New UAE Maritime Law: Key Changes and Implications

Posted by Awatif Mohammad Shoqi Advocates & Legal Consultancy on July 25th, 2024

Introduction:

The UAE has introduced a new maritime law, Federal Decree-Law No. 43 of 2023, which will take effect at the end of March 2024. This law replaces the previous maritime law, addressing numerous issues and confusion over the years.
The new law brings significant amendments, particularly in the registration of vessels and the provisions for precautionary arrest, aligning UAE maritime regulations with international standards.

Registration of Vessels:

The new maritime law introduces substantial changes to the rules governing vessel registration. Notably, it expands the scope of eligibility for registration, allowing more vessels to fly the UAE flag. Under the new regulations, it is now possible to register under-construction vessels and chartered vessels.

New Registration Authority:

The Ministry of Energy and Infrastructure will now create a “Ship Register” to record ships, replacing the Maritime Inspection Department at the Ministry of Transportation, which previously had jurisdiction over vessel registration.

Expanded Eligibility:

According to Article 13(1), (b) of the new maritime law, a vessel may be registered in the Ministry’s Ship Register if the majority of its shares are owned by natural persons or juristic persons holding the nationality of the state or one of the Gulf Cooperation Council countries.
Alternatively, ownership can belong to entities with a domicile, head office, or ship management office in the UAE. This marks a shift from the previous law, which restricted registration to vessels owned by UAE nationals or companies with a majority of UAE national shareholders.

Registration of Under-Construction Ships:

Article 24 of the repealed maritime law briefly touched upon registering newbuilding vessels, whereas Articles 9, 10, and 11 of the new law provide detailed requirements. The shipbuilder, rather than the buyer, may record the shipbuilding contract in the Under-Construction Ships Register.

Charterer Registration:

Article 18 of the new law allows charterers of foreign-registered vessels to apply for UAE registration and fly the UAE flag, provided the charter party duration is at least 6 months and registration requirements are met. Article 19 permits UAE-registered vessel owners to apply for permission to fly another country’s flag if the vessel is to be rented without equipment.

Precautionary Arrest:

The new maritime law introduces significant amendments to the provisions and procedures of precautionary arrest over marine vessels, expanding the scope of marine debts and the types of vessels subject to arrest.

Expanded Marine Debts:

Article 53 lists the marine debts for which a precautionary arrest may be pursued, including:

• Damage caused by the ship due to its operation
• Loss of life or personal injury related to the ship’s operation
• Salvage operations or agreements
• Environmental damage caused by the ship
• Costs of salvaging sunken or abandoned ships
• Agreements related to ship use or carriage of goods/passengers
• Loss or damage to cargo or personal effects
• General average losses
• Towing, piloting, and supplying the ship
• Shipbuilding, repair, or equipment costs
• Port, canal, and harbor fees
• Wages due to the crew, including repatriation and social insurance
• Amounts paid on behalf of the shipowner or operator
• Insurance premiums and Takaful contributions
• Commissions, brokerage, or agency expenses
• Disputes over ship ownership or possession
• Mortgage or security rights
• Disputes arising from ship sale contracts

Broadened Scope for Vessel Arrest:

Article 54 allows the arrest of any vessel owned by the debtor at the time the arrest petition is submitted, not just the vessel related to the debt. This is a notable departure from the previous law, which restricted arrest to vessels owned by the debtor at the time the debt arose.

Limitations on Charterer Arrest:

The new law restricts the arrest of chartered ships to the validity period of the charter party agreement. Applicants seeking vessel arrest must provide financial security to cover crew and vessel maintenance expenses.

Conclusion:

The new UAE maritime law, Federal Decree-Law No. 43 of 2023, brings comprehensive reforms to vessel registration and precautionary arrest procedures, enhancing clarity and expanding eligibility while aligning with international standards. These changes are expected to streamline maritime operations and provide a more robust legal framework for maritime activities in the UAE.

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Author

Awatif Mohammad Shoqi Advocates & Legal Consultancy is a full-service law firm in UAE, duly licensed to perform legal services and advocacy in the United Arab Emirates with a head office in Dubai and branch office in Abu Dhabi.  Our firm serves and represent both local and expatriate companies and individual clients.