Court of Cassation Delimits Ownership Registration Requirement to UAE-Flagged Vessels

In the United Arab Emirates, maritime law holds a unique position given the nation’s significant role in regional and international trade. For every state, ships are not merely assets, but they are considered extensions of the sovereignty of the state whose flag they carry. This legal character makes ownership, flag registration, and jurisdictional clarity critical, especially in cases involving disputes over vessel ownership and the applicable flag state jurisdiction.

Case Overview

In a significant 2024 judgement issued by the UAE Court of Cassation, it introduced a pivotal interpretation of how ship ownership is treated under UAE maritime law, particularly when ownership arises from unregistered agreements.

In this case, a dispute arose between two parties over the ownership of a commercial vessel. The claimant asserted his entitlement to 33% ownership based on an agreement executed in 2019. Although the contract outlined the shared ownership and profits, the agreement was not officially registered with the competent maritime authority in the UAE.

The Court of First Instance rejected the claim, not based on the facts presented by the parties, but on a legal ground that the agreement was not ratified or registered in accordance with maritime law. The Court of Appeal upheld this reasoning, relying on the clear wording of Article 66 of the repealed Federal Maritime Law No. (26) of 1981, which was in force at the time the dispute arose. This principle has since been preserved and expressly reaffirmed under Article 24 of Federal Decree-Law No. (43) of 2023 on the Maritime Law. The relevant provision mandates that any transfer of ownership or the creation of in rem rights, namely rights attaching directly to the vessel itself, such as maritime mortgages or other security interests, must be duly registered and notarized. Failing such registration, the transaction is deemed null and void.

On this basis, the Court concluded that the contract entered into by the parties had not been officially registered with the competent authorities and, accordingly, declared it null and void, resulting in the dismissal of the claims.

Main Argument Presented

This legal requirement serves a crucial public interest. However, it is important to emphasise that the relevant provisions apply exclusively to vessels registered under the UAE flag. The legislature deliberately confined the scope of the law to UAE-flagged vessels, recognising that such vessels are regarded as an extension of the State’s sovereignty and territorial jurisdiction. A ship flying the national flag is not merely subject to administrative regulation; it is treated, in legal contemplation, as a floating part of the State itself. Accordingly, the requirement for registration and formalities is intrinsically linked to the protection of national interests. This distinction becomes particularly significant in times of war, armed conflict, or national emergency, where questions of jurisdiction, control, and the protection of national assets assume heightened importance. Conversely, where a vessel is registered under and flying a foreign flag, it falls outside the scope of these specific provisions, which were expressly designed to regulate UAE-flagged ships.

Decision of the Court of Cassation

While the first instance and appeal courts strictly adhered to the registration requirement, the Court of Cassation introduced a crucial distinction. The Court ruled in our favour, accepting our argument that the registration obligation applies exclusively to vessels flying the UAE flag.

In this case, the ship in question did not carry the UAE flag. It was registered under the flag of Comoros, a foreign jurisdiction. As such, the Court reasoned that the UAE’s strict registration requirements governing transactions related to vessels, as outlined in the aforementioned UAE legal provisions, do not apply. Instead, the matter reverts to its basic legal principle, namely that contracts are generally consensual in nature, and that the validity and enforceability of such contracts require only mutual consent, without the need for any formalities. As such, the general principles of contract law govern this transaction.

The Court emphasized that for ships flying a foreign flag, ownership can be transferred through a consensual contract, based solely on a valid offer and acceptance, even in the absence of registration or notarization in the UAE.

This marks a judicial narrowing of what had been a broadly worded statutory requirement and clarifies that Article 66 of the repealed maritime law (and its equivalent in the current law Article 24 of Federal Decree Law No. 43 of 2023) applies only to UAE-flagged vessels.

This decision effectively recalibrates how courts will interpret and apply the law going forward, aligning legal formality with the vessel’s flag and jurisdiction. The importance of this decision lies in its judicial specification of legislative scope. While the text of the law required all contracts affecting ship ownership to be registered to be valid, the Court of Cassation rightly acknowledged the jurisdictional limits of UAE law.

By distinguishing between UAE-flagged and foreign-flagged vessels, the Court has established a more precise framework for evaluating ownership disputes, one that balances contractual autonomy with the sovereign regulatory interests of the state.

Conclusion

This judgment may serve as a guiding precedent for future cases involving ship ownership disputes in the UAE. It reinforces the need for legal practitioners and commercial parties to carefully assess the flag and registration status of vessels when structuring agreements.

More broadly, it reflects a legal system that is willing to adapt statutory interpretation to international maritime realities, while maintaining the strategic interest of the state in regulating its own flagged vessels.

We are proud to share that this favourable outcome was secured by our dedicated team at Steering Legal, reflecting our expertise in maritime law and commitment to delivering practical, results-driven solutions. For advice, guidance, or support on similar matters, we welcome you to get in touch with us.

Feel free to get in touch with Mohamed ElHouseny and Tibyan Mohamed