Claim
A commercial action was filed before Fujairah Federal First Instance Court by the owner of the vessel ("Party A") against the lessee/charterer of the vessel ("Party B"). Party A requested the Court to:

  • Ratify a foreign arbitral award issued on 26 June 2006 in which Party B was ordered to pay Party A the amount of US $ 235,080.43 plus 2% interest effective from 30 June 2006 until full payment, in addition to costs of the arbitration in the amount of AED 3,690.
  • Ratify the foreign arbitral award specifying the total cost of the arbitration that amounted to £ 9379.50 along with 8% interest per annum or in parallel rate to be effective from the date of the issuance of the arbitral award on 26 June 2007 until full payment in addition to £ 310 representing the cost of the arbitration decision.

In terms of the particulars of the arbitration, the seat of the arbitration was London, the rules applicable to the arbitration were those of the Maritime Arbitration Association and the law applicable to the merits of the dispute, to be determined by a Sole Arbitrator, was that of England and Wales.

Facts
A Charter Agreement was entered into between Party A and Party B on 6 February 2006 in the Emirate of Fujairah. Under the terms of the Charter Agreement Party B chartered a vessel from Party A for the purpose of shipping specific goods as outlined in the Charter Agreement. After the receipt of the vessel Party B failed to pay the demurrage as stipulated in the Charter Agreement. Party A submitted that despite attempts it had failed to amicably settle amicably the dispute over the outstanding demurrage with Party B.

Party A therefore referred the matter to arbitration in accordance with Article 20 of the Charter Agreement, and sought payment from Party B of the amount of US $ 235,735.76 plus interest and costs.

As stated above, the Arbitrator issued a final award in favour of Party A. In light of the fact both England and the UAE are signatories to the New York Convention (1958) on the Recognition and Enforcement of Foreign Arbitration Awards Party A filed a claim against Party B in the Fujairah Federal Court of First Instance requesting ratification of the award in order to allow its execution in the UAE.

Court of First Instance
The Fujairah Federal Court of First Instance ruled in favor of Party A. The Court held that it was not eligible to review the merits of the case. The Court referred to Article 212 (4) of the UAE Civil Procedure Law, the effect of which is that if the seat of the arbitration is outside the UAE, the rules set out for the enforcement of foreign arbitral awards should be applied. The Court also referred to Article 215 (1) of the CPL, which provides that the arbitral award shall be enforced only after its ratification by the Court where it has been deposited, upon that Court's verification that there is no impediment preventing its enforcement. It was also held that conventions and international treaties ratified by the UAE and other foreign countries regarding the execution of foreign arbitral awards shall be considered as local legislation and that therefore, these conventions should prevail.

An order for execution was issued with respect to Party A's award.

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