UAE Trends and Developments Contributed by: Sujan Malhotra and Vaidehi Kolhe, Ship Law Sea FZ LLE
• the underlying policies being governed by English law; • both parties holding themselves out as providers of marine war risks insurance under London market wordings; and • the specialised nature of marine war risks rein - surance, which operates in conjunction with the Marine Insurance Act 1906 and English jurispru - dence to promote commercial certainty. Defence costs and implied terms Under English law, and following Baker v Black Sea & Baltic General Insurance Co. Ltd. [1998] 1 WLR 974, reinsurance contracts do not ordinarily cover defence costs absent express wording or universally accepted market practice. ABNIC adduced expert evidence that, in the UAE and Middle East reinsurance market, it is a uniformly accepted custom for reinsurers to reimburse defence costs incurred by the reinsured in proportion to their share of the risk. Justice Black KC accepted this evi - dence and held that such market practice gave rise to an implied term requiring AWRIS to indemnify ABNIC for defence costs properly incurred. This aspect of the decision represents a significant development, recognising regional market custom as capable of grounding implied contractual terms, even where this departs from orthodox English law approaches. Corporate Law Reform and Its Impact on the Maritime Sector The enactment of Federal Decree-Law No 20 of 2025, amending the Commercial Companies Law (Federal Decree-Law No 32 of 2021), introduces reforms with particular significance for maritime businesses. Key reforms Multi-class share structures Limited liability companies (LLCs) may now issue multiple classes of shares with differing rights and privileges, subject to regulatory approval. This reform facilitates more sophisticated capital structures, ena - bling preferred equity, differential voting rights and tailored investor arrangements.
Enhanced exit and succession mechanisms LLCs and private joint stock companies may incor - porate drag-along and tag-along rights, liquidity pathways and succession planning directly into their constitutional documents, rather than relying solely on shareholders’ agreements. Company re-domiciliation and conversion The new Article 15 bis permits companies to transfer registration between emirates, free zones and finan - cial free zones while retaining legal personality, con - tracts and obligations. This enables seamless migra - tion without liquidation or re-establishment. Clarification of company nationality All companies established in the UAE, including free zone and financial free zone entities, are confirmed to hold UAE nationality, with significant implications for tax treaty access and corporate tax relief. Implications for maritime businesses These reforms provide ship-owning companies and maritime investors with greater flexibility in structur - ing ownership, financing fleets and facilitating exits. When considered alongside the New Maritime Code’s liberalisation of the UAE ship registry, the ability to re-domicile companies while retaining legal continu - ity enhances the attractiveness of establishing ship- owning structures in the UAE. International Maritime Conventions, Compliance and Environmental Regulation WRC 2007 The UAE has acceded to the WRC 2007 through Fed - eral Decree No 159 of 2024, introducing a compre - hensive statutory regime governing wreck removal, liability, insurance and enforcement. While the Convention preserves a ship-owner’s right to limit liability under international limitation regimes, the UAE has exercised a reservation preventing limi - tation for wreck removal claims in UAE waters. This creates potentially unlimited exposure for ship-owners and insurers and reflects a strong policy commitment to environmental protection. The UAE has also mandated compulsory insurance for vessels of 300 GT and above and will now be able to
649 CHAMBERS.COM
Powered by FlippingBook