How are the dues claimed by bunker supplied to vessel in UAE under maritime law?

Introduction

The term ‘arrest’ means deprivation of a person’s freedom by legal authority. It may be done by touching or confining the body of a person. If the person resists then the police can also use legal force to effect the arrest. It is a form of State constraint that is applied to a person, during which the person is placed under detention. It is an important element that the person who is imprisoned is deprived of his right to move freely.

Arrest consists of an actual seizure or touching of a person’s body with a view to his detention. Apart from imposing certain duties on the police officers arresting a person, the Code confers specific rights by making express provisions in favour of a person who is arrested.

Recovery of unpaid bunker dues

The dues that are not paid by Bunker Suppliers are secured by a maritime claim and a right to arrest the vessel in rem to which the bunkers were supplied. A common feature of bunker supply contracts is that bunker suppliers allow all or part of the purchase price to fall due sometime after the delivery of the bunkers.

Owners trading vessels in the spot market will purchase bunkers on their accounts. In such circumstances, fulfilment of the payment obligations under the bunker supply contract will be within the owners’ control. If, however, the vessel is chartered out on a time or bareboat charter, bunkers will normally be purchased by the charterer. In such cases, owners have no control over the purchaser’s fulfilment (or not) of the payment obligations under the bunker supply contract. And if the purchaser defaults, this may lead to actions against the vessel by the bunker supplier.

Maritime law

The Shipping or Maritime law mentions maritime debts, and it accordingly provides that the arrest shall be made only for the satisfaction of a maritime debt.  It is important to understand the expression “maritime debt” that shall mean a claim concerning a right arising from either of the following causes:

  • Damages caused by the vessel due to the collision or otherwise;
  • Loss of life or there is some personal injuries caused by the vessel and arising out of use thereof;
  • Assistance and salvage;
  • Contracts regarding the use or exploitation of the vessel under a charter contract or otherwise;
  • Contracts regarding the carriage of goods under a charter contract, bill of lading, or other documents;
  • Loss or damage caused to the goods or belongings carried on board the vessel;
  • Towage or piloting of the vessel;
  • Supplies of products or equipment that are necessary for the use or maintenance of the vessel, in any location of supply whatsoever;
  • Construction, repair or fitting of the vessel, and costs at present thereof in docks;
  • Amount spent by the master, shippers, charterers or agents on the vessel or account of the owner thereof;
  • Wages of the master, officers and crew, etc. who have been working onboard the vessel under a contract of maritime employment;
  • About a dispute of ownership of the vessel;
  • A dispute concerning the common ownership of the vessel, the possession or use, or the right to the profits arising from it;
  • A maritime mortgage.

 

Right of a physical or contractor supplier

Many vessel owners have been facing claims for payment directly from the physical suppliers that have not been paid by Bunker either on the basis that the Owner is directly liable or on the basis that the supplier had a retention of title provision in the terms and conditions of the agreement. It is believed that the physical supplier and/or the contractor (both) have the right to arrest the vessel, but there is contrary judgment concerning the right of the physical supplier.

Conclusion

Taking into consideration that the UAE has become the hub and a perfect location for maritime activities. Because of the increase in the need to implement a mandate that will effectively regulate and monitor pertinent issues faced by the maritime operator, the land and maritime authority in the promulgated amendment to the Maritime Law will boost Maritime Industry.