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• Would the UAE recognize
that the shipper, the carrier and the consignee are contracting
parties to the Bill of Lading?
• Would
the UAE Courts uphold a foreign jurisdiction clause or foreign
arbitration
clause
on the Bill of Lading?
•
Is
there any liability on the carrier to correctly stow the cargo
and put the vessel
in
seaworthy condition?
•
When
is a carrier liable for loss or damage to a consignee/endorsee?
•
Would
the UAE Courts uphold an endorsement of the Bill of Lading
with the words 'Shipper's Load,
Stow
and Count' or 'Said to Contain' when a claim for damages is
brought against the carrier?
•
Would
the UAE Courts recognize the damages caused by "inherent
vice" or
"latent
defect" in the cargo?
•
Would
the carrier be liable for damages caused to cargo by an "act
of god" or "force majeure"?
•
Will
the UAE Courts review whether the consignee has 'title to
sue"?
•
When
would a maritime claim for damaged cargo be time barred?
•
What
if details and information regarding the cargo provided by
the shipper are not correct?
•
Who
would be entitled to take delivery of the goods?
•
What
if there has been a difference in the terms and conditions
of the charter party
agreement
and the Bill of Lading?
•
What
if there has been more than one person holding an original
Bill of Lading and each has
submitted
a request to take delivery of the cargo?
•
What
if the consignee fails to come forward to take delivery of
the cargo within reasonable time?
•
What
if dangerous cargo was shipped on board of a vessel?
•
Can
the carrier carry the cargo on the deck of a vessel?
•
Is
there any limitation of liability on the carrier's part for
cargo claims?
•
Would
an agreement between the carrier and the shipper to exempt
the carrier from
any
liability be valid in court?
•
Should
a consignee give notice of damage or short landing of the
cargo after delivery?
•
Would
the carrier be liable for delay in delivery of the cargo?
•
If
the cargo was shipped by more than one carrier consecutively,
who will be liable for what?
•
Would
it be possible for the consignee to bring an action against
the owners and the charterers
of
the vessel jointly in one set of proceedings?
•
Is
it possible for the consignee or the shipper to sue the shipping
agent jointly with the carrier?
•
Is
there a separate admiralty court in the UAE to hear maritime
cases?
•
Would
the local court detain the Master or impound his passport
if there is a claim
against
the owner of the vessel?
•
Would
a claimant against the owners or the charterers of a vessel
be able to serve
the
agent of the vessel and would such a service be considered
as good service?
•
Would
the court rely on an expert opinion in court cases?
Would
the UAE recognize that the shipper, the carrier and the consignee
are contracting parties to the Bill of Lading?
UAE
law recognizes the fact that the bill of lading is evidence
of a contract of carriage and the parties to the same are
the shipper, the carrier and the consignee, all of whom are
bound by the terms of the Bill of Lading.
However,
UAE law states that while it may be possible to argue contrary
to the contents of the Bill of Lading between the shipper
and the carrier, the carrier may not argue contrary to the
terms and conditions of the Bill of Lading vis-a-vis the consignee
or endorsee who may be an innocent third party and was not
a party to the negotiation of the original contract of carriage.
The
UAE Courts are, for the same reason, reluctant to hold consignees
bound by terms on the reverse of a bill of lading, arguing
that the consignee as a third party to the original contract
had no opportunity to agree with or disagree with the terms
of the same.
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Would
the UAE Courts uphold a foreign jurisdiction clause or foreign
arbitration clause on the Bill of Lading?
The
UAE Courts will not uphold a foreign jurisdiction clause or
a foreign arbitration clause on the Bill of Lading as this
is contained on the reverse of the bill. The court however
may uphold an arbitration clause, if it was signed by both
parties and agreed to in a separate document (for example,
a charter party agreement), and not printed on the reverse
of the Bill of Lading.
The
UAE Courts will always set aside such jurisdiction or arbitration
clause on the reverse of the Bill of Lading between carrier
and consignee/endorsee and apply the UAE rules of jurisdiction
(as set out in UAE Federal Law No. 11 of 1992 ("the Civil
Procedure Code")) to the dispute. However, an arbitration
clause agreed in the charter party agreement will be upheld
provided that a charter party agreement incorporating such
clause is signed by both parties.
