United Arab Emirates: Involving Interim Measures Of Relief

Judgment Summary

The Court which has jurisdiction to hear the application for precautionary attachment of a vessel to secure the payment of a maritime debt is the court in which jurisdiction the defendant is domiciled, or the asset to be arrested is located.

The facts

Party A submitted an application to the judge of summary matters in the Dubai Courts seeking an order to impose precautionary arrest on a particular vessel at Jebel Ali Port, Dubai.

Party A pleaded that it bought the vessel from Party B under a sale contract dated 24^th November 2006 for the price of $US 2,450,000. Party A claimed that at the time of executing the contract it had paid $US 200,000 with the balance to be paid in 36 monthly installments. The total amount paid was $US 962,896. Party B took possession of the vessel and its cargo while the vessel was berthed in Khalid Port, Sharjah, thereby compromising Party A's rights under the contract. Party A consequently applied for precautionary attachment of the vessel.

However, Party A's application was rejected by the judge of summary matters. Party A appealed this decision. Party A's appeal was rejected on the ground that the Dubai Courts lacked the jurisdiction to hear the application for precautionary arrest because the vessel was not in a Dubai port. Party A then appealed to the Court of Cassation, which accepted the appeal.

The Court of Cassation held that Article 115 of the Commercial Maritime Law, read with Article 38(1) of the Civil Procedures Law, provided that in applications involving an interim measure, the applicant shall have the choice to submit its application to the court in which jurisdiction the defendant is domiciled or to the court in which jurisdiction the measure shall be taken. As such, it is established in the papers, and undisputed by the parties, that the domicile of Party B is in Jumeirah, Dubai (indeed Party B was notified of the statements of grievance, appeal and appeal in cassation via its Dubai address). Therefore, the Dubai Courts enjoyed the requisite jurisdiction to hear the application for the precautionary arrest of the vessel.

Finally, the Court of Cassation held that as the Court of Appeal had erred in its application of the law, the Court of Appeal's decision should be revoked and the case remanded back.

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