UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
4.8 Other Ways of Obtaining Attachment Orders Apart from ship arrests, there are several other possibilities 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 char - teree/lessor can petition a magistrate of sum - mary 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 sei - zure, custody, and sale. The charteree/lessor retains a lien over the goods transported on the chartered vessel to secure payment 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, attach - ment orders can be sought for a variety of assets belonging 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 own - ership 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 flex - ibility in securing the debt through various types of property. Together, these provisions provide multiple ave - nues for creditors to secure their claims through attachment orders on a wide range of assets – ie, not limited to vessels alone. 4.9 Releasing an Arrested Vessel To release an arrested vessel, the owner or any interested 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 undertaking (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. 4.10 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: • issue a notification regarding the sale; • notify the vessel registry and any other loca - tions designated by the court; and • appoint an expert to assess the vessel’s value and set the initial price for the sale. The court will also specify the basic price for the vessel, the terms and conditions governing the sale and the time of the auction.
583 CHAMBERS.COM
Powered by FlippingBook