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Is
there any liability on the carrier to correctly stow the cargo
and put the vessel in seaworthy condition?
According to Article 272 of the Maritime Code:
1. The carrier must before setting sail and
upon the commencement of a voyage use the necessary care to
put the vessel in a seaworthy condition and to fit it out,
man it and provision it properly. He must prepare the holds
and cold rooms and other parts of the vessel to receive, carry
and preserve the goods.
2. The carrier must also use the necessary care in loading,
stowing, stacking, arranging, carrying, protecting, discharging
and delivering the goods.
According
to the Maritime Code, the carrier has a responsibility to
put the vessel in a seaworthy condition suitable for the carriage
of the goods and also has the responsibility, unless agreed
otherwise, to stow and store the cargo within the hold of
the vessel and to carry the same in good safe condition from
the port of loading to the port of discharge.
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When
is a carrier liable for loss or damage to a consignee/endorsee?
According
to Article 275 of the Maritime Code, the carrier will be liable
for loss or damage in the following circumstances:
Article
275
1. The carrier shall be responsible for loss or damage sustained
by the goods during the period from the time he takes delivery
of the goods at the port of loading to the time he delivers
the same to the person having the right to them at the port
of discharge unless it is proved that the said damage or destruction
arose out of one of the following causes:
a. Unseaworthiness of the ship, but on condition that the
carrier proves that
he discharged the obligations set
out in Article 272;
b. Errors of navigation or in the management of the vessel
on the part of the
captain, crew, pilots or other maritime
workers;
c. Fire, unless the same occurred through the act or default
of the carrier;
d. Perils of the sea or other navigable waters, or dangers
or accidents thereof;
e. Act of God;
f. Perils of war;
g. Acts of public enemies;
h. Any detention or constraint by a power, state or people
or judicial arrest;
i. Quarantine restrictions;
j. Any strikes or layoffs or any other obstacle such as to
prevent continuance
of the work in whole or in part;
k. Civil unrest and commotion;
l. Any act or omission on the part of the shipper or owner
of the goods
or his agent or representative;
m. Shortfall in bulk or weight or any other shortfall arising
out of a latent defect or from the
particular
nature of the goods or any defect
inherent therein;
n. Insufficiency of packaging;
o. Insufficiency or imperfection of distinguishing marks for
the goods;
p. Rescue or attempted rescue of persons or property at sea;
q. Latent defects not discoverable by ordinary examination;
r. Any deviation from course in the course of rescuing or
attempting to rescue
persons or property at sea or any other
deviation for reasonable cause;
s. Any other cause which does not arise out of the default
of the carrier or those
working under him or his representative.
The burden of proof shall be upon the
person alleging such cause to show that
no default of such persons was
instrumental in causing the loss or damage.
2.
It shall be permissible for the shipper in the circumstances
set out above to prove that the loss or damage arose out of
the default of the carrier or the default of those working
under him in a manner unconnected with the navigation or management
of the vessel.
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Would
the UAE Courts uphold an endorsement of the Bill of Lading
with the words 'Shipper's Load, Stow and Count' or 'Said to
Contain' when a claim for damages is brought against the carrier?
UAE
law generally exempts the carrier from any liability resulting
from the fault or omission of the shipper or any third party
(see Article 275 (1) (l) of the Maritime Code). However, the
courts in the UAE normally do not uphold the words "Shipper's
Load, Stow and Count" or "Said to Contain"
printed on the front of the bill of lading and will hold the
carrier liable for the damage to the contents of a container
or for loss following short landing of the contents of a container
which was delivered sealed to the carrier. This is the case
even if the seal was intact on delivery to the consignee,
and is based on the argument that a carrier, in issuing a
clean bill of lading, guarantees the contents of the container
as described in that bill of lading. (See Dubai Court of Cassation
Judgment No. 43/89 dated 3/2/1990).
