Aviation Law Guide: United Arab Emirates
Part 1 - General
1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/ or regulate aviation in your jurisdiction.
The UAE’s principal legislation governing aviation law is as follows:
- Federal Law Number 20 of 1991 regarding the civil aviation (the Civil Aviation Law);
- Federal Law Number 4 of 1996 concerning the Aviation Authority (the Aviation Authority Law);
- Federal Law Number 20 of 2001 concerning the amendments in the Aviation Authority Law; and
- Federal Law Number 8 of 1983 issuing Commercial Transaction Law, providing rules for Air Carriage.
- Federal Act Number 22 of 1972 concerning the participation by the UAE in the project for the establishment of an Arab Testing Unit for Air Navigation Equipment.
- Civil Aviation Regulation – Licensing Regulation of July 2011;
- Civil Aviation Regulation – General Regulation of March 2013;
- Civil Aviation Regulation – Operations Regulation of July 2011;
- Civil Aviation Regulation – Airworthiness Regulations of July 2011;
- Civil Aviation Regulation – Aviation Safety Regulations of February 2011;
- Civil Aviation Regulations – Aviation Security Regulations of May 2016;
- Civil Aviation Regulation – Air Navigation Regulations of September 2011;
- Civil Aviation Regulation – Aerodromes Emergency Services of February 2017;
- Civil Aviation Regulation – Safety Management System of June 2016;
- Civil Aviation Regulation – Concerning Unmanned Aircraft System (CAR UAS) in February 2017;
- Civil Aviation Regulation – Transport of Dangerous Goods by Air of May 2015;
- Civil Aviation Regulation – Foreign Operators Regulation of October 2016; and
- Civil Aviation Regulation – Light Sports Aircraft of March 2013.
1.2 What are the steps which air carriers need to take in order to obtain an operating license?
1.3 What are the principal pieces of legislation in your jurisdiction which govern air safety, and who administers air safety?
The principal piece of legislation which governs air safety is the Civil Aviation Law; however, there is Aviation Safety Regulations (the Safety Regulation) of February 2011 which governs the air safety. The Safety Regulation consists of three chapters which include passenger cabin safety, transport of dangerous goods by air, aviation accident and incident investigation.
- Air Navigation and Aerodrome (the ANA);
- Airworthiness (the AW);
- Flight Operations (the FOP);
- Licensing (the LIC); and
- Policy, Regulations, and Planning (the PRP).
1.4 Is air safety regulated separately for commercial, cargo, and private carriers? Are air charters regulated separately for commercial, cargo and private carriers?
1.5 Are airports state-owned or privately owned?
1.6 Do the airports impose requirements on carriers flying to and from the airports in your jurisdiction?
- Passenger Service Charges (the PSC), which is to be paid by the outbound airline. Infants, aircraft operating crew and transit/ transfer passengers continuing travel within 24 hours are exempted from PSC.
- Passenger Security and Safety Fee (the PSSF), payable on outbound airlines. Infants, aircraft operating crew and transit/transfer passengers continuing travel within 24 hours are exempted from PSSF.
- Advance Passenger Information Fee (the API) for arriving passengers on inbound airlines. Infants, aircraft operating crew and transit passengers continuing travel within 12 hours are exempted from API.
- Passenger Facility Charge (the PFC), which has recently been implemented and is payable by outbound airlines for departing passengers. Infants, operating crew and transit passengers with two flights on the same journey are exempted; however, transfer passengers are obliged to pay this charge.
1.7 What legislative and/or regulatory regime applies to air accidents? For example, are there any particular rules, regulations, systems and procedures in place which need to be adhered to?
- Any person having knowledge of an aircraft accident or incident should immediately notify the GCAA, and such notification should include all the details including, but not limited to: the manufacturer, model, nationality, registration mark and serial number of the aircraft; complete details of the owner; the date and time of the accident; complete details of the flight commander and cabin crew; the last point of departure; and the landing destination;
- Upon the receipt of the information, the GCAA will request that the state of the operator, the state of the manufacturer and the state of design provide the complete details regarding the aircraft.
1.8 Have there been any recent cases of note or other notable developments in your jurisdiction involving air operators and/or airports?
The Dubai Government is planning to increase the number of flights, and it is anticipated that it will handle 100 million passengers on a daily basis.
Part 2 Aircraft Trading, Financing, and Leasing
2.1 Does registration of ownership in the aircraft register constitute proof of ownership?
The GCAA, after having approved the application, will register the aircraft, including complete details of the aircraft in the Certificate of Registration (COR), and will hand over the COR to the owner of the aircraft or his representative, which will constitute proof of ownership.
