After obtaining a letter of subrogation from the consignee, the underwriters instituted an action against the carrier for short landing of goods shipped from Tilbury to Dubai, United Arab Emirates. The carrier objected to the jurisdiction of the Dubai civil courts to hear this matter on the ground that the action was based on a letter of subrogation and was therefore an ordinary money claim, not a maritime claim, and accordingly only the Shari’a Court had jurisdiction over this matter. Relying on Art. 398 of the Federal Maritime Law, the Dubai Court of Cassation rejected this argument and held that the civil courts in Dubai enjoyed jurisdiction to hear cargo claims instituted on the strength of letters of subrogation provided by cargo interests. Article 398 provides that the insurer shall be subrogated to rights and claims which the insured may have, up to the extent of any payment of compensation that it has made for any losses included in the insurance.

The carrier also pleaded the defence of package limitation while the plaintiff relied on a reference in the bill of lading to the relevant letter of credit as a declaration to