However,
in cases where damage was caused because of bad stowage and
packaging, and the stowage and packaging can be shown to have
been carried out by the shipper, some courts in the UAE may
find the carrier not liable for the damage caused by poor
stowage or packaging (see Article 275 (1) (n)).
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Would
the UAE Courts recognize the damages caused by "inherent
vice" or "latent defect" in the cargo?
UAE
Courts recognize that a carrier is not liable for any "inherent
vice" or "latent defect" in the goods provided
that proper evidence is provided to the court to prove that
the damage was caused by a "latent defect" or "inherent
vice" (see Article 275 (q)). Such damage is understood
as an exemption to the generally assumed principle of carrier's
liability as set in Article 275 (1) of the Maritime Code.
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Would
the carrier be liable for damages caused to cargo by an "act
of god" or "force majeure"?
The carrier will not be liable for damages to the cargo caused
by an "act of god" or "force majeure"
pursuant to Articles 275 (1) (d) and (e) of the Maritime Code
unless the event could have been expected or it could have
been avoided or forecast. In such circumstances, the carrier
will be liable if he could have forecast the event and taken
precautions or could have avoided the same as he has a duty
of care to cargo interests in such circumstances. If the carrier
wishes to prove an "act of god" in such circumstances,
the same is proved by the carrier obtaining evidence of the
weather, both in its severity and in its expectation at the
place where the vessel sailed at that time (as evidenced by
the submission of the vessel's log), and by obtaining English
and Dubai Meteorological Office reports on the same as evidence.
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Will
the UAE Courts review whether the consignee has 'title to
sue"?
The
UAE Courts acknowledge the fact that the bill of lading is
either to the bearer or to the order of the shipper, or in
the name of the consignee. In such cases (other than the last),
proper endorsement on the reverse of the bill of lading has
to be made to show that the plaintiff in any court proceedings
has "title to sue" or proper endorsement of the
bill of lading in his favour.
"Title
to sue" may be proven by an endorsement on the bill of
lading or by any other document to prove that the plaintiff
has proper "title to sue" in the proceedings, such
as a letter from a bank saying that the Bill of Lading was
actually endorsed by such bank (provided of course that the
bank was entitled to made such endorsement).
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When
would a maritime claim for damaged cargo be time barred?
A
maritime claim pursuant to a contract of carriage will be
time barred after one year from the date on which the goods
were delivered or ought to have been delivered. The time of
delivery is when the goods pass through the port gates. Time
stops running on the date an action is officially filed before
a UAE court. Such specific date is mentioned on the court
summons.
However,
a recourse claim against a third party by a person against
whom a claim has been made will be time barred after the expiry
of 90 days from the date the claim was made against him or
from the date on which he paid. This 90 day period has in
the past also been deemed to include the right of an insurer
pursuant to subrogation.
There are also time bar provisions for other shipping activities
within the Maritime Code, for example, a one year time-bar
in charterparty claims (Article 224), two years in pilotage
and towage claims (Articles 314 and 317), two years in marine
collision claims (Article 326) and two years for marine insurance
claims (Article 399).
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What
if details and information regarding the cargo provided by
the shipper are not correct?
The
carrier, when receiving the cargo, must put any "reservation"
he may have on the front of the Bill of Lading before accepting
delivery of the goods at port of loading. This is called "clausing"
the Bill of Lading and any "clause" should be supported
by a seperate written document from the shipper agreeing to
the specific wording of "the clause". The carrier
may also have a recourse action against the shipper for any
false information provided. However, the carrier may not argue
vis-a-vis a third party consignee or endorsee that some of
the information provided was incorrect or incomplete if the
bill of lading was issued clean and incorporated such information.
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Who
would be entitled to take delivery of the goods?
A
consignee or endorsee who holds the original Bill of Lading
will be entitled to take delivery of the cargo at the port
of discharge. If the cargo is delivered to a party who does
not present an original bill of lading, the carrier may be
liable to the true owner of the cargo in contract and third
parties in tort for the value of the cargo and/or damages.
