UAE businesses urged to strengthen legal and risk systems

UAE businesses operating in shipping, energy and logistics sectors are being urged to bolster their legal and risk-management systems amid ongoing maritime uncertainties. These uncertainties could lead to higher insurance costs, contractual disputes and complex cross-border claims. Legal experts recommend that companies map out their contractual obligations before a dispute escalates to arbitration or court, as force majeure, hardship and war-risk clauses are essential.

Jessica Zakhour, partner at Legaline Platform, advises companies to establish close relationships with insurers and protection and indemnity (P & I) clubs to maintain awareness of war-risk coverage changes. She emphasizes the importance of maintaining a clear record of decisions made during crises, as this evidence will be used by courts or arbitrators to determine if a party acted reasonably.

The surge in maritime disruptions has also led to an increased need for artificial intelligence and contract intelligence tools. Dmitry Grinik, founder of Legaline Platform, suggests that legal departments use such software to scan large portfolios of charter parties, insurance policies and supply agreements. These tools can flag relevant force majeure, war-risk, or notice clauses triggered by specific events.

Furthermore, integrating data sources, including maritime activity, sanctions alerts, vessel-tracking data, contractual obligations, government advisories and insurance notifications, can help identify exposed contracts and notification deadlines more efficiently.

The Dubai International Arbitration Centre has begun adopting digital case management systems to streamline evidence preservation during crises. A similar approach may prove beneficial during real-time crises, enabling companies to maintain proper documentation of their actions. Complex legal issues can arise when multiple contracts and jurisdictions are involved in a single maritime incident.

Zakhour notes that liability, jurisdiction, and enforcement must be carefully assessed, as different contracts and laws may apply to the same voyage. Additionally, the US government has established a reinsurance facility of $40 billion to support private insurers in managing the scale of the risk.