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1 Shipping in 32 jurisdictions worldwide Contributing editor: Jonathan Lux 2010 Published by Getting The Deal Through in association with: Albors Galiano Portales Ali Budiardjo, Nugroho, Reksodiputro, Counsellors at Law Andrade Dias & Associados Sociedade de Advogados RL Attorneys at law Borenius & Kemppinen Ltd Bull, Housser & Tupper LLP Cabinet Isabelle Corbier Chrysses Demetriades & Co LLC Cox, Wootton, Griffin, Hansen & Poulos LLP Denlaw Garza Tello & Asociados Abogados/Attorneys GTG Advocates Haridass Ho & Partners, Advocates & Solicitors Ince & Co International Law Offices Larraín, Rozas, Lackington, Rencoret & Uruzúa Cia Ltda Law Firm Vukić, Jelušić, Šulina, Stanković, Jurcan & Jabuka Law Offices Carl Kincaid Mendes Vianna Advogados Associados Lindahl Logos Legal Services Maersk Line Marine Legal Services Naschitz Brandes & Co Okabe & Yamaguchi PBS Law Limited Rolmax Law Office, Shanghai Segelken & Suchopar Sokolov, Maslov and Partners Straits Consulting Group Studio Legale Siccardi Bregante & C Thomas Cooper Van Steenderen MainportLawyers

2 contents Shipping 2010 Contributing editor: Jonathan Lux Ince & Co Business development manager Joseph Samuel Marketing managers Alan Lee Dan Brennan George Ingledew Edward Perugia Robyn Hetherington Dan White Tamzin Mahmoud Ellie Notley Subscriptions manager Nadine Radcliffe GettingTheDealThrough.com Assistant editor Adam Myers Editorial assistant Nick Drummond-Roe Senior production editor Jonathan Cowie Chief subeditor Jonathan Allen Senior subeditor Kathryn Smuland Subeditors Ariana Frampton Charlotte Stretch Editor-in-chief Callum Campbell Publisher Richard Davey Shipping 2010 Published by Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Tel: Fax: Law Business Research Ltd 2009 No photocopying: copyright licences do not apply. ISSN The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer client relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of September 2009, be advised that this is a developing area. Printed and distributed by Encompass Print Solutions Tel: Introduction Martin A Clausen Maersk Line 3 Brazil Godofredo Mendes Vianna Law Offices Carl Kincaid Mendes Vianna Advogados Associados 4 Canada John W Bromley and Michael J Posnikoff Bull, Housser & Tupper LLP 12 Chile Ricardo Rozas Larraín, Rozas, Lackington, Rencoret & Uruzúa Cia Ltda 18 China Lu Min and Margot Luo Rolmax Law Office, Shanghai 27 Croatia Gordan Stanković and Maja Dotlić Law Firm Vukić, Jelušić, Šulina, Stanković, Jurcan & Jabuka 33 Cyprus Michael McBride, Yiannis Christodoulou and Michael Papadopoulos Chrysses Demetriades & Co LLC 39 Denmark Peter Schaumburg-Müller and Mathias Steinø Denlaw 45 England & Wales Jonathan Lux with Reema Shour, Anna Fomina and Jams Rustambekov Ince & Co 51 Finland Jan Aminoff and Inkeri Kuuskoski Attorneys at law Borenius & Kemppinen Ltd 60 France Isabelle Corbier Cabinet Isabelle Corbier 66 Germany Kathrin Janka Riehmer Segelken & Suchopar 72 Greece Douglas Bateson and Ioanna Vitta Thomas Cooper 78 Hong Kong Max Cross and Angela Yap Ince & Co 83 Iceland Einar Baldvin Axelsson Logos Legal Services 92 Indonesia M Husseyn Umar, Efendi H Manurung and Sahat A M Siahaan Ali Budiardjo, Nugroho, Reksodiputro, Counsellors at Law 99 Israel Peter Gad Nashitz Naschitz Brandes & Co 104 Italy Francesco Siccardi, Francesca Ronco and Enrica Monzani Studio Legale Siccardi Bregante & C 108 Japan Shuji Yamaguchi Okabe & Yamaguchi 117 Latvia Edward Kuznetsov, Julia Kazmina and Diana Kalvane Marine Legal Services 122 Malaysia Primila Edward Straits Consulting Group 127 Malta Robert Tufigno and Cynthia van der Weerden GTG Advocates 132 Mexico Fernando Escamilla and Anais Vivanco Garza Tello & Asociados Abogados/Attorneys 141 Netherlands Arnold J van Steenderen, Marieke G van den Dool and Jasper R Groen Van Steenderen MainportLawyers 147 Portugal Mateus Andrade Dias Andrade Dias & Associados Sociedade de Advogados RL 156 Russia Mikhail Sokolov, Anna Arkhipova and Sergey Seliverstov Sokolov, Maslov and Partners 166 Singapore Ajaib Haridass, V Hariharan and Eddy Teng Haridass Ho & Partners, Advocates & Solicitors 172 Spain Eduardo Albors, Javier Portales and Alfonso de Ochoa Albors Galiano Portales 180 Sweden Erik Linnarsson, Peter Bäverlid, Mark Hallquisth and Christoffer Gramming Lindahl 189 Thailand Paiboon Sutuntivorakoon and Dennie Soong PBS Law Limited 196 Ukraine Arthur Nitsevych and Nikolay Melnykov International Law Offices 203 United Arab Emirates Bob Deering, Brian Boahene, Pavlo Samothrakis, Khalid Hamed, Mona Al Sayegh, Alexandra Bailey and Jacqueline McFadden Ince & Co 208 United States Gregory W Poulos and Rupert P Hansen Cox, Wootton, Griffin, Hansen & Poulos LLP 214 Law Business Research

