Liabilities Of Shippers Under Maritime Law

09 Jan 2023

With the waters being among the most ancient and the most significant means of trade movements across the world, it is inevitable that there be a regulatory mechanism to regulate and control the movements of waters. It is to meet this necessity that a body of laws, conventions, and treaties known as maritime laws that govern private maritime business and other nautical matters, such as shipping or offences occurring on open water is formulated. In the international context, rules governing the use of the oceans and seas are known as the Law of the Sea.

It is maritime law, a body of rules that governs everything that goes on in the sea and open waters. These rules help resolve numerous disputes that occur on waters and ensure that the people and organizations working on such lines behave correctly and are protected.

Commercially, maritime law is a system of private law relating to ships and the commercial business of shipping.

Considering the maritime industry, UAE is among the most influential countries in developing the maritime industry and has established its pioneering position among the leading maritime hubs globally. 

UAE holds a pivotal position in the shipping industry even within the Middle East with 12 commercial trading ports and contributes significantly to the GDP of the country. In fact, UAE’s Jebel Ali Port as well as its free zone area is ranked among the top 10 world’s largest sea ports and has the world’s largest man-made harbour.

UAE’s maritime is governed by federal law number 26 of 1981 (the Maritime Code), considering a wide range of maritime issues ranging from the registration of vessels and ownership, towage and pilotage, crews and their contracts, mortgage and arrest, charter parties and contracts of carriage, collisions and salvage to general average and marine insurance. The maritime code was adopted in conformity with contemporary international maritime rules.

Considering the UAE court system, all maritime disputes are attended to in civil and commercial courts of the relevant emirate in the state. The UAE does not have specialised admiralty courts to hear shipping cases despite the fact that some of the individual judges do have significant shipping experience. Cases are addressed in the Arabic language and arguments are carried out by exchange of written pleadings and submission of documents by parties before the case is reserved for judgment. And the parties should take legal advice from maritime lawyers.


The UAE courts assume strict jurisdiction over disputes in certain circumstances invalidating the existence of any foreign jurisdiction clause agreed between parties. The following scenarios present exclusive jurisdiction to UAE:

  1. If one or more of the defendants is domiciled or has a place of business in the UAE;
  2. If the loss or damage was suffered in the UAE; or
  3. If the contract was concluded or performed or was supposed to be performed, fully or partly in the UAE. 

The limitation periods for maritime claims in the UAE are as follows:

  1. Three years for claims in tort; 
  2. One year for a charter party and cargo claims and 90 days for third-party recourse actions; 
  3. Two years for salvage claims; 
  4. Two years for marine insurance claims; 
  5. Two years for passenger claims relating to death or personal injury; 
  6. Six months for claims for delays; 
  7. One year for claims for the carriage of luggage; 
  8. Two years for compensation claims arising out of collisions; and
  9. One year for rights of recourse of a defendant ship against another ship for settled claims for death or personal injury. 

The UAE introduced federal law number 6 of 2018 on Arbitration 2018 which clarifies the procedures to challenge an arbitral award before an onshore UAE court. In addition to federal law number 6 of 2018 on Arbitration 2018, the arbitration is governed by federal law number 11 of 1992 concerning Civil Procedural Law.

Regard to foreign arbitral awards is enforceable in the UAE. The country became a signatory to the UN Convention on recognition and enforcement of foreign arbitral awards in 1958 and the New York convention in 2006.

According to the New York Convention, the enforcement of foreign awards can only be refused on the following grounds:

  1. The parties to the arbitration agreement are under some incapacity.
  2. The arbitration agreement is not valid under the law to which the parties subjected it or the law of the country where the arbitral award was made.
  3. The party against whom the arbitral award is invoked is not given proper notice of the appointment of the arbitrator or of the proceedings.
  4. The arbitral award deals with a difference not contemplated or falling within the terms of submission to arbitration.
  5. The composition of the arbitral authority or the arbitral procedure was not under the parties’ agreement or the law of the seat of the arbitration.
  6. The arbitral award has not yet become binding on the parties or has been set aside or suspended by the courts at the seat of arbitration.
  7. The subject matter of the difference is not capable of settlement by arbitration under the law of the country where enforcement is sought.
  8. The enforcement would be contrary to the public policy of the state in which enforcement is sought.

According to the Maritime Code with respect to responsibilities and liabilities, it is the carrier’s responsibility to put the vessel in a seaworthy condition suitable for the carriage of the goods. Furthermore, the carrier is also responsible to stow and storing the cargo within the hold of the vessel, unless agreed otherwise and carrying the same in good safe condition from the port of loading to the port of discharge.

Additionally, the carrier is responsible for any delay occurring in delivering the goods unless it is proved that the delay arises out of one of the causes set out in Article 275.

Observing the carrier’s responsibility, the liability of the carrier in all circumstances for loss or damage suffered by the goods is limited to a sum not exceeding Ten Thousand Dirhams (AED 10,000) for each package or unit used to calculate freight, or a sum not exceeding thirty dirhams per kilogram per gross weight of the goods, whichever is greater.

If packages or units are grouped in cases, boxes or other containers and the bill of lading specifies the number of packages or units contained in each container, each of these will be deemed to be a package or unit in connection with the fixing of the upper limit of liability and if the container is not owned or provided by the carrier and it is lost or destroyed, it will be deemed to be an independent package or unit.

It is not permissible for the carrier to limit his liability against the shipper if before the loading occurs, the shipper has provided particulars of the nature and value of the goods and the importance relating to the preservation thereof, and such particulars are mentioned on the bill of lading. 

An upper limit of liability of the carrier that is different from the limit set out can be reached by way of a special agreement between the shipper and the carrier or his representative. 

Under the Maritime Code, the shipper is responsible to the carrier for any inaccuracies in the information provided.  In no case shall the carrier be responsible for loss or damage sustained by the goods if the shipper has deliberately stated false particulars on the bill of lading relating to the nature of the goods.

In most circumstances, the carrier may limit his liability to the higher of Dirhams 10,000 per package or Dirhams 30 per kilogram of gross weight of the goods.

To conclude, legal maritime mechanism is wide. Over centuries, maritime transport has formed to be the backbone of international trade and global economy. The authorities all over the world, time and again take initiatives to develop and flourish the maritime and shipping industry to promote trade and economic security. While the UAE maritime legislation is wide and varied, just a review of merely a few, selected set of areas is enough to prove the nation’s ambition to maintain and grow as a world leader in the maritime and shipping industry.