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New Maritime Law in the UAE

Over the last three decades the UAE has developed into a significant maritime cluster. Its strategic position between Asia and Europe and its developed infrastructure has attracted many shipping and trading companies to the region.

This includes MECO who were the first P&I Club managers to identify the UAE as a future hub when we set up in 2013. We also have a team of legal and maritime professionals, who operate out of the Dubai office, providing claims management and legal assistance to our clients.

The UAE has recently updated its federal maritime law. The previous law was Federal Law No. 26 from 1981 and this has been replaced by Federal Decree-Law No. 43 of 2023 on Maritime Law, which came into effect on 29 March 2024 (the “Maritime Law”) and represents a significant update.

Some of the key changes are outlined below.

Flag

Foreign-owned vessels can now be registered under the Emirati flag. Previously, to qualify for an Emirati flag the vessel had to be beneficially owned by an Emirati citizen or a business controlled by an Emirati.

The 2023 law extends ownership to UAE nationals, nationals of GCC countries or individuals who have a business centre or office in the UAE for ship management operations.

Time Bars

Time bars have been enshrined in law which was not the case with the previous federal decree. Whilst they mostly follow the international position there are some anomalies.

Maritime Arrest

The new law has updated the list of maritime claims in respect of which a vessel may be arrested and has also introduced the concept of sister ship arrest. The law aligns the UAE to a greater extent with other jurisdictions where it is possible to secure maritime claims. The new law also includes a number of specific categories where a vessel may be arrested; these include port fees, salvage and GA charges.

Limitation of Liability

Owners can now constitute a limitation fund for maritime claims which was not always the case previously.

As to cargo claims, the UAE has not specifically ratified the Hague Visby Rules, but the new law has introduced a limitation figure per package that is much more aligned with international regulations.

Conclusion

The new UAE Federal Decree on maritime law introduces a number of changes to vessel registration and the right of arrest. It also brings the UAE line more into line with international standards in other areas. We will have to see how these changes are implemented by the courts to have a clearer idea of how they will be applied in practice.

The MECO Group
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