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Qatar disruption and uncertainty expected

June 12 - International law firm Ince & Co has advised shipping and transportation companies with cargo interests in Qatar to plan for a period of disruption and uncertainty, following the decision by a number of Qatar's neighbours and other nations to cu

Concerns have arisen among shipping interests over the decision by the UAE, Saudi Arabia, Bahrain and Egypt to suspend land, air and sea transport links with the country, says Ince & Co. The law firm reports that a lack of official information is preventing any certainty over the practical implementation of the severing of maritime links between Qatar and other ports at this time.

Ince & Co urges that as the positions of different authorities is evolving, shipping companies do not yet have a complete picture on which to base its contingency planning, but should take care to distinguish between official and unofficial news.

The firm states that it is also prudent to review contractual arrangements and whether there is a mechanism in place to deal with these disruptions. Where practical, they should make provision for dealing with such issues as potential payment problems, cargo restrictions, illegality and sanctions.

Rania Tadros, managing partner at Ince & Co Dubai, explains: "There are a number of contractual issues facing the shipping industry as a result of these developments. Charterparty provisions over blockade and safe port/berth warranties may be relevant under these circumstances. The concept of frustration may also arise if a vessel cannot get close to its nominated port as a result of the measures announced by the UAE, Saudi Arabia and Bahrain. Given these and other issues, those entering into charterparties that might be affected by the closure of ports to Qatari trade should consider incorporating terms that allocate the associated risks.

"It is also possible that the wording of existing clauses may be wide enough to embrace the prohibitions put in place by the UAE and others in relation to Qatari vessels. A party may also be able to rely on a force majeure event if it is expressly entitled to do so under the contract."

According to Ince & Co, on June 11, 2017, further to individual circulars being issued by various ports in the UAE, the director general of the Federal Transport Authority (FTA) issued a notice to all UAE ports and ship agents making clear that in order to implement the decision of the government of the UAE on severing relations with Qatar, all UAE ports must not: receive any Qatari flagged vessels or Qatari owned vessels; load or discharge any cargo of Qatari origin; or load UAE cargo to Qatar.

Tadros added: "There is no reference to vessels not being given port clearance if the last port of call or next port of call is Qatar. As Fujairah Port has now updated its circular, this should mean that vessels which have loaded in Qatar and wish to bunker in Fujairah may be able to do so as long as they are not Qatari flagged or owned."

The Egyptian authorities have yet to comment whether they will extend their actions to include restricting access to the Suez Canal for Qatari vessels and cargo. "Although Article 1 of the Convention of Constantinople (1888) provides access to the Canal to all vessels, irrespective of flag, Article 10 permits the Egyptian authorities to take measures for the defence of Egypt and the maintenance of public order. Accordingly, it is possible that Egyptian authorities could use Article 10 as a reason to prevent entry," explains Tadros.

Port of Fujairah

 

www.incelaw.com

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