3 United Arab Emirates ince & Co United Arab Emirates Bob Deering, Brian Boahene, Pavlo Samothrakis, Khalid Hamed, Mona Al Sayegh, Alexandra Bailey and Jacqueline McFadden Ince & Co As a general caveat, please note that the UAE is a civil law jurisdiction. Case law does not follow any precedent system and each case is determined according to its own facts and arguments put forward. All references to articles are to articles in the UAE Maritime Code (Federal Law No. 26 of 1981), unless expressly stated otherwise. Newbuilding contracts 1 When does title in the ship pass from the shipbuilder to the shipowner? Can the parties agree to change when title will pass? The general position under the UAE Maritime Code is that title will pass upon the purchaser s acceptance of delivery of the vessel after the vessel has undergone sea trials, per article 67 of the UAE Maritime Code. The parties are, however, free to depart from this position by providing for an alternative regime in their contract. Additionally, article 118 of the Commercial Code, which applies more generally to commercial activities (of which ship construction forms part), allows a seller to retain title in moveable goods until the final instalment of the purchase price is paid. 2 What formalities need to be complied with for the refund guarantee to be valid? The UAE Maritime Code provides that a shipbuilding contract must be in writing so to the extent the refund guarantee forms part of the ship building contract, it too must be in writing. It is not necessary for the guarantee to be notarised or registered. In practice, all shipbuilding contracts and associated refund guarantees are evidenced in writing and signed by the parties. 3 Are there any remedies available in local courts to compel delivery of the vessel when the yard refuses to do so? As a general point, there is no form of mandatory injunctive relief under UAE law. Article 105 of the UAE Commercial Code does however permit a purchaser of goods to seek an order from the court akin to specific performance in the event the yard fails to make delivery of the goods after being served with notice by the purchaser. Article 105 of the UAE Maritime Code also allows the purchaser to claim, as an alternative to seeking an order for delivery of the ship, cancellation of the contract and compensation. 4 Where the vessel is defective and damage results, would a claim lie in product liability against the shipbuilder at the suit of the shipowner; a purchaser from the original shipowner; or a third party that has sustained damage? Article 68 of the UAE Maritime Code provides that where the purchaser takes delivery of a vessel after it has undertaken sea trials the yard is deemed to have guaranteed that the vessel is free from hidden defects. However, the UAE Commercial Code provides that in circumstances where there is a hidden defect which is not material, this does not ordinarily entitle the purchaser to cancel the contract. Indeed, article 110 of the UAE Civil Code provides that the purchaser can only avail a contract which concerns the acquisition of moveable goods if the defect causes the goods to be unfit for their purpose or difficulty in the disposal of those goods. Article 111 of the UAE Civil Code goes on to provide for the purchaser to give notice of the defects to the seller within 15 days of actual delivery, and requires the purchaser to commence proceedings to seek a reduction of the purchase price, on account of the defect, within 60 days from delivery unless the defect is latent, in which case the purchaser must file their claim within six months of actual delivery. Ship registration and mortgages 5 What vessels are eligible for registration under the flag of your country? Article 18 (1) UAE Maritime Code provides that all vessels are eligible for registration under the UAE flag, excluding the following: vessels designed for fishing, pleasure-cruising or used for commerce, and whose tonnage is not more than 10 tons; lighters, pontoons, barges, tugs, boats, cranes, dredgers, diving vessels and other floating installations. These vessels may be registered at the request of the owners. 6 What are the requirements for company formation? There are numerous corporate structures available in mainland UAE as well as within the various free trade zones located within the UAE. The free zone located at the Jebel Ali Port is the oldest and probably the most popular free trade zone for maritime clients. Unlike mainland UAE, the Jebel Ali Free Zone Authority (JAFZA) allows for 100 per cent foreign ownership, which is often an attractive feature for foreign investors. Mainland UAE continues to have foreign ownership restrictions which for most corporate structures, broadly referred to as LLCs, requires 51 per cent ownership by a UAE national. The Dubai Maritime City (DMC) is a new option for the maritime industry, which aims to attract a range of maritime related entities into one business community. The DMC is not itself a free trade zone but it may, on a case-by-case basis, permit investors to operate under a JAFZA free trade licence within the DMC, which in turn allows for 100 per cent foreign ownership. The two key deciding questions an investor should consider when deciding on free zone or non-free zone would be: if the prospective company will be trading within the UAE a free zone company will probably be inappropriate and an LLC will be required; and if the investor wants 100 per cent ownership of the corporate 208 Getting the Deal Through Shipping 2010

