The United Arab Emirates (UAE) has now become an important global hub for the people in the Shipping Industry. To arrest a vessel is a statutory right of a claimant under the UAE Maritime Code No. 26 of 1981, as amended (The ‘Maritime Code’). It provides and regulates the arrest of vessels.
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Whilst the UAE is not a signatory to the above conventions, the UAE Maritime Code borrows largely from the Hague-Visby Rules and relevantly incorporates, by way of example, the carrier’s obligation to exercise due diligence to make the vessel seaworthy, the Hague-Visby force majeure- type defences to the breach of the sea-worthiness obligation and package limitation.)
JURISDICTION
Under Article 122 (b) of the Maritime Code clarifies that the UAE Courts will, inter alia, following an arrest, have jurisdiction to hear the substantive proceedings if the ‘Maritime debt’ arouse in the UAE. Hence it is important to establish a nexus with the UAE in order to establish jurisdiction for the arrest and the substantive proceedings.
FILING OF SUBSTANTIVE PROCEEDING
Once the arrest order being granted the claimant needs to file substantive proceedings (i.e. proceedings on merits) within eight days of an order. Further, court fees are payable for the substantive proceedings, current calculated on a sliding scale up to AED 30,000. Within the stipulate eight days of an arrest order, if the claimant fails to file substantive proceedings the arrest will lapse. Hence the UAE Court will then typically schedule a number of hearings and determine the case on its merits. In the meantime, the arrest order will remain in place unless the arrested party provides a UAE bank guarantee for the release of the vessel or pays cash into court (or provides other security acceptable to the claimant).
COUNTER SECURITY
Counter Security in UAE Courts have wider discretion, depending on the facts and circumstances of each case and the said counter security is normally in the form of Bank Guarantee drawn on a UAE Bank in Dubai. Some times a port undertaking letter would suffice for counter security (i.e. no Bank Guarantee). However in some other jurisdiction (like Fujairah) Court insist counter security and generally the same be upto 10 percentage of claim amount..
JUDICIAL SALE OF VESSEL
UAE Maritime Code permits for the sale of vessel by judicial auction on merits. However the same shall be a final enforceable judgment.
WRONGFUL ARREST
If the plaintiff obtains the arrest order maliciously with an intention to cause damage to the defendant, the said arrest is regarded as a wrongful. However the burden of proof in relation to this matters rest on the defendants who claim damages for the wrongful arrest. But I feel this would be an uphill task.
CONCLUSION
Since UAE has enacted its own specific laws regulating the arrest of vessel and not a signatory to any of the arrest conventions, a claimant in UAE jurisdiction shall be very cautious, as an arrest procedure in UAE is depend on various legal and procedural issues, which are specific to UAE.