I have been practising commercial law in the UAE for nearly two decades. And in that time, the mistake I see most often is not a complex one. It is simple. Businesses sign standard-form contracts, file them away, and assume the legal architecture holds. Sometimes it does not.

This week's judgment from Dubai's Court of Cassation is a good example of what that looks like in practice.

The Dispute

The case, Commercial Cassation No. 353/2026, involved a maritime towage arrangement between two companies: Trans World Ship Management LLC, which owned and operated the tugboat, and Zenith Corporation, which chartered it.

The contract was a TOWCON 2008, the Baltic and International Maritime Council's standard-form towage agreement. Zenith chartered the tug "Milena 69" to haul a barge from Ras Al Khaimah to Mumbai and back. Fixed charter fee: $100,000. Daily demurrage for late return: $2,000 in port, $3,500 at sea.

The tug left port on 22 December 2022. It arrived in Mumbai on 6 January 2023. Then, for reasons that became the subject of considerable dispute, the barge sat there. It was not formally separated and handed back until 12 April 2023, a full 94 days after the three-day grace period expired.

At $2,000 a day, that comes to $188,000 in delay penalties alone. Add surveyor fees, subtract partial payments already made, and the outstanding sum was $209,292. Trans World refused to pay. Zenith went to the Dubai courts.

Three Arguments, Three Dead Ends

Trans World raised three grounds of defence. The Court of Cassation rejected all of them, and the reasoning is worth understanding.

The first was jurisdictional. Trans World argued that Part II of the TOWCON contract contained a BIMCO dispute resolution clause pointing to Singapore arbitration, which should have prevented Zenith from suing in Dubai at all. It is a sensible argument in principle. Exclusive arbitration clauses do oust local court jurisdiction when properly constituted.

The problem was the document itself. Part II, including Clause 33 on dispute resolution, had been struck through entirely. Zenith also explicitly denied any legal relationship with that section. The court was straightforward about what this meant: arbitration is not presumed. It must be clearly agreed and clearly evidenced. Trans World could not produce a single document, not one email, not one signed addendum, proving the arbitration agreement existed. Without evidence, there is no clause.

The second argument was limitation. Clause 31 of the same Part II contained a one-year time bar for bringing claims. Trans World argued the lawsuit was filed too late. Again, the same obstacle. Because Zenith had denied the authenticity of Part II and Trans World had only produced a photocopy rather than the original, the document carried no evidential weight under Article 28 of Federal Decree-Law No. 35 of 2022. A photocopied private document, explicitly contested by the opposing party, cannot found a limitation defence. The argument failed on the same facts that killed the arbitration point.

The third ground was factual. Trans World challenged the maritime expert's calculation of the delay period, arguing the barge had actually been returned on 5 February rather than 12 April, and that Arlo Shipbuilders had been charging demurrage beyond the true handover date. The court was not persuaded. The expert had grounded his findings in official ship exit certificates, port manifests, and a formal delivery receipt dated 12 April 2023, all government-issued or formally authenticated. Trans World produced no equivalent documentation. The Court of Cassation, consistent with long-standing UAE appellate practice, declined to substitute its own factual assessment for the trial court's considered findings.

The original judgment of AED 689,960 plus 5% annual interest from the date of filing was upheld. Trans World was also ordered to pay costs and attorney fees, with its security deposit confiscated.

The Business Lessons

Three things stand out to me from a commercial advisory perspective.

First, when you modify a standard-form contract, you must understand what you are removing. The BIMCO provisions in TOWCON, covering arbitration, limitation periods, governing law, are not decorative. They are the legal infrastructure of the agreement. Strike them out without replacing them and you lose the protections they carry. Trans World appears to have done exactly that, and when the dispute arose, neither the arbitration shield nor the time bar was available.

Second, demurrage is not boilerplate. It is a financial mechanism with real economic consequences. At $2,000 per day, 94 days of delay generates a liability that exceeds the original charter value. If your operations team is making decisions about vessel returns without understanding that the penalty clock is running, the exposure is significant and it compounds quietly.

Third, document discipline before UAE courts is not optional. The Court of Cassation reiterated settled principle in this judgment: a photocopied private document that is explicitly denied by the opposing party has no evidential value. Original documents, authenticated port records, properly maintained invoicing systems, these are what you rely on when things go wrong in court.

