UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
by providing valid grounds, such as the debtor being based outside the UAE or there being a risk of losing the security. The process of arresting bunkers requires strict adher - ence to procedural formalities and the presentation of sufficient evidence that clearly establishes the debt and proves that the bunkers belong to the debtor. 5.7 Sister-Ship Arrest A sister-ship arrest is possible in the UAE, as permit - ted under Article 54 of the ML. A claimant may arrest a sister ship owned by the debtor provided that the ship was owned by the debtor at the time the maritime debt was incurred. However, there are some restrictions. Sister-ship arrests are not allowed in cases where the debt relates to a dispute over the ownership or joint ownership of a vessel or involves issues concerning the use or rights to profits arising from a vessel. Addi - tionally, in cases involving maritime mortgage claims, the arrest is limited to the mortgaged vessel only. Thus, while a sister-ship arrest is generally allowed, certain specific claims, such as those involving own - ership disputes or mortgages, would prevent such an arrest. 5.8 Other Ways of Obtaining Attachment Orders Apart from ship arrests, there are several other pos - sibilities for obtaining attachment orders to secure a debt. Attachment of Goods on Chartered Ships Under Article 133 of the ML, a ship charteree/lessor can seek an attachment order for goods transported on a chartered vessel. These goods serve as security for the payment of the vessel’s hire and associated charges. If the charterer’s hire remains unpaid, the charteree/ lessor can petition a magistrate of summary justice to place the goods in the custody of a third party and seek their sale, either in whole or in part. This can occur unless the charterer provides a guarantee for the outstanding debt and covers the costs associated with the seizure, custody and sale.
The charteree/lessor retains a lien over the goods transported on the chartered vessel to secure pay - ment of the hire and associated charges. This lien remains effective for 15 days after the delivery or deposit of the goods, unless a third party in good faith acquires a real right over them. Importantly, the lien remains valid even if the goods are commingled with other goods. Attachment of Various Assets Under Articles 247 and 252 of the CPC, attachment orders can be sought for a variety of assets belong - ing to the debtor. These assets can include bank accounts, real estate, machinery, cargo, vehicles, shares and office equipment. Attachment orders can also extend to assets held by third parties under Article 252 of the CPC, where the court may impose conditions for enforcement, such as requiring proof of ownership of the assets to be attached. The specific attachment order granted will depend on the nature of the debtor’s assets and the details of the case, allowing the creditor flexibility in securing the debt through various types of property. Together, these provisions provide multiple avenues for creditors to secure their claims through attachment orders on a wide range of assets – ie, not limited to vessels alone. 5.9 Releasing an Arrested Vessel To release an arrested vessel, the owner or any inter - ested party must provide security in the form of a cash deposit, a manager’s cheque, a bank guarantee issued by a licensed UAE bank or a letter of under - taking (LOU) from P&I clubs or financial institutions pursuant to Article 57 (3) of the ML. The competent court will have the discretion to accept these LOUs as sufficient security for the vessel’s release. 5.10 Procedure for the Judicial Sale of Arrested Ships Judicial Sale The judicial sale of an arrested vessel proceeds after the court issues a final judgment. Once the judgment is made, the court will:
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