UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
The privileged debts recognised under the ML include: • legal costs associated with the preservation, sale and distribution of the ship, as well as port fees, lighthouse fees and other similar taxes and levies; • claims arising from the employment contracts of the Master, seafarers and other maritime person - nel; • compensation for salvage operations and assis - tance, along with the ship’s contribution to general average losses; • claims for compensation arising from marine acci - dents and injuries sustained by passengers and crew (excluding claims related to cargo damage); • debts resulting from contracts executed by the ship’s agent on behalf of the operator or contracts entered into by the Master outside the vessel’s port of registration; • liabilities related to loading, unloading, pilotage and towing operations; • liabilities arising from failure or damage requiring compensation on behalf of the ship’s charterers; and • total insurance premiums for the ship’s hull and equipment for the last insured voyage or insurance period, limited to one year’s premiums. Liabilities arising from a chartering contract are con - sidered maritime debts under UAE law, and a vessel can be arrested to satisfy such debts. In the case of the bareboat charter, the charterer assumes responsi - bility for these maritime debts, and creditors can seek to arrest the vessel or any other vessel owned by the charterer. The ML makes a clear distinction between privileged debts and general maritime debts. Privileged debts are claims that follow the vessel regardless of changes in ownership and are given priority for satisfaction. General maritime debts, on the other hand, do not enjoy such priority status. Regarding vessel arrests, under the ML, a claimant can arrest not only the vessel directly related to the claim but also, under specific circumstances, any sister vessel owned by the same entity at the time the claim arose. Article 30 (2) of the ML sets out a
clear procedure for the registration and enforcement of privileged debts. Article 37 of the ML establishes a time bar for mari - time claims. Specifically, these claims are subject to a one-year limitation period. However, if the vessel cannot be seized within UAE waters, this period may be extended for up to three years. An exception is made for lawsuits related to privileged debts securing debts arising from the contracts referred to in Article 29 (5), which are subject to a six-month time bar from the maturity date of the debt. Privileged creditors must assert their claims within a specified period after the sale of the vessel, and they have 30 days from the publication of the sale notice to make their claim to the purchase price. In conclusion, the ML provides a structured frame - work for dealing with privileged debts, including those arising from maritime activities such as injuries to crew members, and offers specific mechanisms for regis - tering and enforcing these debts. 5.3 Liability in Personam for Owners or Demise Charterers It is not required that the owners or demise charterers be personally liable for a vessel to be arrested. A ves - sel can indeed be arrested regardless of the personal liability of its owners or demise charterers, as long as the claim qualifies as a maritime debt under Article 53 of the ML. Privileged maritime debts attach to the ves - sel herself, and they remain valid even if the ownership of the vessel changes, meaning that the vessel can be arrested irrespective of who is currently operating her. Under Article 54, an arresting party may arrest the vessel related to the maritime debt, as well as any other ship owned by the debtor, when submitting its arrest application. However, this does not apply if the claim is based on certain maritime debts, such as those related to the ownership of the vessel, a mort - gage over the vessel or the sale of the vessel. In those cases, only the vessel directly related to the debt can be arrested. If the vessel is under a demise charter, the vessel related to the debt or any other vessel owned by the
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