4 Ince & Co united arab emirates entity an LLC will be inappropriate and a free zone company will be required. There are albeit certain exceptions available and in special circumstances, various consents and permits may be granted which vary the standard position. Once the free zone decision has been made, the business structure will ordinarily be determined by the business activities, the number of shareholders and the types of licences the business requires. 7 Is dual registration and flagging out possible and what is the procedure? Dual registration is not permitted under UAE law (article 28). To register a vessel, applicants must provide evidence that the vessel was deleted from any previous register. All vessels registered in accordance with the UAE Maritime Code shall only fly the flag of the UAE (article 15). There is therefore, no procedure for flagging out or dual registration. 8 Who maintains the register of mortgages and what information does it contain? Mortgages are recorded on the Ship Register which is maintained by the ship registrar in the office of the port where the vessel is registered. The data is also centrally available to the head UAE ship registrar in the UAE Marine Affairs Department, Ministry of Transport. If the vessel is outside the UAE the mortgage may also be recorded with the UAE state consul. If the vessel is mortgaged while it is being built, the relevant place in which to record the mortgage would be the Registration Office of the port where the construction is taking place. Other than an official copy of the mortgage itself, the information contained on the Ship Register regarding the mortgage would include: the name, nationality, place of residence and profession of the creditor and debtor; date and type of contract; amount of the debt; any special conditions; vessel s name, description, date of manufacture and registration number (and construction report, if mortgaged whilst being constructed); and the place chosen by the creditor within the jurisdiction of Registration Office where the entry is made. The UAE Ship Register is a closed register catering only for ships owned by companies or individuals that are majority UAE-owned and the information registered against each ship is not easily available. The relevant law relating to ship registration and mortgages is in articles of the UAE Maritime Code. Limitation of liability 9 What limitation regime applies? What claims can be limited? Which parties can limit their liability? The UAE ratified the 1976 Limitation of Liability Convention in 1997 (LLMC 76). Although the UAE has ratified this convention it has not yet repealed articles the UAE Maritime Code. Therefore doubt remains as to how any given judge would apply the law. Under the UAE Maritime Code, translated article 138 states that a shipowner may limit his liability in respect of the following claims: the death or injury of any person on board the vessel and also the loss or damage of any property on board the vessel; the death or injury of any other person on board or at sea and the loss or damage of any property or the infringement of any right if this results from the offence of any person for whom the owner is responsible whether or not such person is on board the vessel, provided that the offence is connected with navigation or the management, loading, transportation or unloading of the vessel or the embarkation, carriage or disembarkation of passengers; and any obligation imposed by the law connected with the lifting of shipwrecks or the refloating, lifting or demolition of a sunken vessel or a vessel which has gone aground or been abandoned, including the contents aboard and any obligation arising from damage caused by the vessel to ports installations, docks and navigation lanes. The ability to limit liability under this provision of UAE maritime law is therefore at the discretion of the court and is not an automatic entitlement. Local courts have traditionally been reluctant to permit the limitation of liability. For this article to be considered mandatory it would need to be incorporated into the contract of carriage. Under the UAE Maritime Code, shipowners, ship charterers and their personnel may limit their liability. 