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What
if there has been a difference in the terms and conditions
of the charter party agreement and the Bill of Lading?
In
case of differences between the charter party agreement and
the Bill of Lading, the charter party agreement will supersede
the relationship between the charterer and the owner. However,
with regard to the relationship between the charterer and
the consignee/endorsee, the terms and conditions of the Bill
of Lading will supersede, unless a specific reference in the
Bill of Lading was made to incorporate the terms of the charter
party agreement.
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What
if there has been more than one person holding an original
Bill of Lading and each has submitted a request to take delivery
of the cargo?
Usually there should be one original Bill of Lading in
the hands of the consignee/endorsee as ultimate receiver.
However, if there has been more than one Bill of Lading issued,
preference will be given to the consignee who holds an original
Bill of Lading with a prior date of endorsement.
In
cases where all endorsement dates are the same, the Master
of the vessel may place the cargo into custody of a third
party or into the custody of the UAE court until the matter
is determined by the court. This would be a recommended course
of action in circumstances where there are conflicting claimants
holding original bills of lading, or if the Master is put
on notice of any possible fraud.
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What
if the consignee fails to come forward to take delivery of
the cargo within reasonable time?
If the consignee fails to come forward despite a notice
given by the carrier to take delivery of the cargo, the carrier
may put the cargo in the custody of a third party or into
the custody of the local court after obtaining a court order
for the same. The carrier may also apply to the court to obtain
an order to sell the cargo for the payment of any costs or
freight payable in connection therewith.
The
carrier also has the option of putting the consignee/endorsee
on formal notice of the arrival of the cargo and discharging
the same to the port authority's custody until such cargo
is auctioned. This is commonly done as there is no cost to
this for the carrier or his local agent. Sale of the contents
of the container will occur six months from the date of arrival
of the cargo at the port. The carrier may however be liable
for port charges towards the port authority if the value of
the port charges exceeds the amount recovered in the port
auction of the goods (this is not usually the case).
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What
if dangerous cargo was shipped on board of a vessel?
If
dangerous cargo is shipped on board of a vessel, the carrier
may discharge all or part of the dangerous cargo or remove
the danger at the shipper's cost, or may request the shipper
to compensate him for any damages that the cargo may have
caused if the carrier was not aware of the fact that the cargo
was of a dangerous nature, or if the shipper failed to declare
the dangerous nature of the cargo.
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Can
the carrier carry the cargo on the deck of a vessel?
The
carrier may not carry the cargo on deck unless specifically
agreed in writing by the shipper or unless the voyage was
for coastal carriage only.
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Is
there any limitation of liability on the carrier's part for
cargo claims?
The
carrier's limitation of liability is specified under Article
276 of the UAE Maritime Code which states:
Article 276
1. The liability of the carrier in all circumstances
for loss or damage suffered by the goods shall be limited
to a sum not exceeding ten thousand Dirhams for each package
or unit taken as a basis in computing the freight, or a sum
not exceeding thirty Dirhams per kilogram per gross weight
of the goods, whichever is the higher limit .
2. If packages or units are grouped in cases, boxes or other
containers and the bill of lading states the number of packages
or units contained in each container, then each one shall
be deemed to be a package or unit in connection with the fixing
of the upper limit of liability and if the container is not
owned or provided by the carrier and it is lost or destroyed
it shall of itself be deemed to be an independent package
or unit.
3. It shall not be permissible for the carrier to limit his
liability as against the shipper if the shipper has provided
particulars, before the loading takes place, of the nature
and value of the goods and the particular importance attaching
to the preservation thereof, and such particulars are set
out on the bill of lading. The said particulars shall be deemed
to be proof of the accuracy of the value set out by the shipper
of the goods and it shall be permissible for the carrier to
prove the contrary.
4. Special agreement may be reached between the shipper and
the carrier or his representative to specify an upper limit
of liability of the carrier different from the limit set out
in this Article but provided that it may not be less than
it.
5. In no cases shall the carrier be responsible for loss or
damage sustained by the goods if the shipper has deliberately
stated false particulars on the bill of lading relating to
the nature or value of the goods.
