UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for May 13, 2010

Maritime Accidents in the UAE

Federal Law No. 26 of 1981, UAE Maritime Trade Law

Maritime Accidents in the UAE

Maritime Collision

Article 318:

  1. If a collision occurs between two ships or between ships and boats sailing in the territorial waters, compensations for damage to ship cargo and harm to persons on board shall be settled according to the provisions mentioned in this section, regardless of the legal rules applicable in the waters where the collision occurred.  With the exception of rafts bound to a fixed anchor, every floating object shall be considered, according to the provisions of this article, a ship or boat for territorial navigation according to the situation.
  2. The above mentioned paragraph shall apply even if no collision occurs in determining compensation for damage caused by one ship to another or to cargo or persons on board if such damage is caused by the ship’s movement, negligence in navigation or ignoring the regulations laid down by national legislation or international agreements for regulating traffic.
  3. Provisions of maritime collisions shall apply even if one of the ships involved is used for public services by the government or one of its public institutions.


Article 319:

  1. If a collision is caused by acts of God, if doubts arise concerning the cause of the collision or if these causes are unknown, each ship is responsible for its own damage.
  2. The above mentioned paragraph shall also apply if one or both ships were anchored when the collision occurred.


Article 320:

The ship, which by fault, caused a collision, shall be liable to pay compensation for the damage caused by that collision.

Article 321:

  1. If a collision is caused by joint faults, each ship’s liability shall be estimated according to the percentage of fault ascribed to it.  Nevertheless, when circumstances hinder the estimation of the proportion of fault of each ship, liability shall be distributed among them equally.
  2. Ships shall be asked to pay for the damage caused to the ships, goods, luggage, or other properties of crew or any other person on board.  Their share of compensation for the damage shall be in proportion to the proportion of their faults as mentioned above and without having to pay for the share of other involved parties.
  3. The liability shall be joint if the damage causes the death or injury of a person on board.  The ship which pays more than its share has the right to make a claim against other involved ships.


Article 322:

The liability stated in this section shall apply to collisions caused by a pilot’s fault even if the piloting is compulsory.

Article 323:

Legal evidence shall not apply to liability for collisions.

Article 324:

  1. The captain of each ship involved in a collision shall help the other ship, its crew and its passengers as far as possible and without exposing his ship, crew and passengers to serious dangers.  He shall inform the other ship of the name of his ship, port of registration, the place it is coming from and its destination.
  2. The ship’s owner or carrier shall not be liable for the captain’s violation of the previously mentioned rules unless the violation occurred according to clear directions from them.


Article 325:

1. A plaintiff may file a suit on a maritime collision before the following courts:

a.)  The court which has jurisdiction over the country of the defendant.

b.)  The court which has jurisdiction over the registering port of the defendant’s ship.

c.)   The court which has jurisdiction over the place where the defendant’s ship which caused damage or any of his other ships has been impounded, or the court which has jurisdiction over the place where such impoundment was possible.

d.)  The court which has jurisdiction over the place where the collision occurred if in ports or territorial waters.

2. If the plaintiff chooses one of the courts mentioned in the above paragraph he shall not file a new suit based on the evidence before another court unless he withdraws the first suit.

3. Disputing parties may agree to file the suit before a court other than the courts mentioned in the first paragraph, or present the dispute for arbitration.

4. A defendant may sue for compensation for the damage, which resulted from the collision before the same court.

5. In case there is more than one plaintiff, and if one of them files the suit before a court, the others may file the same suit against the same defendant before the same court.

Article 326:

In case of denial and absence of legal excuses, the following shall not be heard:

  1. Cases of compensation caused by maritime collisions after a lapse of two years from the date of the collision.
  2. Cases of reclamation mentioned in paragraph (3) of Article (321) after the lapse of one year from the date of death.

Maritime Employment Contracts in the UAE

Federal Law No. 26 of 1981, UAE Maritime Trade Law

Article 169:

  1. Under a maritime contract, a person shall work on a ship under the supervision of a carrier or a captain in return for remuneration.
  2. The contract shall be subject to the provisions of the laws governing labor relations and social insurance, unless special provisions in this law and its regulatory orders stipulate the contrary.
  3. The provisions of maritime employment contracts stipulated in this law or in its regulatory orders do not apply to persons working on ships whose tonnage is less than 50 tons.