10 What is the procedure for establishing limitation? Despite the ratification of LLMC 76 and contrary to article 141, the UAE courts do not usually permit shipowners to establish a limitation fund since there is a general opposition to the concept of the limitation of liability as a whole. If the local court were to permit the setting up of a limitation fund, this would be calculated on a sliding scale dependent on vessel s overall tonnage. A shipowner may then limit his liability without any evidence of an offence committed on his part or on the part of the persons for whom he is responsible. Furthermore, if a shipowner chooses to limit his liability it will not be considered an admission of liability. 11 In what circumstances can the limit be broken? A shipowner may not limit his liability when an incident which has given rise to liability is as a result of his personal error. Liabilities arising from aid and rescue and the sharing of joint losses (general average) may not be limited and the limitation in respect of liabilities toward the shipowner s crew or personnel or their heirs may not be limited. Additionally, claims arising from nuclear damage and made against the owner of a nuclear vessel may not be limited. Port state control 12 Which body is the port state control agency? Under what authority does it operate? The Department of Maritime Inspection may carry out the control and inspection of national and foreign registered vessels (article 58(1) and 59). It operates under the authority of the minister of communications. 13 What sanctions may the port state control inspector impose? Depending on the breaches, the Department of Maritime Inspection may impose the following sanctions: a six-month imprisonment and/or a fine not exceeding 25,000 United Arab Emirates Dirhams (article 64); a one-month imprisonment and/or a fine not exceeding 5,000 United Arab Emirates Dirhams (article 65); issuing a decree refusing the granting of a seaworthiness licence, or a safety certificate (article 61(1)); or issuing a decree prohibiting the vessel from sailing or cancelling such prohibition stating the reasons thereof (article 61(1)). 209

5 United Arab Emirates ince & Co 14 What is the appeal process against detention orders or fines? An appeal may be lodged to the minister of communication within ten days of the sanctions being notified. The minister will rule on the appeal within 10 days of receiving the application (article 61(2)). Classification societies 15 Which are the approved classification societies? Abbreviation ABS BV CCS DNV GL LR RS KR NK RINA Name American Bureau of Shipping Bureau Veritas China Classification Society Det Norske Veritas Germanischer Lloyd Lloyd s Register of Shipping Russian Maritime Register of Shipping Korean Register of Shipping Nippon Kaiji Kyokai Registro Italiano Narate 16 In what circumstances can a classification society be held liable, if at all? There is no known authority on this issue in UAE law. It is very difficult to anticipate how the UAE court would approach this issue. Collision, salvage, wreck removal and pollution 17 Can the state or local authority order wreck removal? Under UAE Maritime Code, the appropriate maritime department may confiscate the wreck of a vessel as security for the cost of its removal. In practice, if a wreck is located within port limits, the relevant port management authority will remove the wreck. No federal body currently exists to cover the issue of wreck removal across all territorial waters. 18 Which international conventions or protocols are in force in relation to collision, salvage and pollution? Whilst the 1910 Collision Convention has never been formally ratified by the UAE, the current provisions contained within the UAE Maritime Code are based on this. The UAE has also acceded to the Collision Regulations The Collisions at Sea provisions apply to all collisions that occur between two vessels where the damage caused results from a vessel s act or omission or failure to observe the National Law or approved international maritime conventions, as applicable. The provisions stipulate that compensation for damage to a vessel or vessels involved in a collision shall be commensurate with the actual damage caused. The International Convention on Salvage 1989 applies to the UAE and was given the force of law in The UAE is signatory to the International Convention for the Prevention of Pollution from Ships 1973 as amended by the the 1978 Protocol (Marpol 73/78). It is also signatory to the International Convention on Civil Liability for Oil Pollution Damage 1992 (CLC 1992) and the Fund Convention Is there a mandatory local form of salvage agreement or is Lloyd s standard form of salvage agreement acceptable? Who may carry out salvage operations? No mandatory form of salvage agreement currently exists in the UAE and since freedom of contract is widely acknowledged, any form of agreement can be utilised (including LOF). Any ship may carry out salvage operations. Ship arrest 20 Which international convention regarding the arrest of ships is in force in your jurisdiction? Neither of the conventions are officially in force in the UAE. However the UAE Maritime Code does contain a section on ship arrest based on the provisions of the 1952 convention. 