Management of Liabilities in Maritime Claims in the UAE

The nature of the trade through ships quite often involves them in incidents that lead to claims. The claims may be for personal injury, property damage such as damage to ships and buoys on the seashore and shore installations, cargo damage, etc. Due to the occurrence of incidents, shipowners may be exposed to substantial loss, and even they get bankrupt due to hefty claims. Subject to certain conditions, shipowners can limit their liability for claims in certain countries because of sea trade contribution to the economy. Such limitations are permitted by international conventions such as the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC 76) and rules governing the carriage of goods, such as the Hague-Visby Rules. The Hague-Visby Rules provide limitations for claims for damage or injury to cargo. The claimant is permitted to invoke the higher of the limits. The UAE ratified the 1996 Protocol through the Federal Decree Number 167 of 2020 on 10 November 2020, and it had already ratified the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 76) in 1997.

The United Arab Emirates has a vast market for sea trading. To protect and regulate shipowners’ rights and govern sea trading smoothly and correctly, it has enacted special Maritime law knowns as The UAE Maritime Law 1981 Federal Law Number 26 of 1981 on Maritime Commercial Law (the Maritime Law) to operate maritime trade. The Maritime Law is comparatively similar to the LLMC 76, but the limitations of liability claims are different from the LLMC 76. Articles 138 to 142 of the Maritime Law provide the shipowners, workers, and charterers the right to restrict the liability of any claim in accordance with the size and weight of the vessel. The limitations provided in these articles are not mandatory but are discretionary in nature. There is a possibility of many defendants in a suit on negligent behavior of any employee of a vessel. The claimants mostly nominate the shipowners, supervisors in connection with the damage caused by an employee of that vessel following the principle of vicarious liability. It must be written explicitly in the carriage deed that who would be deemed liable for a particular type of damage or negligence to avoid unnecessary burden of claims In such cases the shipowner should approach maritime lawyers to be safe from legal complications. According to Article 137 of the Maritime Law, the shipowner at civil law will be responsible for the acts and omissions committed by the master, pilot, or crew of a ship or any person who works in the vessel under the authority of the shipowner while performing his duties in the vessel. The owner shall have recourse against the person who has committed a mistake or offense. The shipowner would also be liable to the extent of claims against the master of a ship for his obligations resulting from dealings affected by him and contracts entered into by him within the limits of his lawful powers. Article 138 of Maritime Law allows the owner to restrict or limit his liability towards particular claims obligations resulting from the following causes;

The rights conferred in Article 138 of the UAE Maritime Law are not mandatory relatively discretionary. To make such rights mandatory, it is required to be incorporated in the contract of carriage. Article 140 puts some restrictions on the vessel owner regarding the limitation of his liability in the circumstances mentioned above. He cannot limit his liability if he himself commits any fault and is proved by the alleging person, obligations arising out of any assistance and rescue, rights of the master, crew, and any other person under the owner of the vessel who is on board or whose work is connected with the service thereof, and the rights of their heirs or claims resulting from nuclear damages directed against the owner of a nuclear vessel. The ship owner’s liability can be limited considering the vessel’s weight. If any material damage occurs in an incident, the liability will be limited to AED 250 for each ton of the vessel’s weight. If any bodily injury arises out of an incident, then the owner is liable to the extent of AED 500 for each ton of the vessel’s weight. The carrier shall be held responsible for the loss and damage of goods during the period of its loading for delivery till the good is delivered to the relevant port or person.

Article 276 of the Maritime Law provides the extent of limitation of the carrier’s liability for cargo claims. It restricts the liability for loss or damage to goods to an amount maximum of AED 10, for each “package or unit,” or a sum not more than AED 30 per kilo of the gross weight of the goods, whichever is higher. Furthermore, this article prevents the carrier from limiting his liability against the shipper if the shipper has already declared the nature and value of the goods in the Bill of Lading. The carrier has the liberty of proving that the shipper wrongly declared the value of the goods. If the shipper intentionally provides false particulars of the goods’ value and nature on the bill of lading, the carrier would be released from all liabilities for damage or loss to the particular goods. The shipper is allowed to agree on an upper limit of the carrier’s liability. Article 299 of the Maritime Law provides a time limitation for the liability of claims. Liability claims for any passenger’s death or injury should be claimed within two years of the occurrence of such damage. After the expiry of two years, such a claim would not be liable to be heard. The time limitation for the claims for delay in arrival is six months.