UAE has its own rules and regulations to govern matters related to the sea. The Maritime lawyers in Dubai have expressed their views on the procedure for ship arrest and they have also given their views on the judgments issued by a court.
In UAE the provision for ship arrest is contained under the Maritime Law, i.e. Federal law no. 26 of 1981. Ship arrest is used as a tool against maritime debt. The application is made for the maritime debt before the court having the jurisdiction of the port and it is the court’s discretion to provide for the punishment of the ship arrest or not. An ex parte application is made to the Civil Court having jurisdiction over the port where the vessel is and the grant of any relief is entirely discretionary.
Prima facie evidence by Plaintiff
Prima facie evidence must be provided by the plaintiff that a maritime debt against the Defendant exists, unless an arrest order is made, Defendant may leave the emirates permanently or act prejudicially to the Plaintiff’s rights. The court decides after examination of the application and the supporting documents (often) without hearing Counsel. The Court may ask for counter security from Plaintiff in the form of a bank guarantee.
Once an order of arrest is granted a substantive claim has to be filed within eight days from the date of grant of arrest order. The following details will be required by the Court from the Plaintiff; an undertaking:
- To pay all official fees and expenses regarding towing or moving of the vessel or anything connected with the arrest of the vessel also include the amounts due to the crew;
- To compensate the owners of the vessel against any delay or damage that arises from the arrest of the vessel or if the arrest is held to be wrongful by a judgment of the court;
- Confirmation from the port that the defendant is the owner of the vessel and that the vessel is within port limits.
Federal Maritime Law
Article 122 of the Federal Maritime Law (FML) provides that the civil court has jurisdiction over the arrest that took place. The Court shall be competent to decide on the subject matter of the claim even if the vessel does not fly in the UAE.
Further, Article 325 of the FML contains certain provisions as to the jurisdiction of the courts in cases involving collisions. The UAE Civil Procedure Code of 1992 as amended by Federal Laws No. 30 of 2005 and 10 of 2014 (“CPC”) confer jurisdiction upon the courts in UAE to hear a case against a foreign defendant having no domicile or residence in the UAE and also to order provisional relief (such as the arrest of a vessel) even when the courts do not have jurisdiction to adjudicate upon the substantive merits of the matter.
UAE is not a party to the Arrest Convention of 1952 and hence, the court accepts the POA executed abroad, after its notarization in the foreign country and it must be attested by the relevant Ministry of Foreign Affairs and by the UAE Embassy in that country. It shall be further attested in the UAE by the Ministry of Foreign Affairs and Ministry of Justice. POA shall be translated into Arabic by a certified legal translator. The ship-owner can contest the arrest order by objecting to the arrest by challenging the accuracy of the procedures as laid down in the Maritime Law.
Claims constituting maritime debts (Article 115)
- Damage caused by a vessel as a result of a collision or other accident;
- Loss of life or personal injury occasioned by the vessel and arising out of the use thereof;
- Assistance and salvage;
- Contracts relating to the use or exploitation of the vessel under a charter party or otherwise;
- Contracts relating to the carriage of goods under a charter party, bill of lading, or other documents; etc.
Appeal Number 44/2020 Commercial
In the instant matter, the Khor Fakkan’s Court of Appeal has upheld the superseding power of the private law (Maritime Law) over general law (Civil Procedure Law) while it determined the validity of the arrest order. The shipping company i.e. the claimant has agreed for selling one of its vessels to the defendant’s company. It was agreed by the defendant that 20% of the total purchase price would be paid to the claimant before delivery of the vessel and the remaining 80% of the purchase price would be paid within 3 days of the delivery. 20% amount was received by the claimant, however, the remaining 80% of the purchase price was not received. An arbitration proceeding was initiated in London by the claimant against the defendant, asking either for the ownership of the vessel or the rest of the 80% of the purchase price.
The claimant also acquired an arrest order over the vessel that was delivered at the Khor Fakkan Port based on the sale agreement. The claimant was not required to take any action regarding the validity of the claim on the attachment orders. Hence, it was believed by the claimant that the arrest order would be considered to be valid until the final award has been passed by the Arbitral institution of London.
The claimant however filed at the Khor Fakkan’s Court of First Instance in UAE requesting the stay on the validity of the arrest order claim, as he waits for a final award on the validity of the debt claim in London. After hearing both the parties, the Court of Appeal upheld the judgement of the Court of First Instance, dismissing the claims of the defendant. It was ruled that:
- As per Article 22 of the CPL, the court is conferred with jurisdiction to decide upon the validity of the claim on the arrest order;
- Article 115 (D) of the Maritime Law, the claimant’s debt shall be considered as maritime debt;
- As per Article 121 of the Maritime Law, the claim for arrest order is valid and this being a private law, should supersede the general rules.
The judgment concludes that the procedure for ship arrest specified in the Maritime Law must prevail over the general attachment procedures. The Court in UAE has granted arrest applications as security for arbitration proceedings in another jurisdiction. The powers of arrest conferred by the Maritime Law, the Port Authorities of each Emirate also have certain powers of arrest and detention.