UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
are certain instances where privileged debts can be registered in the ship register, provided the contract is notarised. These instances include debts related to failure or damage that require compensation for the ship’s charterers (Article 29(7)) and insurance premiums (Article 29(8)). 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 personnel; • compensation for salvage operations and assistance, along with the ship’s contribution to general average losses; • claims for compensation arising from marine accidents and injuries sustained by passen - gers 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, pilot - age 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 considered 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 responsibility 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 ves - sel regardless of changes in ownership and are given priority for satisfaction. General maritime debts, on the other hand, do not enjoy such pri - ority status. Regarding vessel arrests, under the ML, a claim - ant can arrest not only the vessel directly related to the claim but also, under specific circum - stances, 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 reg - istration and enforcement of privileged debts. Article 37 of the ML establishes a time bar for maritime claims. Specifically, these claims are subject to a one-year limitation period. How - ever, 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 aris - ing 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 publica - tion of the sale notice to make their claim to the purchase price. In conclusion, the ML provides a structured framework for dealing with privileged debts, including those arising from maritime activities such as injuries to crew members, and offers
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