Article 170:

  1. The maritime employment contract shall be a written contract, but if it is not, a member of the crew alone shall have the right to prove it by all legal means available.
  2. The captain shall retain copies on the ship of the maritime employment contracts for the persons employed thereon.


Article 171:

The maritime employment contract shall include the date of the commencement of the contract, the place where it was signed, the name, age, nationality and place of residence of the crew members, the kind of work a crew member is required to perform, his wage or salary, the number and date and place of issue of the marine permit and license obtained.

Article 172:

Subject to the provisions of endorsed international accords, the daily working hours shall be eight hours and extra hours worked shall be rewarded at a rate double the pay agreed to in the contract.  With the exception of the case stipulated in Article 178, the total working hours, including extra hours, shall not exceed 12 hours per day.

Article 173:

A maritime employment contract containing an expiry date shall expire at the entered date with no need for notice.

Article 174:

The maritime employment contract made for one or two voyages only shall not expire before the ship arrives at the agreed upon destination when the ship is not carrying cargo and shall only expire after the cargo is unloaded at the agreed upon destination when the ship is carrying cargo.

Article 175:

When the maritime employment contract is made for an unspecified term it shall be considered valid for one year after which the contract can be terminated through a ten day notice served by either of the two parties of the contract.  Should the ten days required for the notice elapse while the ship is on the high seas, the contract shall extend until the ship reaches port where the contract was made if the notice was sent by the carrier.  Where the notice is served by a crew member, the contract will stand until the ship reaches the first port. 

Article 176:

A maritime employment contract shall be terminated by force of the law if the ship is abandoned, destroyed or its ownership or registration changed.  This termination of the contract shall apply even if the contract specifies an expiry date for its duration.  In such a case the crew member shall be entitled to the appropriate compensation in addition to fifteen day’s pay.

Article 177:

The rights stipulated in Article 173, `74, `75, `76 shall be considered the minimum rights granted to the crew which shall not be violated by provisions of the maritime employment contract.

Article 178:

A member of the crew shall obey the orders of his superiors as regards his service to the ship.  He shall not leave the ship without permission from his superior officer and in case of danger he shall work for the salvage of the ship, the people on board, and the cargo.  In such circumstances, the crew member shall be rewarded for his extra work.  The reward shall not be less than the pay due for the number of hours which such work lasts.

Article 179:

The captain and crew members shall not ship any cargo for their own benefit on the ship without permission from the carrier.  A violation of this rule shall result in payment of compensation and freight costs equivalent to the highest freight cost charged by the ship.

Article 180:

  1. The carrier shall pay the wages due to crew members at the time and place determined by the contract, or according to maritime conventions if the date and place for such payment have not been entered in the contract.
  2. Payment due to crew members such as wages shall be paid in the currency of the state, but payment in foreign currencies can be made when the ship is on the high seas provided that the crew members accept this arrangement in writing.


Article 181:

The wages of a crew member shall be fixed in the contract and there shall be added an increment of 40% to the agreed wages while travelling and 20% during the presence of the ship at a foreign port.  The crewman may not collect these two increments at the same time.

Article 182:

If the pay agreed is on a per-voyage basis, it shall not be reduced if the voyage is completed in a shorter period due to action taken by the carrier or the captain.   But if the voyage lasts for a longer period, the pay shall be increased according to the extended time of the voyage.  This last provision shall not apply to pay due to the captain if the voyage is delayed through his fault.

Article 183:

  1. If a crew member is employed for a one-way voyage, he shall be entitled to his full pay if he dies after the voyage has commenced.
  2. If a crew member is employed for a return voyage, he shall be entitled to half his pay if he dies during the voyage to the port of destination and shall be entitled to his full pay if he dies during the ship’s return voyage.


Article 184:

  1. A crew member shall be entitled to a loan of one-fourth of his basic pay.  This loan shall be entered in the ship’s daily log book or the crew book and the concerned member of the crew shall place his signature as acknowledgment of his receipt of the loan.
  2. It shall be possible for the wife of a crew member, his children or other dependent relatives to collect said loan provided that they hold legal authorization to this effect from the crew member.  Said loan shall not be recovered when the employment contract is terminated on condition that such termination is not made by the crew member.


Article 185:

No crew member may surrender his rights to his due pay and no employer may withhold such pay.