In most circumstances, the carrier may limit his liability
to the higher of Dhs 10,000 per package or Dhs 30 per kilogram
of gross weight of the goods, and court judgements have upheld
the carrier's right to limitation of liability under Article
276.
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Would
an agreement between the carrier and the shipper to exempt
the carrier from any liability be valid in court?
According
to UAE law, any agreement to exempt the carrier from liability
or negligence for damage to the cargo or to reduce any liability
for the same will be null and void against the consignee/endorsee
as holder of the original bill of lading.
The
carrier however may agree with the shipper to increase his
liability provided such a condition is specified in the Bill
of Lading provided to the shipper.
However,
there is an exception to the above (Article 280 of the Maritime
Code), where the shipment is in connection with coastal shipment
or the special circumstances of the carriage of a particular
type of cargo justifies such an exemption. For such an exemption
to be valid, the following conditions must be satisfied:
a. It must not be contrary to a public order
or policy.
b. It must not be related to the care which must be exercised
by the employees or agents of the carrier or their diligence
in connection with the loading, storing, stocking, carrying,
preservation and care of the goods being carried at sea or
in the discharge thereof (see also Article 272 and Article
275 of the Maritime Code).
c. A Bill of Lading should not be issued.
d. The agreement should be written on a non-negotiable receipt
and particulars thereof should be endorsed thereon.
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Should
a consignee give notice of damage or short landing of the
cargo after delivery?
Normally,
if no notice is given to the carrier of the damage to the
goods or the short landing of the cargo after taking delivery
of the cargo, the cargo will be assumed to have been delivered
in the same condition as specified in the Bill of Lading (see
Article 281 of the Maritime Code). However, the party in question
may prove otherwise by evidence according to the Federal Law
No. 10 of 1992, "Evidences in Civil and Business Transactions
Act ("the Evidence Law").
However,
notice of damage or loss should be given within three days
from the date on which the cargo was received. If a joint
survey was carried out, no further notice is required.
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Would
the carrier be liable for delay in delivery of the cargo?
Article
285
1. The carrier shall be responsible
for delay in delivering the goods unless it is proved that
the delay arises out of one of the causes set out in Article
275.
2. The carrier shall be deemed to have made delay in delivering
the goods if he does not deliver the goods at the time agreed,
and in the absence of such an agreement if he does not deliver
them at the time at which an ordinary carrier would deliver
them in similar circumstances.
The
carrier will be liable for delay in discharging the cargo
unless he provides evidence that the delay was caused by one
of the provisions of Article 275 of the Maritime Code referred
to above. The consignee/endorsee will, of course, have to
prove his actual loss by way of
evidence.
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If
the cargo was shipped by more than one carrier consecutively,
who will be liable for what?
The
first carrier who issued the "through" Bill of Lading
will be responsible for the cargo until the cargo is discharged
and delivered in good condition to the consignee.
However,
other consecutive carriers may also be liable to the consignee/endorsee
in negligence (tort), but not in contract under the Bill of
Lading, if their negligence in handling the cargo was proven
to have caused damage to the goods. Such an action in tort
carries a heavy burden of proof on the party alleging negligence
in UAE Law. Any claimant needs to prove: (a) the loss or damage
was incurred on the tortfeasor's leg of the voyage; and (b)
the cause of the loss or damage was directly caused by the
negligence of the tortfeasor.
A
"through" Bill of Lading carrier may claim against
the subsequent carrier in contract by way of recourse if the
"through" Bill of Lading carrier was found liable
for loss or damage on the leg of the voyage under the responsibility
of the second carrier. This is, of course, provided the contractual
link between the two carriers is proven.
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Would
it be possible for the consignee to bring an action against
the owners and the charterers of the vessel jointly in one
set of proceedings?
