Mahmoud El-Sayed Senior Associate
Resolution to safeguard seafarers in the UAE
The UAE is a shipping hub and, as a result, it is a jurisdiction that has experienced its fair share of abandoned vessels and crew. There have been a number of positive developments in addressing such issues.
In July 2021, the UAE Cabinet Resolution number 71 of 2021 (the “Resolution”) implements new regulations to deal with marine “wrecks, violating vessels, arrested vessels and derelict vessels”.
The Resolution was published in the Official Gazette on 15 July 2021 and it will enter into force on 15 September 2021. The aim of the Resolution is to ensure the protection of the marine environment, as well as the protection of seafarers in particular in circumstances where the Owners and/or the Operators abandon their vessels and/or cease to pay the wages of the crew members and/or fails to provide the vessel with the necessary supplies.
The Resolution applies to vessels in UAE waters which are considered to be “wrecks, violating vessels, arrested vessels, or derelict vessels” (as defined in the Resolution), regardless of whether the vessels are national or foreign vessels. Warships and public service ships owned by the federal and local governmental entities are excluded from the scope of the Resolution.
The Resolution defines the “violating vessel” as a vessel where (i) the Owners or Operators have failed to secure the seaworthiness of the ship as a floating marine facility, or (ii) the Owners or Operators have failed to pay the salaries of crew members for two months or more, (iii) the Owners or Operators have failed to provide supplies or fuel to operate engines or the fees and expenses of the vessel’s towing, insurance and berth, or (iv) the vessel is anchored in an undesignated area in the UAE waters or without a permit from the competent authorities, or (v) the vessel constitutes a danger or an obstacle, or (vi) the vessel’s insurance policies with respect to damage and marine liabilities have expired.
Unsurprisingly, the Resolution defines the “arrested vessels” as vessels, which are arrested as a result of an order from the court, arbitration, the Ministry of Energy & Infrastructure, or the competent port.
The “derelict vessels” include (i) vessels that have been abandoned by her Owners and/or her Operators, (ii) vessels where the person responsible for her marine navigation is unknown, (iii) vessels that have not been properly maintained by the Owners or Operators, and/or (iv) vessels that have less crew than the minimum requirement on board in the UAE waters and ports.
The Resolution has created a committee, the “Wrecks and Violating Vessels Committee”, which has the responsibility to consider the technical circumstances of the wrecks, violating vessels, arrested vessels, or derelict vessels, as well as the measures to be taken by the Committee against the Owners, Operators, Master and Ship agent. The Committee has the duty to recommend to the Ministry of Energy & Infrastructure whether a written warning is to be issued to the Owners or the Operators specifying the action that must be taken by the violating vessel, i.e. to leave the UAE waters, to remedy her situation, or to carry out any other action ordered, within a period not exceeding 60 days from the date upon which the written notice is delivered to the vessel.
Arguably, one of the most pertinent parts of the Resolution is that it provides that where a written warning is issued to the Owners/ Operators to remedy the violation and no action is taken by the Owners/ Operators, the vessel shall be sold swiftly by way of public auction at the expense of the Owners. The sale proceeds shall be deposited to the court treasury and the funds are then available for collection by those with entitlement to them.
As a separate point, a further important development of the Resolution relates to circumstances in which a violating vessel has been arrested by a court order. The court (based on a request from the Ministry of Energy & Infrastructure) can order the arresting party to cover the requirements of the vessel’s crew, supplies and fuel to maintain the ship’s seaworthiness. To the extent that the arresting party needs to incur any such costs, they will be considered as a debt owed by the vessel and may be recoverable by the arresting party in its claim..
In fact, in a recent case in which we were involved, the court obliged the arresting party to submit an undertaking to cover the costs, fees and wages of the arrested vessel. The court did not specify that this was applicable solely in circumstances where the vessel had not been abandoned or not. In this particular arrest application, our application was granted and the Vessel was arrested. This was at a point when the Resolution had not come into effect, yet the Urgent Matter Judge stated in his order that the arresting party should submit an undertaking that it will incur the living costs of the vessel’s crew members, the costs of repatriation of the crew members to their home countries (if necessary) and any costs of replacement crew members. The judge stated that if the arresting party refused to provide this undertaking, the application should be resubmitted to him in order to consider whether to continue the arrest process or not.
Therefore, it is clear that the UAE Courts are likely to oblige the arresting party to submit the required undertaking in order to avoid the humanitarian crisis of the crewmembers when the vessel is abandoned. This is a welcome development for abandoned crewmembers and port authorities in particular as the ports and the abandoned crewmembers have previously tended to face significant difficulties when the Owners/Operators have abandoned their vessels. The ports often inadvertently find themselves responsible for the safety of the crew and the vessel and the crew, of course, can be left in unsafe and challenging positions. However, the Resolution shall definitely be of concern to the arresting parties, who will already be owed debts by the Vessel/Owners because if the Owners abandon the vessel, the arresting party may incur the costs of maintaining the Vessel and its crewmembers. Whilst in theory, such costs are recoverable; there is no certainty of recovery as the vessel sale proceeds may not be sufficient to cover some or all of these costs.
The Resolution represents a significant development for the UAE maritime industry, particularly in the context of the recent trend of vessel abandonment by their owners at the UAE ports. First and foremost, the Resolution provides a deterrent to vessel owners considering to abandon their vessels or their vessel is considered as a violating vessel due to the significant penalties faced. Secondly, it offers a safety net for crewmembers of such abandoned vessels or arrested vessels and works towards averting humanitarian crises, which would be difficult for the UAE port authorities to manage. It also offers certainty to the UAE port authorities, who will not have to bear the responsibility of maintaining the Vessel and providing for its crew.