- A certified copy of the certificate of a true commercial name of the entity, issued by the Commercial Registry of the state in which it was registered;
- a certified copy of the Board Resolution;
- a notarized confirmation letter signed by the entity’s legal representative; and
- the changed registration plate.
2.3 Are there any particular regulatory requirements which a lessor or a financier needs to be aware of as regards aircraft operation?
2.4 As a matter of local law, is there any concept of title annexation, whereby ownership or security interests in a single engine are at risk of automatic transfer or other prejudice when installed ‘on-wing’ on an aircraft owned by another party? If so, what are the conditions to such title annexation and can owners and financiers of engines take pre-emptive steps to mitigate the risks?
The Civil Aviation Law is silent on the concept of title annexation wherein the ownership or security interests in a single engine are at risk due to automatic transfer upon installation ‘on-wing’ on an aircraft.
2.5 What (if any) are the tax implications in your jurisdiction for aircraft trading as regards a) value- added tax (VAT) and/or goods and services tax (GST), and b) documentary taxes such as stamp duty; and (to the extent applicable) do exemptions exist as regards non-domestic purchasers and sellers of aircraft and/or particular aircraft types or operations?
Federal Decree Number 8 of 2017 concerning Value Added Tax (the VAT Law) is applicable to companies incorporated in the UAE. Therefore, companies are obliged to pay five (5) percent VAT on all goods and services; however, there are several exemptions for certain goods and services, within which a zero-tax rate will apply, such as the supply of means of transport by air used to transport passengers and goods, or the supply of aircraft specifically for assistance in rescue by air.
2.6 Is your jurisdiction a signatory to the main international Conventions (Montreal, Geneva and Cape Town)?
- The Cape Town Convention on International Interests in Mobile Equipment signed on 2 April 2008.
- The Convention for the Suppression of Unlawful Acts Against Safety of Civil Aviation (the Montreal Convention), signed on 23 September 1971.
- The Chicago Convention.
- The Convention on Offences and Certain Other Acts Committed on Board Aircraft (the Tokyo Convention), signed on 14 September 1963.
- The Warsaw Convention for Unification of Certain Rules Relating to International Carriage by Air, signed in 1929.
- The Convention on Suppression of Unlawful Seizure of Aircraft (the Hague Convention), signed on 16 December 1970.
2.7 How are the Conventions applied in your jurisdiction?
- Federal Decree 95 of 1980 approving the state’s Accession to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, signed at Montreal on 23 September 1971.
- Federal Decree Number 8 of 1981 approving the state’s accession to the Convention for the Suppression of Unlawful Seizure of Aircraft, signed at The Hague on 16 December 1970.
- Federal Decree Number 9 of 1981 approving the state’s accession to the Convention on Offences and Certain Other Acts Committed On Board Aircraft, signed at Tokyo on 14 September 1963.
- Federal Decree Number 13 of 1986 concerning the state’s accession to the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air (1929).
- Federal Decree Number 85 of 1986 concerning the state’s membership of the World Meteorological Organization.
- Federal Decree Number 79 of 1988 ratifying the state’s accession to the Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, supplementary to the Convention for Suppression of Unlawful Acts against the Safety of Civil Aviation.
Part 3 Litigation and Dispute Resolution
3.1 What rights of detention are available in relation to aircraft and unpaid debts?
There are no detention rights that exist with respect to unpaid fees or any air navigation fees. However, the GCAA can recover the amount by filing a civil action in a civil court against the owner, operator or lessee of the aircraft.
3.2 Is there a regime of self-help available to a lessor or a financier of an aircraft if it needs to reacquire possession of the aircraft or enforce any of its rights under the lease/finance agreement?
- Wet Lease: Under a Wet Lease agreement, the company which is leasing out the aircraft is required to provide Aircraft, Crew, Maintenance, and Insurance (ACMI) to the lessee. The Wet Lease is for a short time span, and during that span, the lessor holds the AOC, whereas the lessee is obliged to pay other charges or fees such as airport fees, charges, and other duties. The lessee even has financial control over the aircraft operations.
- Damp Lease: In a Damp Lease, the lessor provides the aircraft, maintenance, and insurance, except the crew. Thus, it is the responsibility of the lessee to hire the crew.
- Dry Lease: Under this arrangement, the lessor is only obliged to provide the aircraft; the rest is maintained by the lessee.
