New Maritime Law in the UAE
Key Developments
Vessel Registration- The 2023 Maritime Law provides details on vessel registration, allowing vessels owned by foreign entities and individuals to register under the UAE flag, under certain conditions. The new legislation allows UAE residents of any nationality or companies domiciled in the UAE to own and register vessels in their names.
Article 13 (1) (b) of the New Law states that a vessel may be registered in the Ministry’s Ship Register if the majority of the shares are owned by natural persons or legal persons who have the UAE nationality or the nationality of any of the countries of the Gulf Cooperation Council or who have a domicile, headquarters, or ship management office in the UAE.
Also, to register a ship in the Ministry’s Ships Register, a vessel shall not be more than (20) twenty years old from the date of completion of its shipbuilding in accordance with the shipbuilding contract, except for passenger ships, which shall not be more than (10) ten years old.
Arrest Provisions- Article 54 (1) allows the creditor to apply for the arrest of the vessel to which the debt relates or any other vessel owned by the debtor, in the event that the vessel is owned thereby at the time of arrest order application, even if the vessel was prepared for a voyage.
Under Article 59 of the New Maritime Law, the arresting party should file the case within five working days from the date of the arrest order. Additionally, Article 56 introduces the requirement of a financial guarantee for arrest orders, submitted by the creditor to fulfill the necessary needs of the security and safety of the vessel and its crew during the arrest period.
Acceptance of Letter of Undertaking- under the current law, UAE Courts do not accept an LOU as a valid security measure to lift a vessel arrest. It required the owners of the vessel to provide the Court with cash deposits, bank manager’s cheques, and guarantees from local banks.
A fundamental change in Article 57 (3) of the New Law, stipulates that letters of undertaking issued by protection and compensation clubs or by financial institutions that are accepted by the competent court shall be considered a reason for lifting a vessel arrest.
The provisions for the acceptance of LOUs shall be specified in the Executive Regulations.
Pascale Dona joined Thomson Reuters in 2014 as Content Specialist. In 2007, Pascale graduated from the Lebanese University with a Bachelor’s Degree in Law, then moved to France and completed her Master’s degree in International Law from Nice Sophia Antipolis University. Pascale has more than 10 years of experience as legal Specialist in Lebanon and UAE. She is a native Arabic speaker and proficient in English and French.
Pascale is currently a Senior Legal Editor for Thomson Reuters MENA. She is based in Dubai and is responsible for maintaining and providing the latest legal content for the MENA region.