Storm Destroys Cargo During Voyage in UAE: Can Charterer Refuse to Pay Full Freight?
<p>When a voyage at sea turns rough and cargo is lost to natural disasters, disputes often arise between shipowners and charterers over who bears the financial burden. A recent query to <i>Ask the Law</i> in the UAE sheds light on such a case — where a storm destroyed cargo during a voyage, leading the charterer to withhold full freight payment.</p><p>The question came from a shipowner who had chartered his vessel to transport cargo between harbours. During the journey, a storm broke out, damaging part of the cargo. Despite the ship being inspected and approved by the charterer prior to departure, the charterer refused to pay the full freight, arguing that the vessel was not adequately equipped to handle rough weather.</p><p>The shipowner sought legal clarification on whether the charterer had the right to withhold payment under UAE maritime law.</p><h4><strong>Legal interpretation under UAE Maritime Law</strong></h4><p>According to <strong>Article 141 of Federal Decree by Law No. (43) of 2023 Concerning the Maritime Law</strong>, the <strong>shipowner is liable</strong> for damage to cargo received aboard the ship, but only <strong>within the limits defined in the charter party agreement</strong>.</p><p>However, this liability is <strong>not absolute</strong>. The law clearly provides that a shipowner is <strong>relieved of liability</strong> if it can be proven that:</p><p><strong>All contractual obligations were fulfilled</strong>, and</p><p><strong>The damage did not result from defective performance</strong> of those obligations.</p><p>In essence, if the shipowner ensured the vessel was seaworthy, properly equipped, and operated by a competent crew — and the cargo damage resulted purely from an unavoidable natural event (such as a storm) — then the shipowner cannot be held responsible for the loss.</p><h4><strong>What defines a seaworthy vessel?</strong></h4><p>A <strong>voyage charter</strong> is a legal contract in which the <strong>shipowner agrees to provide a seaworthy ship</strong>, equipped with the necessary provisions, supplies, and crew, in exchange for a <strong>freight fee</strong>. The vessel must be suitable for the agreed voyage and maintained in that condition throughout the journey.</p><p>The <strong>charterer</strong>, on the other hand, has a duty to pay the full freight unless the shipowner fails to meet these obligations.</p><p>In this case, the shipowner had taken all necessary precautions — fulfilling the terms of the charter agreement and allowing the charterer to inspect the ship before sailing. The damage, therefore, occurred due to external natural forces rather than negligence.</p><h4><strong>Can the charterer withhold payment?</strong></h4><p>Based on the above legal provisions, the <strong>charterer cannot refuse to pay full freight</strong> merely because of cargo loss caused by a storm, provided the shipowner can prove that:</p><p>The vessel was <strong>seaworthy</strong> before and during the voyage.</p><p>All <strong>safety and maintenance protocols</strong> were followed.</p><p>The <strong>crew acted prudently</strong> during the storm.</p><p>The damage occurred due to <strong>force majeure (uncontrollable natural forces)</strong> and not due to any human error or equipment defect.</p><p>In maritime law, such natural occurrences are often classified under <strong>“perils of the sea”</strong>, which exempt the shipowner from liability if due diligence can be demonstrated.</p><h4><strong>Practical implications for shipowners and charterers</strong></h4><p>This ruling highlights a critical aspect of <strong>UAE maritime contracts</strong> — the importance of <strong>documenting all pre-voyage inspections, safety measures, and maintenance records</strong>. Such evidence can help shipowners defend against claims or freight disputes arising from unforeseen incidents.</p><p>For charterers, it serves as a reminder that <strong>risk allocation in charter party agreements</strong> must be clearly defined. Unless there is proof of negligence or defective performance by the shipowner, natural events do not entitle a charterer to withhold or reduce freight payments.</p><h4><strong>Conclusion</strong></h4><p>In summary, under <strong>UAE Federal Decree Law No. (43) of 2023</strong>, the shipowner’s liability depends on whether the vessel was seaworthy and properly managed. If the damage resulted purely from a storm — an uncontrollable natural cause — and the ship met all contractual and legal obligations, the <strong>charterer remains legally obligated to pay the full freight</strong>.</p><p>As legal expert <strong>Mohammad Ebrahim Al Shaiba</strong> explains:</p><blockquote><p>“The charterer must pay the full agreed-upon freight if the shipowner can prove that all obligations were fulfilled and that the damage did not occur because of any defective performance.”</p></blockquote><p>This case underscores the importance of <strong>transparency, documentation, and compliance</strong> in maritime operations — especially in an era where unpredictable weather and global trade disruptions are increasingly common.</p>