21 In respect of what claims can a vessel be arrested? In what circumstances may associated ships be arrested? The grounds of arrest which are largely based on the claims set out in Article 1 of the 1952 convention. The grounds of arrest under the UAE Maritime Code, set out at article 115 include the following claims: damage caused as a result of a collision; death or personal injury; salvage; contractual claims; loss or destruction of goods onboard the vessel; general average; towing or piloting; building, repairing or supplying vessels and the costs of docking; disbursements spent on account of the vessel or shipowner; crew wages; disputes over the vessel s ownership; disputes concerning joint ownership; and marine mortgages. All of these claims are referred to as marine debts. Article 116(1) in addition permits the arrest of a sister ship owned by the debtor at the time the debt arose save that where the claim concerns disputes over ownership, joint ownership and mortgages the arresting party is only entitled to arrest the vessel to which the debt refers. Mere associated ship arrests are not permitted under the UAE Maritime Code. In theory, at least, the UAE courts ought only to grant an arrest if it has jurisdiction on any of the following bases: the arresting party s usual address or office is in the UAE; the marine debt originated in the UAE; the marine debt arose during a voyage when the vessel was arrested; or the marine debt arose from collision of salvage where the relevant UAE court has jurisdiction to hear the claim or if the marine debt is secured by a mortgage against the vessel. In practice however the UAE courts have allowed vessels to be arrested in the UAE merely on the basis of the vessel s presence in UAE waters. 22 What is the test for wrongful arrest? In some Emirates, as a condition of granting an arrest, the court will require the arresting party to undertake to indemnify the respondent for any loss or damage, within the claim amount, and to pay compensation to the court if a final judgment determines that the arrest was wrongful. While this practice does exist, there is little transparency as to what constitutes grounds for a wrongful arrest but it is thought that something more than simple negligence is required. In addition to the indemnity undertaking the plaintiff must also, in certain Emirates, undertake to be responsible to the court for the costs and expenses of maintaining the vessel while it is under arrest. 210 Getting the Deal Through Shipping 2010

6 Ince & Co united arab emirates 23 Can a bunker supplier arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel? The UAE courts have previously granted an arrest order for a claim by a bunker supplier for unpaid bunkers. However no express right to arrest for unpaid bunkers is set out in the Maritime Code and it remains to be seen the extent to which a bunker supplier can maintain an arrest application in circumstances where the bunker supply contract is with the charterer as opposed to the owner of the vessel. 24 Will the arresting party have to provide security and in what form and amount? There are no provisions in the UAE Maritime Code setting out the arresting party s obligation to provide security in its application for an order of arrest. At the discretion of the judge, the arresting party may be required to provide counter security. Normally this will take the form of a bank guarantee. Unless the arresting party agrees, the UAE courts will not accept P&I letters of undertaking as a form of security. 25 Who is responsible for the maintenance of the vessel while it is under arrest? In practice this will be for the account of the arresting party as it must attach to its arrest application order, an undertaking to be responsible for the costs of maintaining the vessel whilst it is under arrest. The undertaking also covers payment of all port fees. Carriage of goods by sea and bills of lading 26 Are the Hague Rules, Hague-Visby Rules, Hamburg Rules or some variation in force and have they been ratified or implemented without ratification? When does carriage at sea begin and end for the purpose of application of such Rules? Is your state proposing to ratify, accept, approve or accede to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea? The UAE is not a signatory to the Hague Rules, Hague-Visby Rules, or the Hamburg Rules. The UAE has not expressed an interest in the Rotterdam Rules. International conventions that are expressly incorporated into bills of lading will only be given the force of law in UAE courts if a translated and certified copy of the convention is provided to the court. In practice, this rarely happens due to the expense of having conventions translated and certified. 