Arab Emirates is home to leading arbitration institutions such as:

• the Dubai International Arbitration Centre;
• the Abu Dhabi Commercial Conciliation and Arbitration Centre; and
• the Dubai World Tribunal.

These are a popular choice for the resolution of shipping disputes.

11.2 What issues do such disputes typically involve? How are they typically resolved?

Shipping disputes typically involve issues such as:

• determination of rights and liabilities of parties, arising under contract or tort;
• burden of proof;
• causation;
• mitigation of loss;
• proof of loss; and
• the statute of limitations.

In instances where there is an arbitration agreement between the parties, a typical issue which comes up for determination before the court is whether the signatory of the party to the arbitration agreement has the legal capacity to bind that party to an arbitration agreement. As per Article 4(1) of Federal Law 6/2018 on Arbitration, an arbitration agreement may only be entered into by a physical person who has the legal capacity to act or by the representative of the legal person authorised to conclude the arbitration agreement; otherwise, the agreement will be null and void.

Another typical issue which comes up in ship arrest court cases is whether the claim qualifies as a maritime debt as defined under Article 115 of the Maritime Code.

As to the adjudication and resolution of disputes, the UAE courts follow a civil law approach. There are no oral hearings or examination/cross-examination of the respective witnesses by the party's counsel. The UAE courts usually tend to appoint experts in the field of dispute – such as maritime experts, insurance experts and auditing and financial experts – to assist the courts in the exercise of fact finding and proof thereof. The UAE courts heavily rely on the reports of the experts before adjudicating the disputes. Before the DIFC/ADGM courts, the adjudication process is based on a common law approach whereby disputes are resolved through trial and hearings of the parties.

11.3 Have there been any recent cases of note?

To our knowledge, there have been no recent landmark cases per se. However, there have been recent judgments in which the DIFC courts have held that the jurisdiction of the UAE courts also encompasses the jurisdiction of the DIFC courts. These judgments have broken new ground by significantly extending the jurisdiction of the DIFC courts and changing the dynamics of litigation in the United Arab Emirates, with potentially far-reaching consequences for the shipping industry.

12 Trends and predictions

12.1 How would you describe the current shipping landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Since 2016, when the Dubai Industrial Strategy 2030 was launched, the maritime sector has been recognised as one of six priority sectors targeted by the Dubai government. The UAE shipping industry has shown continuous growth over the past few years. Two important legislative reforms took place in 2021:

• The United Arab Emirates ratified the 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims, 1976, which entered into force in the United Arab Emirates on 23 May 2021; and
• In September 2021 Cabinet Resolution 71 on Marine Wrecks and Non-Compliant Ships came into force. It applies to all national and foreign ships located in the territorial waters and ports of the United Arab Emirates. The main change it introduced was the requirement for a financial guarantee issued by financial institution/bank to cover the costs of wreck removal.

Following the ratification of these international conventions and post-COVID-19 changes in the maritime industry, it is anticipated that the Maritime Code – which dates back to 1981 – will be amended to reflect the recent changes and legislative reforms. Uncertainties as to the applicability of such conventions remain because of the contradictions between some of their provisions and UAE maritime law; the new legislation is expected to cover these regulatory gaps. It is also expected that developments in the maritime industry will encourage the establishment of specialised admiralty courts to deal with complex and sophisticated maritime disputes.

Another development which has given the industry a further boost is the possibility for foreign investors to fully own maritime businesses, as established by Cabinet Decision 16/2020, which lists those economic activities and sectors in which direct foreign investment is permitted and the permitted ownership percentage. While previously full foreign ownership of maritime businesses was possible only in free zones, it is now also possible on the mainland, which should prove of significant help in attracting foreign investment.

The UAE government has also put considerable effort into promoting the growth of the industry and maintaining the jurisdiction's international reputation as a major maritime hub. In the near future, the United Arab Emirates may also become one of the most attractive flag states.

13 Tips and traps

13.1 What are your top tips for shipowners and operators in your jurisdiction and what potential sticking points would you highlight?

Shipowners and operators should:

• strictly adhere to the guidelines laid down by the UAE authorities;
• abide by the laws applicable in the state; and
• conduct their business within the specified parameters.

It is always advisable for shipowners and operators to assess the practical applicability of international conventions in the United Arab Emirates – for example, in relation to the establishment of the limitation funds. While the United Arab Emirates has the ratified the International Convention on Limitation of Liability for Maritime Claims, 1976 and the 1996 Protocol thereto, which provide for the creation of the limitation funds by shipowners, the establishment of limitation funds in the United Arab Emirates may be challenging and potentially impossible in practice.

Shipowners should also keep track of the latest developments in the industry, including the adoption of new amendments to the International Convention for the Prevention of Pollution from Ships Annex VI on emissions of greenhouse gases. Expected to come into force in 2023, the amendments will introduce major new technical rules regarding the Energy Efficiency Existing Ship Index and the Carbon Intensity Indicator, requiring significant advance planning by shipowners.

Meanwhile, it is anticipated that the latest political developments and escalations around the world will fuel a dramatic rise in maritime disputes and claims, especially with regard to marine insurance cases involving a sanctions element and sanctions regulations. While previously the sanctions against Iran were the most common source of disputes in the UAE maritime industry, the sanctions imposed on Russia following its invasion of Ukraine have created additional issues for industry players that deal with Russian sanctioned entities. Accordingly, before dealing with such entities or individuals, shipowners and operators should assess all potential risks, especially with regard to the enforcement of judicial acts in the respective sanctioned countries. They should also consider the war and sanction clauses in their respective insurance policies to consider the validity of already existing claims.

It is expected that the Russia-Ukraine conflict will lead to an increase in claims under war policies. It is highly recommended that shipowners consider purchasing additional war insurance cover to cover war and or hostile action damages, which are usually excluded from the policies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.