Yudu - Lawyer Monthly October 2013

Legal Focus

OCTOBER 2013

Maritime Law

The maritime industry is vast and has over recent years been subject to much tumult in terms of high costs, piracy, bankruptcy and stricter regulations. To find out how the sector is faring, Lawyer Monthly speaks to Jasamin Fichte, Managing Partner of Fichte & Co Legal Consultancy. Please introduce yourself and your firm.

Fichte & Co is the only international law firm headquartered in Dubai. Our dedicated commercial practice has a wealth of experience in contractual and advisory work across a broad spectrum of industry sectors. Our team consists of 15 dual qualified lawyers. Our firm is by now the corporate, litigation and maritime law firm of choice in the Middle East.

We provide expertise in the following areas of law: 1. Maritime 2. Corporate & Commercial; and 3. Litigation & Arbitration;

What are the main difficulties facing the maritime industry in your jurisdiction currently?

Our shipping department is the largest within the region. Fichte & Co works extensively with financial institutions and individuals to support its clients. We are actively involved in the ship finance market and our reputation is building up stronger with the many transactions completed acting on behalf of owners who are active in the shipping market.

In the past years, the maritime industry faced operational challenges

including piracy,

overcapacity in many market segments, high operating costs and a tightening regulatory environment. As an effect of the global crises, the ship finance in particular has suffered. We have observed that banks are still very cautious. Shipping loans are difficult to obtain, as many companies exhausted their cash resources trying to deal with the 2009 slowdown. Also large companies reported losses in 2011, and loans to major concerns are being restructured. The difficult market conditions that prevailed during the fourth quarter of 2011 imposed critical challenges on the lending market.

companies including omega navigation, Marco Polo Seatrade and several other small operators have gone into bankruptcy protection in recent years. do you think the shipping industry can recover and what do you think the future holds?

The UAE offers many advantages as an international port of call; it’s tax free, has excellent communication facilities and is ideally located

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geographically close to existing manning centres. In addition, Dubai is the home of the world’s second largest container terminal operator. It also has excellent Ship repair facilities with one of the world’s largest best ship repair yard (Dubai Dry docks). Over the next decade nearly 50% of world oil will move from the Middle East, new fields that are coming on line in the Middle East are mainly offshore and base on this alone we expect a major increase in shipping activity in almost all the sections. A similar situation exists with natural gas - 67% of the world’s proven gas reserves are located in Middle East. Some of world’s largest gas reserves are found in Qatar and the UAE. With the development of LNG needs worldwide, most of the requirements will be fulfilled from the Middle East. Hence the proximity to the major energy markets is the major force in UAE being an area of choice for ship management and operations.

Even though the world economy is just about coming back on track the Middle East has tremendous potential and is poised for growth. Even though the growth could be slow due to world economics, the shipping industry locally will continue to prosper.

are there any future legislative changes you would like to see?

There has been tremendous development in the maritime sector in the traditional maritime countries and especially the common wealth countries which have had a more standardized change within their laws and adopting of regulations, the changes in the UAE and also other GCC countries have been dominant with the nations recognizing the potential of shipping and the importance of regulations and rules that dominate world trade and shipping in general.

Particularly in the UAE, the maritime sector has seen a marked development and the contributory factors towards this could be the effective presence of various regulatory and competent bodies for the administration of maritime affairs within the regimes. For the legislation to be effective, it needs to be in a position to address the local conditions as well as to meet the international standards. The institutional framework of the maritime administration is to provide the mandate

to effectively oversee all the operators of the maritime sector in consideration of the International Maritime Organization (IMO) guidelines and mandatory instruments.

With regards to changes in the legislation and in particular speaking of UAE, shipping and maritime activities in general are international issues, and in order to fulfill the responsibilities as a flag state and a port state effectively and in an efficient manner, the Government is considering a comprehensive legislation for the control and regulation of shipping with respect to the registration of ships, the employment and certification of seafarers and the safety of shipping. Also, the legislation would further provide for the establishment of a competent Maritime Administration prescribing its objects and functions. The government should also consider accession to and implementation of relevant International Instruments for the improvement of maritime safety and prevention of pollution.

There has been significant interest by the local authorities to implement and provide a suitable legislation and such change is imminent in the recent future in line with UAE’s vision to be recognized as a significant Maritime hub. LM

contact:

Jasamin Fichte Managing Partner Fichte & co Legal consultancy

tel: +971 4 43 57 577 Fax: +971 4 43 57 578 Email: Jasamin.fichte@fichtelegal.com Website: www.fichtelegal.com