The m.v. Jay Bola carried cargo for consignees in Dubai and Sharjah from Bangkok. A fire developed during the voyage due to spontaneous combustion of a cargo of charcoal. The fire was extinguished by water, which damaged another cargo, of rice. The owners of the vessel duly declared general average and appointed average adjusters. All the cargo was released after average bonds were signed by the respective cargo interests. Immediately after taking delivery, some of the cargo interests instituted proceedings against the vessel, its owners and charterers and arrested the vessel. The Court of First Instance held that it had jurisdiction to hear and determine the suit notwithstanding a provision in the bill of lading that an action may be instituted against the carrier only in its principal place of business, which in this instance was London. The court proceeded to find that the owners were not responsible, as the vessel was on charter, and dismissed the action instituted against the owners. The court also held that the actions against the charterers were premature in view of the pending general average proceedings.

Multiple appeals were filed. In two cases the Court of Appeal held that the owners and the charterers were jointly and severally responsible to the cargo interests, while in two other cases a different bench of the Court of Appeal held that only the charterers were liable to the cargo interests, as the vessel was on charter. Both benches of the Court of Appeal dismissed the defences of lack of jurisdiction and of pending general average proceedings.

All four suits were brought before the Court of Cassation. On the defence of lack of jurisdiction, the Court of Cassation held that the courts of Dubai had jurisdiction under Art. 126 of the Federal Maritime Law. That Article, inter alia, provides that the civil court in the area of which an arrest has been effected shall have jurisdiction to adjudicate upon suits, if the claimant has a usual place of residence or head office in the United Arab Emirates. The Court of Cassation further held that the actions against the owners and the charterers were prematurely instituted in view of the pending general average proceedings and dismissed the claims against both defendants. (The Court of Cassation accordingly stated that it was not necessary to consider the other defence raised by the owners, which was that they were not liable as