It
is common in the UAE for a consignee to bring an action against
both owners and charterers. It is also possible to bring proceedings
against owners, charterers and NVOC issuers of the Bill of
Lading and / or "slot" charterers. However, it is
established in the UAE that the party who will be responsible
to the claimant in the proceedings is normally the party who
contracted with the shipper to carry the goods, whether it
was the owners, the charterers or another party who issued
the Bill of Lading. Normally, the court takes into consideration
the identity of the party who has issued the Bill of Lading
and the identity of the carrier shown in the bottom right
segment of the Bill of Lading. The court may also look at
the terms on the reverse of the Bill of Lading to identify
the carrier, but will not take any "identity of the carrier"
clause on the reverse into account if the same is against
the interests of the consignee/endorsee. Therefore, on a number
of occasions, the court may discharge the action filed against
the owners or charterers or both, as the case may be, depending
who actually issued the Bill of Lading as carrier. Also, the
court may find parties jointly and severally liable in circumstances
where it is not possible to tell who is the actual carrier
from the front of the Bill of Lading.
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Is
it possible for the consignee or the shipper to sue the shipping
agent jointly with the carrier?
It is established by various court judgements in the UAE
that the shipping agent is not liable for any claim under
the Bill of Lading as the agent is not a party to the contract
of carriage. The only time when the court will find the agent
liable is if the agent can be proved to have committed a personal
fault or negligence causing damage to the goods. The agent's
liability in such case will be negligence in its personal
capacity, and not as agent.
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Is
there a separate admiralty court in the UAE to hear maritime
cases?
Maritime
cases are normally heard before the civil courts in the UAE.
There are no specialized admiralty courts in the UAE to hear
shipping cases, although some of the individual judges do
have significant shipping experience.
Cases
are conducted in the Arabic language and arguments are carried
out by exchange of written pleadings and submission of documents
by either party before the case is reserved for judgment.
However, "ex parte" applications and objection hearings
can sometimes require verbal argument in court or at the judge's
chambers.
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Would
the local court detain the Master or impound his passport
if there is a claim against the owner of the vessel?
The
UAE court will not usually detain the Master or restrict him
from leaving the country nor will the court impound his passport
even if there is an arrest on the vessel pursuant to a cargo
claim. The Master will only be detained or his passport impounded
if there has been an allegation as to a crime in accordance
with the UAE Federal Law No. 3 of 1987 ("the Penal Code")
committed on board of the vessel or with regard to documents,
such as commercial fraud, damage caused by a collision involving
another vessel or to another party's property, or in relation
to the death or injury of a crew member on board the vessel.
If
allegations are made against the Master of the vessel, the
Master will be asked not to leave the UAE unless proper security
is provided until the criminal case is determined by a final
judgment. This will not be applicable to civil cases.
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Would
a claimant against the owners or the charterers of a vessel
be able to serve the agent of the vessel and would such a
service be considered as good service?
A
claimant may serve a court summons on the owner of a vessel
if they have a place of domicile in the UAE or a place of
business via their shipping agent. Service on the shipping
agent acting on behalf of the owners or the charterers will
be considered good service for the purpose of UAE proceedings.
If,
however, the owner or charterers have no representative in
the UAE, service must be effected on their address in their
country of domicile through diplomatic channels. Service through
diplomatic channels is extremely slow. In cases where the
plaintiff has no knowledge of the address of the defendant
or its whereabouts, he may request the court to give special
permission to effect service by way of publication in a local
newspaper which may or may not be accepted by the judge concerned.
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Would
the court rely on an expert opinion in court cases?
The
court often considers the expert opinions obtained by each
party. Even if the survey or the expert's opinion was not
carried out jointly or by consent, the court will assess the
respective expert's opinions and may rely on such opinions
in giving judgment, if the court thinks that the opinion is
reasonable and justified. Surveyors should be prepared to
attend court as witnesses to support their survey reports
if required, although in practice, surveyors are rarely called
as witnesses. On many occasions, the court also refers cases
to independent "court experts" registered with the
court to evaluate the two opinions given by the parties experts
or to assess the matter and provide the court with a technical
summary of the case.
Court
experts are only instructed by the court to deal with technical
issues and facts and have no right to give an opinion on the
legal issues involved in the case.
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