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.