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Siri Hashem - Senior Associate
In this case, the court decided that both the Insurance company and the carrier are jointly liable to indemnify the receivers based on distinct legal bases. The Insurance company was required to pay the damages to the Receiver and, subsequently, filed a recourse case against the carrier, as identified by the court, after obtaining a subrogation of rights from the Receiver. The recourse case was based on both the judgement and the subrogation at the same time.
A cargo of steel plates was shipped on board a chartered under time basis vessel to Jebel Ali port for several receivers. After discharging the cargo at Jebel Ali port, it was delivered to the receivers designated in the bills of lading which were issued by the charterers. One of the receivers (the “Receiver”) found there was a shortage in the quantity of steel plates (the “Cargo”) delivered to him equivalent to a certain amount of money. The Cargo was insured under a marine insurance policy for the voyage from port of loading to the port of discharge stated in the bills of lading the Receiver held.
The Receiver filed a court case before Dubai Court of First Instance (the ”Court of First Instance”) in order to appoint an expert to examine the short landed cargo and the cause and to claim such loss against the sellers, ship-owners, the vessel and the insurers of the Cargo (the “Insurers”). The Court of First Instance appointed an expert who concluded the value of the cargo short landed which had happened due to the wrong delivery by the ship agent appointed by the charterers. The Receiver amended his statement of claim and requested the defendants to pay jointly and severally the value of the short landed Cargo (the “Claimed Amount”).
The Court of First Instance found that:
The Receiver filed an appeal before the Appeal Court of Dubai (the “Appeal Court”) on the basis that the judgment should include the other two defendants to pay the awarded amount jointly with the Insurers as the owners are the carriers under the bill of lading. The Insurers filed another appeal before the Appeal Court on the basis that the claimed damages are not covered by the insurance policy and that the interest should start counting from the date the judgment becomes final. Both appeals were joined in one hearing. The Insurers argued in their appeal that the judgment relied on an expert report which was incorrect in its findings as the cargo was fully discharged at Jebel Ali but the shortage was due to the wrong delivery by the ship agent. The ship-owners argued that they are not the carriers under the bill of lading and that the case is time barred.
The Appeal Court found that according to the customs bill of entry, it is clear that the number of plates discharged at the port were as per the bill of lading and that there was the correct number of plates at the port and there was no short lading in the number of plates. The findings of the expert appointed by the Court of First Instance contradicted the bill of entry as there was no certificate of shortage issued by the customs. Therefore, the court adopted the customs bill of entry as issued by an official body and found that there was no short landing and, accordingly, all the defendants were found not liable. The court of First Instance judgment was cancelled accordingly.
The Receiver filed an appeal case before the Cassation Court of Dubai (the “Cassation Court”) on the following basis:
The Cassation Court accepted the appeal, cancelled the Appeal Court judgment and returned the case to the Appeal Court to reconsider the case and also concluded that:
When the case was returned to the Appeal Court, it considered the same points of the original appeals filed before. The Appeal Court found the following:
The Insurers appealed the decision of the Appeal Court before the Cassation Court on the following basis:
The Cassation Court refused the appeal and confirmed the Appeal Court judgment on the basis of the court appointed expert report.
The Receiver appealed the decision of the Appeal Court on the following basis:
The sellers must be jointly liable with the Insurers for the shortage because they failed to ship the total agreed cargo quantities. The court refused this point on the basis that the shipper, as per all reports issued at the port of loading and by the court appointed expert, shipped the total agreed cargo quantities.
The ship-owners must be jointly liable with the Insurers for the shortage because they are the carriers under the bill of lading which was signed by the agent on behalf of the master. The bill of lading did not state that the vessel was under charter and did not mention the name of the charterer or the owner, also the charterparty was not attached to the bill of lading.
The charterparty was referred to by the court appointed expert but only a photocopy was attached which the Receiver denied.
The Cassation Court found the following:
The case was returned to the Appeal Court to reconsider the parts of the judgment that were cancelled by the Cassation Court. The Appeal Court found that:
The ship-owners filed an appeal before the Cassation Court on the following basis:
The Cassation Court rejected all the arguments and confirmed the Appeal Court’s judgment.
While the Cassation Court was considering the appeal filed by the shipowners, the Insurers filed a case against the shipowners in order to claim the amount paid by the Insurers to the Receiver, pursuant to the foregoing proceedings in which the judgement was issued in favour of the Receiver and the execution claim filed by the Recievers against the Insurers. This will be addressed further in Part II of this article.