UAE UNVEILS NEW MARITIME LAW, STRENGTHENING ITS POSITION AS A SHIPPING HUB

28 December 2023

Suchi goel

The UAE has introduced a new Maritime Law, Federal Decree-Law No 43 of 2023, which will replace the 1981 Maritime Law six months after its publication.

Dubai: In This comprehensive update to the maritime legal framework is expected to significantly enhance the UAE's maritime landscape and solidify its status as a regional shipping hub. Federal Decree-Law No. 43/2023 on Maritime Law, set to take effect from March 2024. This legislative move marks a significant departure from the current maritime law, introducing substantial modifications that are poised to impact the shipping, legal, and commercial sectors.

KEY PROVISIONS OF THE NEW MARITIME LAW

• Enhanced Precautionary Arrest Procedures: The new law mandates that applicants seeking the arrest of a vessel must provide financial security to cover the expenses of the crew and vessel maintenance.

• Expanded Maritime Debt Definition: The definition of "maritime debt" has been broadened to encompass claims arising from environmental damage caused by the vessel, wreckage removal, and port fees.

• Sister Vessel Arrest: Arrest of a sister vessel is now permissible, provided it was owned by the debtor at the time of the arrest application. This differs from the 1981 law, which required the debtor to own the sister vessel at the time the debt arose.

Foreign Owned Vessels: The 2023 Maritime Law now allows vessels owned by foreign entities and individuals to register under the UAE flag, a departure from the previous exclusivity granted to UAE nationals and companies. Article 13(b) outlines the expanded eligibility criteria, enabling vessels to fly the UAE flag if owned by individuals or entities with a domicile, business center, or office managing the vessel within the UAE. This modification opens the door for foreign nationals and GCC companies residing in the country to register their vessels under the UAE flag.

Alignment with Arrest of Ships Convention,1999: The new law aligns with the broader 1999 Arrest of Ships Convention, expanding the range of actions available to creditors and the scope of claims for which vessels can be arrested in the UAE. While this alignment may lead to an uptick in maritime claims, the introduction of Article No. 56 places an obligation on the party initiating a vessel's arrest to provide a financial guarantee. This guarantee aims to ensure the safety of the vessel and its crew during the arrest period. This development is expected to streamline and mitigate speculative claims, offering crucial protection to ship owners

IMPLICATIONS AND IMPACT

The new Maritime Law is expected to have several positive implications for the UAE's maritime sector:

• Strengthened Legal Framework: The comprehensive and modernized legal framework will provide greater certainty and predictability for maritime businesses operating in the UAE.

• Enhanced Protection for Creditors: The expanded definition of maritime debt and simplified arrest procedures will strengthen the position of creditors seeking to recover maritime-related debts.

• Improved Environmental Protection: The inclusion of environmental damage claims within the scope of maritime debt underscores the UAE's commitment to environmental protection.

Overall, the new Maritime Law is a significant step forward for the UAE's maritime sector, aligning it with international best practices and further solidifying its position as a leading maritime hub in the region..

IN CONCLUSION

The UAE's enhanced focus on consumer protection may signal stricter enforcement of the law, particularly in Dubai. Businesses should proactively comply with the new regulations to avoid penalties and protect their brand reputation. It is advisable for consumers to stay updated regarding their rights outlined in the Consumer Protection Law and promptly report any violations they encounter to the Consumer Protection Corporation.

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