Geographically, as being in the centre of the World, UAE is arguably an “ideal” Maritime location. Talking about the new hashtag #Maritime law, our Managing Partner, Jasamin Fichte focuses on some of the key issues that need to be immediately addressed should UAE desire to remain in the league of Maritime nations with a thriving Maritime industry. This article was first published on Marasi News magazine.

Geographically, as being in the centre of
the World, the UAE is arguably an “ideal” Maritime location. As a
gateway to Europe and America from the Fareast, one of the largest Ports
in the World, state of the art warehousing facilities and a tax-free
nation – UAE has much to offer to be a Maritime hub. However,
limitations within the Law have hindered development in the Maritime
field where not only has the industry remained under-developed but has
seen many a Shipowner, despite the immense possibilities the nation has
to offer, shy away from it. A Maritime Law, enacted in 1981 and amended
in 1988 in today’s age, remains ineffective and short of answering many
issues a developed Maritime nation is required to offer. A hindrance
which is required to be immediately addressed should UAE desire to
remain in the league of Maritime nations with a thriving Maritime
industry.

Key issues to be addressed

Most shipowners deploy international crew and officers to man their
vessels. This requirement could vary depending on the flag state
requirements, trading patterns, technical requirements and various other
factors. In general deployment of seafarers require them to have a
“continuous discharge certificate” (CDC) and in some cases a “seafarers
visa” when joining a ship. Seafarers joining a UAE flagged vessel are
required to have a UAE visa, an employment visa with a validity of 2
years together with a local medical insurance as a requirement as per
local immigration laws. This alone is a hindrance to ship operations as
seafarer contracts rarely exceed a period of 12 months today. The
shipowner of a UAE flagged vessel is therefore not only faced with
dealing with immigration formalities but also added manning expenses. In
addition, a Shipowner also has to spend twice on medical insurances for
his crew and officers which are covered under the P&I (Protection
and Indemnity) Insurance policy, unrecognized by the local immigration
authorities.

Every contractual agreement, due to various reasons can always lead
to a dispute. A complexity of a Maritime contract which not only has
involvement of various parties is also dependent on multiple technical
issues. This “techno-commercial” contract together with the complexities
of trading requirements is always in English. A translation of
documents into Arabic, a pre-requisite for UAE Courts, can result in a
“lost in translation” thereby defeating the purpose of resolving a
dispute. It is, therefore, fundamental that all Maritime matters are
addressed in English and probably a separate Maritime Court be set up in
either DIFC or ADGM where cases are addressed in English. This will not
only add a comfort factor to a shipowner but also ensure that
translation is not the Achilles Heel for a Maritime dispute.

An arrest of vessels is not uncommon in the Maritime field. For a
Shipowner, disruption of business due to an arrest is most uncomforting.
An interesting aspect with regards to arrest which Shipowners are
either unaware or are not properly advised, is that, irrespective of the
applicable law within the contract, if the action arose within the UAE,
an arrest based on that action can be granted by the UAE Courts. It can
be argued that this makes UAE an “arrest friendly” jurisdiction,
however ignoring a contractual jurisdiction adds to a sore point from a
shipowner prospective. Therefore, it is necessary that the jurisdiction
of an underlying contract is applied when an arrest application is to be
considered. Relief from an arrest presently is only acceptable in the
form of a bank or cash guarantee to court. This again in most mature
Maritime jurisdictions is available via P&I Club LoUs (Letter of
Undertaking) which the present law does not allow.

In consideration of the vision of the UAE being recognized as an
unparalleled Maritime Hub, developments in the infrastructure alone will
not attract the key shareholders of the industry – the Shipowner and
therefore unless relevant issues in the new Maritime Law are addressed,
what would remain is another struggle to encourage domestic and
international investment in the maritime sector.

This article was first published in Marasi News on Wednesday, 30th May.