3.3 Which courts are appropriate for aviation disputes? Does this depend on the value of the dispute? For example, is there a distinction in your country regarding the courts in which civil and criminal cases are brought?
3.4 What service requirements apply to the service of court proceedings, and do these differ for domestic airlines/parties and non-domestic airlines/parties?
3.5 What types of remedy are available from the courts or arbitral tribunals in your jurisdiction, both on: i) an interim basis, and ii) a final basis?
- the preliminary injunction, to prevent the other party from doing something until the final judgment is passed; and
- orders to hold possession of the aircraft;
- de-registration of an aircraft;
- sale of an aircraft; and
- final injunctions requiring one party to do something and
- simultaneously prevent the other party from a certain act.
3.6 Are there any rights of appeal to the courts from the decision of a court or arbitral tribunal and, if so, in what circumstances do these rights arise?
- invalidity of the arbitration agreement;
- failure to adhere to the rules and regulations of arbitration proceedings;
- the award passed by the tribunal is beyond the scope of
- submission to arbitration;
- the arbitral tribunal was not composed within the rules and procedures agreed between the parties; and
- the dispute between the parties is not arbitrable in nature.
Part 4 Commercial and Regulatory
4.1 How does Dubai and the UAE approach and regulate joint ventures between airline competitors?
Joint ventures between airlines are regulated by Federal Law Number 2 of 2015 concerning Commercial Companies. There are several types of joint ventures, such as a Limited Liability Company, Public Joint Stock Company, Private Joint Stock Company and Limited Partnership Company. The LLC is considered the most suitable option, due to its flexible management system. The main consideration in choosing a joint venture on the UAE mainland is the shareholding ratio, which is restricted to 49 percent for a foreign company.
The company also has an option to opt for a free zone for establishing a joint venture. A free zone offers several advantages, such as the availability of 100 percent ownership in the venture.
4.2 How do the competition authorities in your jurisdiction determine the ‘relevant market’ for the purposes of mergers and acquisitions?
The competition authorities do not provide any clear guidance in order to explain what constitutes a “relevant market”. However, Federal Law Number 4 of 2012 on Regulation of Competition (the Competition Law) defines a relevant market as a commodity, service, or a group or products or services which may be substituted, on the basis of its price, characteristics and uses, or whose alternatives may be chosen to meet customers’ needs in any specific geographical area.
However, the definition of the relevant market may vary according to the establishment’s position in the market, economic consideration captured by the company, or any restrictive agreement signed by the parties.
4.3 Does Dubai or UAE have a notification system whereby parties to an agreement can obtain regulatory clearance/anti-trust immunity from regulatory agencies?
Yes, parties entering into a merger or capturing a significant economic consideration in the market are obliged to notify the Ministry of Economy (MOE) of the relevant Emirate. The notification must take place thirty (30) days prior to the signing of the merger agreement
4.4 How do Dubai or UAE approach mergers, acquisition mergers, and full-function joint ventures?
The Competition Law regulates mergers, acquisition mergers, and full-function joint ventures. The Competition Law includes restrictions on anti-competitive practices and simultaneously imposes merger control measures. The Competition Law provides that the acquirer of a proposed economic concentration which has the potential to affect the relevant market is required to inform the Ministry of Economy thirty (30) days prior to the commercial transaction. Also, it is obligatory for the companies to inform the MOE if the market share of the parties exceeds forty (40) percent of the total transactions undertaken in the relevant market.
4.5 Please provide details of the procedure, including time frames for clearance and any costs of notifications
The Competition Law provides that, in a proposed economic concentration which will have a severe impact on competition in the relevant market or will create a dominant position of the acquirer, the procedure through which the acquirer can seek clearance from the MOE is as follows:
The acquirer should submit an application in order to seek pre-approval from the Competition Authority of the MOE thirty (30) days prior to the contract.
Post receiving the application, the competition authority will undergo a substantive test.
Through the substantive test, the competition authority will ascertain the effects of the merger in the relevant market and whether or not the merger will create a dominant position in the market. However, it is still unclear whether or not parties can proceed with signing the agreement without actually obtaining approval from the authority. There is no specific cost for notifying the authority regarding a merger.
4.6 Are there any sector-specific rules which govern the aviation sector in relation to financial support for air operators and airports, including (without limitation) state aid?
The GCAA does not specifically provide rules governing financial support for air operators and airports.