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 seaworthiness obligation and package limitation. 28 Who has title to sue on a bill of lading? The party named in the bill of lading has rights of suit. Similarly, any party that has had the bill of lading legally assigned or endorsed to him can have rights of suit (article 264, and as confirmed by case law). Parties that have copies of the bill of lading and take lawful delivery of the goods can also sue on the bill of lading (article 267). 29 To what extent can the terms in a charter party be incorporated into the bill of lading? Is a jurisdiction or arbitration clause in a charter party, the terms of which are incorporated in the bill, binding on a thirdparty holder or endorsee of the bill? The charterparty may be incorporated into the bill of lading but only if it is expressly incorporated. The terms of the incorporated charter party will only govern the relationship between the shipper and the carrier (articles 263(2) and 283). If court proceedings are wrongly commenced, the arbitration clause will only be enforceable if it is pleaded in the first court hearing. If not, the party seeking arbitration will be barred from seeking to stay proceedings pending the outcome of the arbitration. Jurisdiction will not be decided as a preliminary issue but as part of a final judgement, so a jurisdiction issue will probably not be speedily resolved. 30 Is the demise clause or identity of carrier clause recognised and binding? In the UAE freedom of contract is widely acknowledged, and a clause that has been freely agreed to between both parties will be recognised by the UAE courts. 31 Are shipowners liable for cargo damage where they are not the contractual carrier and what defences can they raise against such liability? In particular, can they rely on the terms of the bill of lading even though they are not contractual carriers? Generally, shipowners will not be liable under UAE law if they are not the contractual carriers. However, if the damage is due to a fault in the vessel the shipowner may be added as a co-defendant by the cargo owners in proceedings for the damaged cargo. 32 What is the effect of deviation from a vessel s route on contractual defences? In voyage charterparties, the sub-charterer or shipowner is responsible to the charterer in circumstances where proceeding to the named port is an impossibility and the charterer is not given specific instructions from the sub-charterer or shipowner as to where to go. The sub-charterer or shipowner is liable for freighting the goods to the named port (article 240). 33 What liens can be exercised? 27 Are there conventions or domestic laws in force in respect of road, rail or air transport that apply to stages of the transport other than by sea under a combined transport or multimodal bill of lading? There are no rail roads in the UAE. The UAE is therefore not a signatory to any international rail conventions. In respect of liability during the road and/or air transport under a multimodal bill of lading the relevant law is articles 272 to 370 of the UAE Commercial Transactions Law. This sets out the details required in the carriage contract, the rights and obligations of each of the carrier and the sender, and responsibility of the carrier in circumstances of damage or delay to the goods. Liens can be exercised against the property of the debtor. With regards to maritime debt, liens can be exercised by operation of law through an application to the urgent matter judge for an order to arrest (article 115). If the contract provides for the ability to exercise a lien, it is still advisable to obtain an order to arrest to ensure the arresting party s legal right to arrest before the courts. 34 What liability do carriers incur for delivery of cargo without production of the bill of lading and can they limit such liability? In delivering the goods without the production of the bill of lading the carrier is in breach of article 267 and 269 of the UAE Maritime 211

