UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
prominence as other critical details such as the names of the shipper and carrier. If the arbitration clause is incorporated by reference from the char - terparty, the reference must be specific and clearly identify the dispute resolution mechanism. For instance, in Al Buhaira National Insurance Co v The Shipping Corporation of India Limited (Cassation No 363 of 2011), the Dubai court of cassation ruled that a general incorporation clause referring to terms in a charterparty, including the arbitration clause, was sufficient for enforcement. The court stated that even if the charterparty’s details were not fully specified, the incorporation clause was enforceable as long as it explicitly referred to arbitration in the B/L. Offshore Jurisdiction (DIFC and ADGM) In the DIFC, which follows English common law, the approach to arbitration clauses in B/L is more flexible. • General terms of incorporation: the DIFC courts may recognise arbitration clauses even if they are incorporated by general terms. As seen in cases such as The Merak (1964), the English court rec - ognised that a general reference to “all terms of the charter party” was sufficient to incorporate an arbitration clause if the clause was broad enough to apply to disputes under both the charterparty and the B/L. • Binding arbitration clauses: as long as the arbitra - tion clause applies to disputes arising from both the B/L and the charterparty, it may be considered enforceable, even if the specific details of the char - terparty are not included in the B/L. Challenges With Incorporation by Reference The incorporation of an arbitration clause by reference is more complicated when a B/L is transferred to a third party (such as a consignee). Since the third party might not have knowledge of the charterparty’s terms, the validity of such incorporation can be disputed. The third party may challenge the arbitration clause, argu - ing that it was not properly incorporated or that they did not consent to it. Legal Risks for B/L Transferees Transferees of a B/L should be cautious when accept - ing an endorsement, as they may inadvertently agree
to an arbitration clause they did not negotiate. This could lead to legal disputes about the enforceability of the clause in the onshore UAE jurisdiction, where “express terms” are generally required for incorpora - tion. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 is applicable in the UAE. The UAE ratified the Conven - tion on 31 August 2006 without any reservation. As a result, foreign arbitral awards are generally recognised and enforced in the UAE, subject to the conditions outlined in the Convention. In terms of domestic law, the recognition and enforce - ment of foreign arbitral awards in the UAE are gov - erned by Articles 222, 223 and 225 of the CPC, spe - cifically under Articles 222 and 223 read together, which provide the conditions under which foreign arbitral awards may be refused recognition or enforce - ment. The general rule is that foreign arbitral awards, even from non-signatory states, are recognised and enforced in the UAE, with certain statutory exceptions. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction Courts in the UAE can order the arrest of a vessel or the attachment of assets, even if the relevant claim is subject to a foreign arbitration or jurisdiction clause. This is because the UAE courts have the authority to arrest vessels in their territorial waters, regardless of whether they have jurisdiction to adjudicate the sub - stantive claim or whether the claim is subject to a foreign arbitration or jurisdiction clause in a contract such as a B/L or charterparty. While the UAE is not a member of the International Convention on Arrest of Ships of 1999, it follows its own legal framework, which allows for the arrest of vessels based on maritime debts recognised under Article 53 of the ML, including claims that may be subject to foreign arbitration or jurisdiction clauses. Therefore, even if a contract stipulates foreign arbitra - tion or jurisdiction, this does not preclude the possibil - ity of a vessel being arrested in UAE waters to secure the claim.
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