Buying, Building and Registering a Ship
Section Two of Federal Decree-Law No. 43 of 2023 — the Maritime Law, in force 29 March 2024

Two provisions decide whether a UAE ship sale is valid at all, and both produce nullity rather than a remedy in damages. Article 24 requires the Ministry to attest every contract creating, transferring or terminating a right in rem over a ship — without attestation the contract is void. Article 25 prohibits any transfer of ownership before the debts recorded in the Register are paid or the creditor consents — and a transfer in breach is void.

Both sit in Federal Decree-Law No. 43 of 2023, the Maritime Law, which replaced the 1981 Maritime Code and came into force on 29 March 2024. It runs to 369 articles across nine sections. This note covers Section Two — the ship itself: building, nationality, registration, the navigation licence, sale and transfer, and co-ownership.

1. A ship is movable property, but not that kind of movable

Article 7(1) classifies the ship as tangible movable property, to which the ordinary rules on movables apply — except the provisions on acquiring ownership by physical possession, "whatever the aspects thereof may be".

That exception is the foundation of everything else in this note. Possession of a vessel proves nothing about title. Ownership is a function of the Ships Register, which Article 7(2) requires the Ministry to maintain, recording each vessel's type, size, classification, navigation purpose and sailing area as the Executive Regulations prescribe.

Article 8 adds the vessel's identity requirements: a specific name displayed prominently; gross and net tonnage recorded in a certificate approved by the Ministry; classification by a society the Ministry licenses or whose certificates it approves; and a home port nominated by the owner on application for registration.

For a buyer the practical consequence is immediate: due diligence is a register exercise, not an inspection exercise. A survey tells you about the asset; only the Register tells you who owns it and what is recorded against it.

2. Newbuilds: the contract is void unless it is in writing

Article 9(1) defines the shipbuilding contract as one by which the builder undertakes to build to specifications determined by the applicant after their approval by the Ministry or its authorised representative.

Note that the formality extends to amendments. A variation agreed on a call, in a yard meeting or by conduct is void, however well evidenced. On a project where specification changes run into the hundreds, that is a document-control obligation rather than a legal nicety.

Article 9(3) and (4) create a second register — the Register of Ships Being Built — and place the duty to record the contract on the builder. A buyer financing a newbuild should verify that recording has happened rather than assume it; it is the builder's obligation and the buyer's exposure.

When title passes — Article 10

• 10(1) — ownership does not transfer to the applicant until he accepts handover after testing, unless otherwise agreed. Acceptance, not payment and not launch, is the default trigger.
• 10(2) — where the parties agree that ownership transfers during construction, the builder may withhold the ship on completion until the full price is paid. The buyer may own it and still not be able to take it.

That second limb is the one to price. Early title transfer is commonly negotiated for financing or tax reasons; Article 10(2) means it buys the buyer ownership without possession, and the yard retains the commercial leverage regardless.

Hidden defects — Article 11, and a limitation rule that favours the buyer

Two points a buyer should not give away. Signing off a clean protocol of delivery and acceptance does not waive hidden defects — 11(1) says so expressly. And the limitation formula is "whichever is later", so a defect detected in month 20 gives until month 32, not until the second anniversary. Yard-form wording that converts this into a fixed twelve-month guarantee from delivery is offering less than the Law.

11(3) extends the identical regime to repair yards, which matters far more often than newbuild disputes do.

3. Registration and nationality: who may own a UAE ship

Article 12(1) is the rule: the ship acquires UAE nationality by being registered in the Ministry's Ships Register. Article 14 then confines the flag to registered ships.

Article 13 sets the eligibility conditions, and all three must be met:

The age cap in 13(c) is the condition most likely to defeat a transaction late, because it is a fact about the vessel rather than about the parties, and it cannot be cured. It should be the first question asked on any second-hand acquisition intended for the UAE flag.

Cabotage and restricted activities — Article 15

Foreign ships may not carry out carriage between UAE ports, or fishing, towing, piloting, cruise, supply or fuelling, or other maritime services in UAE maritime zones, without Ministry approval. Separately, no military activity, hydrographic survey, marine scientific research, search or exploration for oil and other resources, or work connected with submerged cultural heritage may be carried out in the exclusive economic zone without prior permission from the competent authorities.

Article 16 extends a registration requirement to seagoing watercraft generally — no person may practise any maritime activity through one unless it is registered with the Ministry or the competent authority — and Article 17 provides for a separate register for watercraft and buoys.

4. Flagging in and flagging out: Articles 18 to 21

The Law deals with both directions of bareboat registration, and the conditions differ.

In — Article 18

The charterer of a ship registered abroad that meets the Article 13 conditions may apply to register it with the Ministry, provided the charter party runs for not less than six months. Article 18(2) leaves the mechanism and procedures for registering a chartered bareboat to the Ministry.

Out — Article 19, and the condition that stops most applications

The Ministry may license the owner of a UAE-registered ship to fly another country's flag where it wishes to bareboat charter out to a charterer registering abroad. The application must carry the bareboat charter party and a letter from the foreign registry confirming the charterer's home country has approved registration and the raising of its flag.

A mortgaged vessel therefore cannot be flagged out without the mortgagee's written consent. For a financier that is useful protection obtained without negotiating for it; for an owner planning a bareboat-out structure it is a consent to obtain early, not at closing.

Article 20 then describes the effect: the Ministry notifies the foreign maritime administration, and the permission freezes the ship's registration in the Ministry, with the permitting country noted in the Register. Where the ship is under enforcement attachment in the State, the Ministry notifies the foreign registration office to take steps for judicial sale.

Deregistration — Article 21

A ship is removed from the Register where it permanently loses suitability for navigation and becomes a wreck; where a registered bareboat charter abroad is terminated; where ownership is transferred to a person who does not meet the registration conditions; on a court order cancelling registration; on the owner's application; or where the public interest requires it.