7 United Arab Emirates ince & Co Code. UAE law is not explicit in setting out the liability that carriers incur in the event of delivery without production of the bill of lading. Article 269 provides for a mechanism of applying to the court to appoint a third party to hold the goods in the event that no one with the bill of lading requests delivery. It is not certain, but the better view is that delivery without the bill of lading will subject the carrier to liability the equivalent of the market value of the goods delivered at the time of delivery. Whether carriers can limit their liability in respect of delivery without a bill of lading will depend on the terms of the bill of lading and any incorporated charterparty. 35 What are the responsibilities and liabilities of the shipper? The shipper is responsible for providing accurate information about the goods to be shipped and entered in the bill of lading (article 259(4)). The shipper is also responsible for signing an original bill of lading for retention by the carrier (article 262(2)) and for providing the carrier with the following details about the goods: the principal characteristics; the number of cartons, pieces, quantity, and weight; and the visible condition of the goods to be shipped, in writing (article 258(2)). Jurisdiction and dispute resolution 36 Which courts exercise jurisdiction over maritime disputes? There is no specialist maritime court. All claims are initially heard by the UAE Court of First Instance in the Emirate concerned. Claims that do not exceed 100,000 Arab Emirates Dirhams are heard by one judge. Claims in excess of that are heard by three judges. 37 In brief, what rules govern service of court proceedings on a defendant located out of the jurisdiction? The claimant submits the claim form into the court and the court is responsible for notifying the defendant of the claim. This means that the court will effect service using a court appointed officer who will seek to serve the documents on the defendants. In cases involving defendants based outside of the UAE the court will effect service using diplomatic channels which often leads to substantial delay in the prosecution of claims against foreign defendants. 38 Is there a domestic arbitral institution with a panel of maritime arbitrators specialising in maritime arbitration? There is no recognised arbitral institution in the UAE which specialises in maritime disputes. There are however, general arbitration bodies such as the Dubai International Arbitration Centre and the Abu Dhabi Commercial Conciliation and Arbitration Centre in Abu Dhabi. 39 What rules govern recognition and enforcement of foreign judgments and awards? The UAE is a party to the New York Convention on Enforcement of Foreign Arbitration Awards but has yet to formally ratify the convention into national law. As a consequence this has caused some confusion in the application of the New York Convention principles and led to some judges insisting that awards produced in signatory countries be enforced as though they are foreign judgments per articles 235 to 238 of the UAE Civil Procedures Code. The criteria governing the recognition and enforcement of foreign judgements are: that the UAE Ccourts did not have jurisdiction in the dispute; that the foreign court had the requisite jurisdiction under the applicable international rules to hear the dispute; that the defendant in question had been summoned to appear and had duly appeared before the foreign court; that the judgment is final under the law of the court issuing the same; and that the judgment does not conflict with any judgment or order previously issued by an UAE court and is not contrary to the public morals or order of the UAE. 40 What remedies are available if the claimants, in breach of a jurisdiction clause, issue proceedings elsewhere? A foreign jurisdiction clause will not be upheld by the UAE courts if the UAE courts deem that they have jurisdiction to hear the case and that the requirements of article 21 of the UAE Civil Procedure Code are satisfied, namely: one of the parties is domiciled in the UAE; the claim concerns an asset which is located in the UAE; the claim concerns a contract under which the contractual obligation should have been or was performed, concluded, executed, completed or relevant payments were made in the UAE; the claim is in respect of insolvency, which has been declared in the UAE; the claim is against a UAE national or expatriate who is domiciled in the UAE; and the claim concerns a party who is employed in the UAE. The defendants may, therefore, issue their own proceedings in the UAE if, in breach of the jurisdiction clause, the claimants issue proceedings elsewhere. 