UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
Articles 10 and 11 briefly touch on the transfer of title, payment terms and guarantees for defects. These are generally considered commercial matters and are expected to be addressed within the ship-building contract itself. Article 12 (3) grants the Cabinet the authority to confer UAE nationality on a vessel owned by a legal entity, provided the entity is established under an interna - tional agreement between shareholders from different jurisdictions, including the UAE. 1.4 Requirements for Ownership of Vessels To be registered in the ship register, a vessel must meet the five key conditions outlined in Article 13 of the ML. These conditions are as follows: • intended use – the ship must be intended for navi - gation in UAE waters, coastal navigation between UAE ports or navigation on the high seas; • ownership requirements – the majority of the ship’s shares must be owned by natural or legal persons who are either nationals of the UAE or another Gulf Cooperation Council (GCC) country, or by individu - als or entities that have a domicile, business centre or ship management office in the UAE; • age limit – the ship must not be older than 20 years, measured from the completion of its con - struction, with the exception of passenger ships, which must not be more than ten years old; • approved specifications – the ship’s drawings and specifications must be approved by the Ministry of Energy and Infrastructure or its authorised repre - sentative upon inspection; and • valid certifications – the ship must hold valid international certifications verifying its suitability for maritime navigation, issued by a classification society authorised or recognised by the Ministry. Foreign ownership of vessels is now permitted under Article 13 (1)(b) of the ML, which allows vessels owned by foreign entities or individuals to be registered under the UAE flag, a privilege that was historically reserved for UAE nationals and companies with a majority of Emirati shareholders. Vessels can now be registered under the UAE flag not only when the majority of shares are held by UAE
nationals or companies from other GCC countries, but also when owned by individuals or entities with a domicile, business centre or office managing the vessel within the UAE. This broadens the scope of who can register vessels under the UAE flag, making it accessible to foreign nationals and GCC companies residing in the country. As a result, under the new ML, coastal service providers and supply vessels, which previously had the option to operate under foreign flags, will now be required to register under the UAE flag. Bareboat Charter In Article 18 (1) of the ML allows the charterer of a ship registered abroad, which meets the registration crite - ria for a UAE-flagged vessel (as outlined in Article 13), to request its registration with the Ministry provided that (i) the ship is “not equipped” and (ii) the charter period lasts at least six months. Bareboat Charter Out Article 19 (1) grants the owner of a UAE-flagged ves - sel the licence to have the ship fly the flag of another country if the owner wishes to lease it “unequipped” to a charterer who intends to register the ship abroad. At a minimum, the licence application must include (i) the bareboat charter agreement for the unequipped vessel and (ii) a letter from the ship’s registration authority abroad confirming that the charterer’s state has approved the ship’s registration and the flag under which it will sail as stated in Article 19 (2) of the ML. 1.5 Temporary Registration of Vessels The laws of the UAE do not permit the temporary or dual registration of vessels. There are no provisions in the applicable legislation that allow for such regis - trations. 1.6 Registration of Mortgages The authority responsible for maintaining the registra - tion of maritime mortgages in the UAE is the Ministry of Energy and Infrastructure, as stated in Article 13 (1) of the ML. According to Article 24 (4) of the same law, all legal transactions and rights, including mort - gages, affecting a ship must be documented in the ship register.
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