However, the Dubai Government recently planned for an initial $3 billion financial deal in order to support Dubai International Airport and Al Maktoum International Airports. Financial support will be provided by a consortium of Dubai entities, including the State- owned Investment Corporation of Dubai, the Dubai Department of Finance, and the Dubai Aviation Corporation.
4.7 & 4.8 Are state subsidies available in respect of particular routes? What criteria apply to obtaining these subsidies? What are the main regulatory instruments governing the acquisition, retentio and use of passenger data, and what rights do passengers have in respect of their data which is held by airlines?
The UAE government does not provide any subsidies to aircraft with respect to particular routes.
Federal Law Number 5 of 2012 on Combatting Cybercrimes (the Cybercrime Law) is the primary piece of legislation which governs the acquisition, retention, and use of passenger data.
Passengers have the right to limit the information held by airlines or to make any changes to such information. The Cybercrime Law imposes severe penalties on the accused when actions result in the disclosure of personal information to the public.
4.9 In the event of a data loss by a carrier, what obligations are there on the airline which has lost the data and are there any applicable sanctions?
The Cybercrime Law does not specifically lay down obligations on the airlines in the event of loss of personal data; however, there is an obligation on the data controller to ensure that the data is processed properly and to take preventive measures against the unauthorized use or disclosure of personal data.
4.10 What are the mechanisms available for the protection of intellectual property (e.g. trademarks) and other assets and data of a proprietary nature?
The protection of intellectual property covers protection of trademarks, patents, copyright, geographical indications and industrial designs. The laws regulating intellectual property are:
- Federal Law Number 31 of 2006 pertaining to Industrial Regulation
- and Protection of Patents, Industrial Designs, and Drawings;
- Federal Law Number 7 of 2002 concerning Copyrights and Neighbouring Rights; and
- Federal Law Number 37 of 1992 on Trademarks as amended by Law Number 8 of 2002.
The aforementioned types of intellectual property can be protected by filing an application with the MOE, which undertakes a substantive test. Thereafter, upon satisfying itself of the validity of the documents submitted, the MOE issues the registration certificate to the owner of the intellectual property.
4.11 to 4.13 Is there any legislation governing the denial of boarding rights? What powers do the relevant authorities have in relation to the late arrival and departure of flights? Are the airport authorities governed by particular legislation? If so, what obligations, broadly speaking, are imposed on the airport authorities?
4.11 The GCAA does not have any specific regulations governing the denial of boarding rights; however, each major carrier in the UAE, such as Emirates, Etihad and Flydubai, has its own conditions for carriage and its own rules by which it may deny passengers their boarding rights.
On a similar note, passengers denied boarding rights involuntarily are entitled to claim compensation.
4.12 Under the Air Transport Regulations of 2007, the Department of Transport obliges the aircraft operators to establish minimum service quality standards, which include compensation for delayed flights.
4.13 The authorities managing airports in the respective Emirates are regulated by Federal Law Number 2 of 2015 on Commercial Companies (the Companies Law). For example, the Dubai Airports Company in the Emirate of Dubai is the airport authority regulating Dubai International Airport and Al Maktoum International Airport, under the Companies Law.
4.14 to 4.17 To what extent does general consumer protection legislation apply to the relationship between the airport operator and the passenger? What global distribution suppliers (GDSs) operate in your jurisdiction? Are there any ownership requirements pertaining to GDSs operating in your jurisdiction?Is vertical integration permitted between air operators and airports (and, if so, under what conditions)?
4.14 Federal Law Number 24 of 2006 on Consumer Protection does not specifically govern the relationship between the air operator and the passenger.
4.15 The Major Global Distribution Suppliers in the UAE are Rakha Al- Khaleej International LLC and Global Distribution FZE.
4.16 GDSs operating in the UAE can be in the form of Limited Liability Company, wherein fifty-one (51) percent of the shares are held by a UAE national.
4.17 Yes, air operators or airports can enter into joint ventures or mergers, as mentioned in question 4.1 of this UAE Aviation Law Guide 2018
Part 5 In Future
4.1 In your opinion, which pending legislative or regulatory changes (if any), or potential developments affecting the aviation industry more generally in your jurisdiction, are likely to feature or be worthy of attention in the next two years or so?
- CAAP 70 operators must ensure that they adhere to the physical specifications and register themselves with the GCAA, and should obtain a landing area certificate.
- CAAP 71 operators are required to obtain a primary accountable organization approval from the GCAA.
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Originally Published in ICLG to Aviation Law 2018
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