41 What remedies are there for the defendant to stop domestic proceedings that breach a clause providing for a foreign court or arbitral tribunal to have jurisdiction? If the contract contains an arbitration clause it is not permissible to proceed with a claim in a UAE court provided a party raises at the first hearing the fact that the court proceedings were commenced in breach of the arbitration clause. If such objection is raised the court should stay the court proceedings. If however no objection is raised at the first hearing the arbitration clause is deemed cancelled. If the contract provides for a foreign court to have jurisdiction, the UAE courts will nonetheless hear the case if the provisions of article 21 of the UAE Civil Procedure Code is satisfied (see question 40) so exclusive jurisdiction clauses are not really exclusive in the eyes of the UAE court, if on their own rules of procedure they have jurisdiction in a dispute. Limitation periods for liability 42 What time limits apply to claims? Is it possible to extend the time limit by agreement? Claims arising from charterparties must be brought within one year of the date of termination of the charterparty (article 224 (1)). Claims relating to reclamation must be brought within one year of the supplier being aware of his right to claim (article 224(2)). Claims arising from hidden defects pursuant to a ship building contract must be brought within one year of learning of the defect (article 68(1)). Claims regarding priority rights of a vessel must be brought within one year. But claims regarding priority of rights guaranteeing supply debts must be brought within six months (article 93 (1)). Time periods are extendable to three years and shall commence in accordance with article 93 (2): for claims guaranteeing aid and rescue remuneration with effect from the day when the operations were concluded; 212 Getting the Deal Through Shipping 2010

8 Ince & Co united arab emirates for claims for accident, collision and physical injury compensation from the date the damage occurred; for claims for destruction or damage to goods or baggage from the day the goods or baggage arrived or should have arrived; and for claims relating to repairs and supplies from the day the debt arose. Claims in respect of personal injury shall be time-barred two years after the day following the passenger s departure from the vessel (article 299). Claims in respect of death shall be time-barred two years after the day following the day the passenger should have departed from the vessel. Claims in respect of collisions shall be time-barred two years after the date of the collision. Claims in respect of death as a result of the collision shall be time barred after one year from the date of the collision (article 326). 43 May courts or arbitral tribunals extend the time limits? Time limits set by statute, as in the case with maritime debt-related time limits, cannot be extended by the courts or arbitral tribunals. This is because the law does not provide the judge or arbitrator with the power to extend. Miscellaneous 44 Is it possible to arrest bunkers in your jurisdiction or to obtain an attachment order or injunction in respect of bunkers? The arrest of bunkers may be possible under the UAE Civil Transaction Code for a civil or a commercial debt, but this is limited to circumstances where the bunkers belong to the party that owes the debt. Update and trends In relation to arrest of vessels, it is important to bear in mind that the arresting party must provide a power of attorney in favour of his local lawyers authorising them to act on his behalf in making the arrest application. If the arresting party is not based in the UAE this will often involve notarisation and legalisation in the country in which the arresting party is based, as well as legalisation in the UAE. Additionally documents supporting the arresting party s entitlement to arrest the vessel must be translated into Arabic by a court approved translator. The effect of this is that it is rarely possible to obtain an arrest at short notice. The arresting party will therefore need to advise their lawyers sufficiently in advance of the vessel s arrival at the UAE port so as to provide sufficient time to execute and legalise the power of attorney and to translate the relevant documents. 45 Can external factors, such as the recent global restriction on the availability of credit, affect the legal rights and liabilities of the parties to a shipping contract? Arguments of frustration and force majeure are very much based on the discretion of the judge. It is difficult to state the judicial reaction to the recent global restriction on the availability of credit affecting the legal rights and liabilities of the parties to a shipping contract. We are not aware of any decided case where the UAE court has relieved a party of its contractual obligations on the basis of credit crunch force majeure. 46 Are there any other noteworthy points relating to shipping in your jurisdiction not covered by any of the above? Please see Updates and trends. Bob Deering Mona Al Sayegh BurJuman Business Tower Tel: Trade Centre Road Fax: Level 21 PO Box Dubai United Arab Emirates 213

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