Article 186:

The carrier shall provide crew members with food and accommodation on the ship free of charge.  This call shall be regulated by ministerial decision. 

Article 187:

  1. The Carrier shall provide medical treatment for a crew member when the latter becomes ill or is injured while performing his service on the ship.  Said treatment shall be free of charge.
  2. When the illness or injury of the crew member is a result of his disobeying the code of conduct, as in the case of drunkenness, the carrier shall provide the medical treatment but he may deduct the costs from the crew members pay.
  3. The carrier’s liability as regards illness or injury suffered by a crew member shall end if the illness or injury proves to be incurable.


Article 188:

  1. A crew member who suffers an injury or illness while performing his duties on the ship shall be entitled to his full pay during the ship’s voyage.  At the end of the voyage, the crew member’s pay shall be subject to the provisions of the labor law.
  2. The crew member shall not be entitled to his pay if his illness or injury is due to disobedience, drunkenness, or other misconduct.


Article 189:

  1. If a crew member dies in the performance of his duties, the carrier shall pay for the costs of his burial.
  2. The carrier shall place all pay due to the deceased in the concerned marine department.


Article 190:

  1. The carrier shall be responsible for returning a crew member to the country if the latter commits an act which necessitates his leaving the ship, unless the crew member is ordered to disembark by the foreign authorities where the ship is at their port or unless the carrier and the crew member agree to the contrary.
  2. If the crew member was appointed at one of the country’s ports, he shall be returned to that port unless it is agreed in the contract to the contrary.  But if he was appointed at a foreign port, the crew member shall have the choice of being returned either to the port where he was appointed or to any port in the country.
  3. An expatriate crew member shall be returned to the port where he was appointed unless the contract provides to the contrary.
  4. The responsibility of returning the crew member to his port includes provision of his transportation, accommodation and food costs during the period of his return.


Article 191:

The carrier shall not be obliged to return a crew member to his point of origin in the following cases:

a.)  If the crew member fails to claim this right within one week of the expiry of the contract.

b.)  If the crew member renews his contract with the same ship proprietor or if he enters into another contract with another ship owner before his present contract expires or within a week of the expiry date of his present contract.

Article 192:

The carrier shall be exempted from the social insurance costs payable to the concerned social insurance authorities if he obtains a permit from the minister which allows him to obtain the same insurance benefits for the crew with some other recognized insurance firm in the country.

Article 193:

If a contract is made for a limited period of time and if that period ends during the ship’s voyage, the contract shall be extended by force of law until the ship reaches the first port in the country.  If it passes the port before entering any port in the country, the port to which the crewman is to be returned in accordance with Article 190, the contract shall be extended until the ship enters this port.

Article 194:

Should a crew member die in the course of defending the ship, its cargo or its passengers, his heirs shall be entitled to a sum equivalent to three months pay, but if his pay was fixed on the basis of a voyage, his heirs shall be entitled to the full pay for the journey in addition to other compensation or remuneration stipulated by this law and the law governing labor relations and social insurance.

Article 195:

Should a crew member be dismissed from his work during the voyage, the captain may not force him to disembark at a foreign port without the permission of the state’s Consul or the concerned local authority when the state is not represented by a Consul at the port.  The dismissal, its date and causes shall be entered in the crew’s book or else it shall be considered illegal. 

Article 196:

Should an unavoidable circumstance prevent the ship from beginning or continuing its voyage, the crew member employed on the basis of the voyage shall be paid for the days he actually spent in the ship’s service.  In such case, the crew member shall not claim compensation or remuneration.  However, the crewman shall share in whatever sums accrue to the captain or carrier by way of insurance benefits in proportion to the amount of his wages, which remain due to him.

Article 197:

  1. Should the ship sink, be lost, be confiscated or become unseaworthy, the concerned judicial authority may make a ruling exempting the carrier from paying part or all of the crew’s pay if it is proved that the incurred loss was due to the actions or negligence of the crew.
  2. The carrier in such circumstance may terminate the maritime employment contract without prior notice.
  3. The crew members shall not be entitled to claim compensation or remuneration unless the carrier or the ship proprietor is compensated for the damage sustained by the ship.


Article 198:

All claims arising from maritime employment contracts shall become null and void after the lapse of one year from the expiry date of the contract if denied or delayed without legal justification.

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance