MOZAMBIQUE Law and Practice Contributed by: José Miguel Oliveira, Sara Alves Lourenço, Kenny Laisse and Caio de Mello Ferreira, VdA
6.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction In accordance with Articles 2, 4 and 8 of the Brussels Convention, Mozambican courts may order the arrest of a vessel in respect of any mar - itime claim. However, pursuant to Article 7(3) and (4) of the Brussels Convention, if the parties have agreed on submitting the dispute to a different jurisdiction or to arbitration, the Mozambican court may fix the time within which the claim - ant should commence the main proceedings. If the action or proceedings are not brought within the time so fixed, the defendant may apply for the release of the vessel or of the bail or other security. Outside the scope of the Brussels Con - vention, Mozambican courts will also accept the arrest in respect of claims subject to foreign arbi - tration or jurisdiction clauses where the vessel is within their territorial jurisdiction. 6.5 Domestic Arbitration Institutes Currently, there is no domestic arbitration insti - tution that specialises in maritime claims active in Mozambique. Hence, in such matters general arbitral bodies will be competent, governed by Law 11/99. 6.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses In the event of a breach of foreign jurisdiction or arbitration clauses, the defendant must invoke such before the court that lacks jurisdiction and ask for the claim to be dismissed. 7. Ship-Owners’ Income Tax Relief 7.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Companies incorporated in Mozambique will be subject to the general taxation regime set
forth for other companies incorporated or with a permanent establishment in the country – ie, they will be subject to 32% corporate income tax on their taxable profits. This notwithstand - ing, according to the Code of Fiscal Benefits, tax benefits and reliefs may be granted to hold - ers of investment projects approved under the Investment Law. Non-resident shipping compa - nies that obtain income from chartering vessels for fishing or cabotage activities are subject to a reduced 10% withholding rate (the general rate is 20%, if a double tax treaty is not applicable). 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration If the parties have not included force majeure or hardship clauses in their contracts, it is par - ticularly important to take into consideration the general Mozambican legislation, namely the provisions of the Civil Code regarding abnor - mal changes in circumstances (Articles 437 and 438) or impossibility of performance of contracts (Articles 790 to 793). Abnormal Changes in Circumstances Article 437 of the Civil Code applies whenever the circumstances on which the parties based their decision to enter into an agreement have suffered an abnormal change. As a result, the party that has been adversely affected by that change may terminate the agreement or ask for its modification based on equity, provided the party demonstrates that it could not have pre - dicted the event and its consequences and that there is a causal link between the event and the failure to perform.
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