The third ground is a transaction risk in plain sight: selling to a buyer who cannot satisfy Article 13 does not merely leave the flag unchanged, it triggers removal from the Register.

5. The two provisions that void a sale: Articles 24 and 25

This is the heart of a UAE ship purchase, and both rules operate on validity rather than on remedy.

Article 24 — attestation, or the contract is void

Note the breadth. It is not confined to sales. Creation of a right in rem captures a mortgage; termination captures a release or discharge. A mortgage executed without attestation is void, and so is a discharge.

Article 24(2) addresses the cross-border case: where the contract is concluded outside the State in respect of a ship registered there, it is to be executed before the consul of the country or before the competent authority abroad. Article 24(3) requires the ship-related data in the contract to be full and accurate, so that the parties can be fully aware of all relevant information — which puts the vessel's particulars inside the validity analysis rather than leaving them to warranty.

Article 25 — no transfer over recorded debts

So the Register is not merely a priority mechanism; it is a transfer gate. A buyer who closes over an unreleased recorded debt has not acquired anything. The practical sequence is therefore fixed rather than negotiable:

1. Obtain a current Register extract and identify every recorded debt.
2. For each, obtain either discharge or the creditor's written approval to transfer.
3. Attest the contract with the Ministry under Article 24.
4. The transferor returns the registration certificate; the Ministry issues a new certificate to the transferee on application (Article 25(2)).

Article 26 — dismantling and wreck sales

The owner may not dismantle the ship or sell its wreckage without Ministry approval, and the Ministry may not approve unless debts and compensation are paid, together with the maritime debts recorded in the Register owed to the State. Scrap and recycling transactions therefore carry the same clearance requirement as a sale.

6. Co-ownership: 100 shares, and a right of redemption

Article 27(1) provides that where there are multiple owners they are co-owners — natural persons, legal persons or both — and the ship is divided into 100 shares, with each owner's interest determined by the shares held.

Article 27(2) allows management to be entrusted to one or more managers, chosen from among the owners or from third parties, with the approval of owners holding more than half the shares. The mechanism for managing the ship, taking decisions and objecting to them is left to the Executive Regulations.

Article 28 — you cannot deal with your share alone

• No co-owner may mortgage or sell its share without the approval of the rest.
• On a sale, the notice must state the price determined for the share.
• Each owner has a right to request redemption of the sold share, by notice to both seller and purchaser, on paying the price and expenses — a pre-emption right over co-owned tonnage.
• The disposition is void if it would render any of the State's registration conditions invalid, absent the approval of all.

The last limb links back to Article 13. A share sale that takes majority ownership outside the UAE/GCC or domicile categories is not merely a flag problem — it is void without unanimous approval.

For anyone acquiring a minority interest in a vessel, the practical reading is that the shareholding is illiquid by statute: it cannot be mortgaged or sold without the others' approval, and any sale is exposed to redemption by a co-owner at the stated price.

7. Checklists

Buying a second-hand vessel for the UAE flag

• Check the age first. Article 13(c) caps registration at 20 years from completion of building and there is no cure.
• Test ownership against Article 13(b): majority UAE/GCC ownership, or a domicile, headquarters or ship management office in the State.
• Take a current Register extract. Possession proves nothing — Article 7(1) excludes acquisition by possession.
• Identify every recorded debt and obtain discharge or written creditor approval before transfer. Article 25 voids a transfer made without it.
• Have the contract attested by the Ministry. Article 24 voids it otherwise, and the same applies to any mortgage or release.
• Ensure the ship particulars in the contract are full and accurate (Article 24(3)).
• Collect the registration certificate from the seller and apply for a new one (Article 25(2)).
• Confirm the navigation licence position under Article 22 — registration alone does not permit activity.

Newbuild

• Put the contract and every amendment in writing. Article 9(2) voids anything else.
• Verify the builder has recorded the contract in the Register of Ships Being Built (Article 9(4)) — it is the builder's duty and your exposure.
• Decide deliberately when title passes. The default is acceptance after testing (Article 10(1)); early transfer leaves the yard a right to withhold until full payment (Article 10(2)).
• Do not accept a guarantee period shorter than Article 11(2) — one year from detection or two years from takeover, whichever is later.
• Remember a clean takeover report does not waive hidden defects (Article 11(1)).

Financiers

• Attest the mortgage. Article 24 makes an unattested right in rem void, and the same applies to its discharge.
• Note the protection in Article 19(3): the vessel cannot be flagged out without all rights in rem settled or the holders' written consent.
• Watch Article 20(2) — a flag-out permission freezes the UAE registration.
• Recorded debts block transfer under Article 25, so registration is a control as well as a priority.

Co-owners

• The ship is 100 shares (Article 27(1)); management needs holders of more than half (27(2)).
• You cannot mortgage or sell your share without the others' approval, and your sale is exposed to redemption at the stated price (Article 28(1)).
• A share transfer that breaks an Article 13 registration condition is void without unanimous approval (Article 28(2)).

Primary sources

Every provision quoted above is taken from the instruments below. Links go to the official consolidated text, not to secondary commentary.

• Federal Decree-Law No. 43 of 2023 concerning the Maritime Law — issued 28 Sep 2023, Official Gazette 760, in force 29 March 2024; 369 articles. Section Two — the ship, Arts 7–67
• UAE Ministry of Energy and Infrastructure — maritime — the Ministry that maintains the Ships Register and attests dispositions under Art 24
• UAE Ministry of Justice — laws and legislation — consolidated Arabic text, which governs over any English rendering

Questions we are asked

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Published 2026-10-03. General information only — not legal advice. Contact us for matter-specific advice.