Reading This Judgment Alongside the Current Conflict

I want to add something that was not in the original facts of this case but cannot be ignored if you are advising businesses operating in this region right now.

Since Operation Epic Fury began on 28 February 2026, the commercial environment that maritime contracts like TOWCON were designed to navigate has changed in ways that make cases like this one more common, not less. The Strait of Hormuz, normally one of the world's busiest waterways, has seen shipping lines reroute entirely to avoid it, even before Iran formally threatened vessels attempting transit. Tanker traffic dropped by approximately 70% in the days immediately following the strikes, with over 150 ships anchoring outside the strait rather than risk passage. Shortly afterwards, traffic fell to near zero.

The consequences for contractual performance are severe and, in many cases, legally unresolved. Maersk, Hapag-Lloyd, CMA CGM and MSC have all suspended or paused operations through the Strait, rerouting vessels around the Cape of Good Hope. Voyages that once took days now take weeks. Demurrage clocks that were ticking modestly are now running hard against charterers who have no practical way to deliver or retrieve vessels on schedule.

This creates a legal problem that sits right at the heart of the Trans World judgment. When a voyage is delayed not because of operational failure but because the waterway is functionally closed, who bears the demurrage liability? The answer depends almost entirely on how your force majeure clause is drafted, whether it was struck through like the arbitration provisions in this case, and whether you have documented the circumstances that caused the delay with the kind of official, authenticated evidence the Dubai courts require.

War risk insurance has been widely withdrawn for vessels operating in the region, further constraining maritime movement. That matters enormously for liability allocation. Standard voyage charter demurrage clauses generally do not excuse delay caused by war risk diversions unless the contract explicitly addresses it. If your TOWCON or GENCON agreement is silent on this, or if Part II was modified without careful thought, you may find yourself in exactly the position Trans World found itself in: arguing an equitable case in a courtroom without the documentary or contractual foundation to support it.

War risk insurance premiums increased significantly from the moment the conflict began on 28 February 2026. By mid-March, insurance rates for Strait of Hormuz transit had reportedly increased by four to six times compared to the previous week. Those costs land somewhere in the contractual chain. Who absorbs them is a question of contract drafting, and right now, across the maritime industry in the Gulf, many contracts were never drafted with this scenario in mind.

There is also a jurisdiction point worth flagging. Iranian missile strikes targeted military and civilian infrastructure across the UAE, Qatar, Bahrain and Saudi Arabia, and container ships have been attacked in waters close to Jebel Ali. The practical ability to perform certain obligations under maritime contracts governed by UAE law, including timely delivery, return of vessels, and survey obligations, is being directly affected by events on the water. Whether those circumstances constitute a legally recognised excuse for non-performance before UAE courts is an open question, and one that will generate litigation for years.

What this judgment tells us is that those arguments will need to be built on solid documentary evidence and properly preserved contractual clauses. The courts here are methodical. They follow the paper trail. If the force majeure provision was struck through, if the arbitration clause is in doubt, if the documentation does not support your version of events, the outcome is likely to follow the same logic applied to Trans World: the penalty stands, and you pay.

A Closing Thought

Cases like this one rarely involve bad faith on either side. What they usually involve is a commercial relationship moving faster than the legal management around it. The contract gets signed under time pressure. The operational decisions get made without reference to the contractual terms. The documentation does not get maintained the way it should. And then a dispute arises, and what looked like a manageable disagreement becomes three rounds of litigation and a final judgment from the UAE's highest commercial court.

That was true in a peacetime shipping market. It is considerably more true today, when the physical conditions of maritime trade in the Gulf are shifting week by week and the contractual frameworks underpinning that trade were not designed for what is currently happening in the Strait of Hormuz.

If your business involves maritime, logistics or cross-border supply chain contracts with UAE law exposure, this judgment and the current conflict together make a compelling case for an urgent contract review. The questions to ask are straightforward: Are your force majeure provisions intact and clearly drafted? Is your dispute resolution clause evidenced properly? Does your documentation system produce the kind of authenticated records that would survive challenge before a UAE court?

Those are not abstract questions. Right now, they are live ones.