An Overview of the Maritime Trade Law in the United Arab Emirates 

The United Arab Emirates operates multiple ports, which significantly boosts the GDP of the country and serves as the primary shipping hub for the Middle East. Federal Law No. 26 of 1981 is the statute that governs the marine trade and the shipping industry (Maritime Code).

The Maritime Code governs, among other things, the registration of vessels, contracts of transport, liens, liability limitations, vessel collisions or accidents, arrest, and sale of the vessels.

The United Arab Emirates operates multiple ports, which significantly boosts the GDP of the country and serves as the primary shipping hub for the Middle East. Federal Law No. 26 of 1981 is the statute that governs the marine trade and the shipping industry (Maritime Code). All lawyers in Dubai that operate with Maritime Law are aware and stay up to date with changes that occur and are communicated by the government. 

The Maritime Code governs, among other things, the registration of vessels, contracts of transport, liens, liability limitations, vessel collisions or accidents, arrest, and sale of the vessels.

Vessels with UAE citizenship

Vessels are described as follows in Article 11/1 of the Maritime Code.

Note: Any building that is regularly used for maritime navigation, or that is set up with that goal in mind, regardless of its size, weight, or intended use, is referred to as a vessel.

According to Article 13, every vessel must have a name, a nationality, a flag to fly, and a port of registry. The vessel’s nationality and the nation that has regulatory jurisdiction over it are determined by its registration and flag.

Every vessel that has UAE nationality is required to fly the UAE flag, as stated in Article 15. A vessel must be registered in one of the UAE’s ports and be owned by a natural or legal person who is a citizen of the UAE in order to earn UAE nationality. In the case of an LLC, Article 14 mandates that individuals with UAE nationality and directors with the same nationality must control at least 51% of the capital.

A ship cannot sail under the UAE flag unless it is registered in accordance with the Maritime Code, acquire the services of a property dispute lawyer in Dubai in case of unclear events.

Ship’s Legal Capacity

Any claim arising out of or related to a ship must be made against the registered owners of the ship and not the ship itself because a ship lacks the competence to be sued.

Can I mortgage a Vessel?

As your trusted Law firm in Dubai might have passed across, it is possible to mortgage a ship whose total tonnage exceeds 10 tons. According to Article 97 of the Maritime Code, this is permitted. A mortgage contract under Article 99 is used to mortgage the ship. It should include the ship’s name, capacity, nationality, port of registration, and the date of the certificate of registration.

After the mortgage has been secured, it must be registered under Article 102 at the bureau of the port of the vessel’s registry.

The necessary mortgage terms are not stated in the Maritime Code, and it appears that the parties have sole discretion over the mortgage’s terms and conditions. However, Federal Law No. 5 of 1985’s Article 1440 makes it clear that the mortgage’s terms end when the debt does.

The arrest of the Vessel

Only when a “maritime debt” is satisfied can a vessel be impounded. According to Article 115 of the Maritime Code, a maritime debt is defined. Article 115/2 declares:

The term “maritime debt” refers to a claim for a right resulting from any of the following circumstances:

1. Any damage that’s done to the ship as a result of a collision or another event
2. Loss of life or personal harm brought on by the vessel or resulting from its use.
3. Support and recovery
4. Contracts pertaining to the vessel’s usage or exploitation, whether as part of a charter party or not.
5. Contracts for the transport of commodities in accordance with a charter party, bill of lading, or other legal instruments.
6. General average: loss or damage to cargo or chattels transported on the ship.
7. The ship’s pilotage or towing.
8. Supplies of goods or machinery are required for operating or maintaining the vessel, wherever the supply is made.
9. The costs of building, repairing, or outfitting the ship as well as docking fees.
10. Amounts spent on behalf of the vessel or its owner by the master, shippers, charterers, or agents.
11. Wages of those employed on the ship under a maritime employment contract, including the master, officers, and crew.
12. There is a quarrel over who really owns the ship.
13. A disagreement regarding who is the co-owner of the vessel, who has custody or use of it, or who has the right to the profits generated by its usage.
14. A maritime underwater mortgage

How do I make a ship arrest request?

A power of attorney signed by the party in favor of a local attorney must be provided in order to submit a ship arrest application, and it must be signed in front of a UAE notary public. The civil court with jurisdiction must receive the application for ship arrest. Only the payment of a maritime obligation will warrant the ordering of the ship’s arrest. A vessel that has been arrested is unable to navigate under Article 118.

Removing a warrant for the arrest

If a guarantee or other security is submitted to the civil court that is sufficient to satisfy the debt, an order of arrest may be annulled by the civil court in accordance with Article 118/2. The order of arrest, however, cannot be set aside under Article 118/2 if the maritime debts concern a dispute over ownership, co-ownership, possession, usage, or the right to profits resulting from the use of the vessel.

Conclusion
Even though it is obvious that the laws’ objectives are to advance the nation’s domestic and international trade, economic security, and development of the UAE as the world’s largest maritime location, the rules governing the shipping industry in the UAE are complex and extensive. If you’re looking for an expert Law firm in Dubai or specifically Indian legal advisors in Dubai, collaborate with us today.