Etihad Rail: The UAE’s First National Railway Project
Transport & Logistics Focus
Wael ElgouhariSenior Associate,Transport & Insurance
Ameen KimParalegal,Transport & Insurance
The UAE Railways Program (the “Program”), which is an ambitious project worth a total value of AED 50 billion, aims to create an integrated, reliable, and sustainable transportation system for both goods and passengers throughout the UAE. The Program comprises of three key projects aimed at enhancing transportation infrastructure: The Freight Rail provides an integrated goods transportation system to connect industrial centers, the Rail Passenger Services aims to connect 11 cities at a speed of 200 km/h, accommodating over 36.5 million passengers annually by 2030, and the Integrated Transportation Service (ITC) aims to provide smart transportation solutions such as a light rail network and advanced applications.
At the forefront of this initiative is Etihad Rail, the revolutionary transportation network that connects major cities in the UAE, spanning from Ghuwaifat to Fujairah. The Etihad Rail was established in June 2009 under Federal Law No. 2 (as amended) as a public joint stock company based in Abu Dhabi with a capital of one billion AED (the “Etihad Rail Law”). Its services cover a broad range of items, including aggregates, consumer goods, perishable food and beverage items, and various other products, such as hay, containers, ceramics, polymers, bulk shipments, sugar, metals, waste, aggregates, consumer goods, and more.
The provisions of the Etihad Rail Law states Etihad Rail may possess, rent, lease, buy, sell, operate and maintain all types of trains and assume all railway transport activities (trains and underground metro) at the federal level (Article 8(1)). It may also undertake all necessary, relevant or associated services and works, including transport of individuals, cargoes, goods and post, in coordination with the competent authority (Article 8(4)) and collect charges of services from train users pursuant to the regulations and resolutions issued by the Cabinet, in coordination with the competent authority (Article 8(6)). While the law invokes cooperation with the competent authorities of the respective Emirates and other relevant federal legislations, in case of contradiction, this law maintains supremacy over any other legislations or policies that conflict with its provisions (Article 21).
Relevant legislations governing the Etihad Rail include Federal Law No. (8) Of 2020 Regulating Railways (the “Federal Railway Law”), which applies to federal railways connecting the Emirates of the UAE as well as operators, maintainers and users of the federal railway services. Its provisions state that the infrastructure manager and the operator of the railway services are primarily responsible of the safety and security of the federal railway (Articles 21, 22, 28) while penalties of hefty fines or imprisonment are imposed on any individual that deliberately sabotages or damages the railway, its infrastructure, or assets (Chapter VII).
The Cabinet Resolution No. (5) of 2022 on the Executive Regulations of Federal Law No. (8) of 2020 Regulating Railways (the “Resolution”), further provides that the infrastructure manager and the operator must have adequate third-party liability insurance or the equivalent in case of accidents or incidents (Article 8). While the Resolution states that any disputes related to the railway assets and services are to be filed and settled at the Ministry of Energy and Infrastructure (Article 16), the Federal Railway Law allows for the competent court to have jurisdiction for possible conciliation with regards to any actions commenced against persons for breaching provisions of the law and its accompanying regulations and resolutions. If the violator refuses conciliation, the matter will be subsequently referred to the public prosecution (Article 43, Federal Railway Law).
In terms of the liability of the carrier for the damages that may occur for the cargo or consignment that is transported by railway, the Federal Railway Law and its Resolution are silent in this regard. Accordingly, it is likely that the provisions of the Federal Law No. (9) of 2011 regarding the Land Transportation (the “Land Transportation Law”). The Land Transportation Law applies to any vehicle, bus, truck, lorry and trailer that runs on the roads, including those that move on railroads. It prescribes liability onto the carrier for ensuring the safety of passengers inside their respective carriage means of land transport. The carrier is additionally obligated to provide indemnity for any loss, damage, deficiency, or improper carriage of luggage (Article 22). The accompanying Board of Directors Resolution No. (8) of 2017 On the Executive Regulations of Federal Law No. (9) of 2011 Concerning Land Transport further reiterates that persons licenses to practice land transport under the Federal Transport Authority (Land & Maritime) is responsible for compensation of damages incurred to goods and passengers as determined by the respective insurance policy (Article 29).
The Federal Decree-Law No. 50 of 2022 Issuing the Commercial Transactions Law (the “Commercial Code”) shall also apply. Section 8 of the Commercial Code contains general provisions regarding the transport of persons and property exclusive of marine transport and governs the relation between the carriers and the cargo owners (Article 271). In relation to liability, the Commercial Code states that the carrier will be held responsible for the actions of both itself and its affiliated entities while rendering their services (any individual employed by the carrier to fulfil the obligations outlined in the transportation contract is considered subordinate) (Article 276). There are a few exceptions, such as accidents, damage, and destruction of the carriage occurred due to force majeure events (Article 277) or any damage arising due to the disruption of carriage or deviation from the set route that are necessary assistance to ill or injured persons (Article 278). The subsequent chapters of the Commercial Code governs contracts of carriage specific to cargo and passengers, outlining the rights, obligations, and responsibilities of all parties involved in such agreements.
The establishment of the Etihad Rail is a significant move towards the UAE’s ambitious goals for economic growth and sustainable transportation. We, at Al-Tamimi & Co., understand the importance of minimizing liability claims in relation to the operations and services of the Etihad Railway as its reach continues to expand throughout the UAE to the broader GCC region. Although we hope that such claims do not arise, we are fully prepared to address any legal concerns upon request. It is important to note that there is currently no established case law governing these types of claims associated with the operations of Etihad Railway, and therefore, assessment of such claims by the UAE courts is untested. However, our experienced team of transport lawyers is well-versed in navigating the UAE legal landscape and can competently offer to address any potential liability issues that may arise.
For further information,please contact Omar Omar or Wael Elgouhari.
Published in August 2023
