The West of England is to become the first of the big 12 protection and indemnity clubs to set up an office in Dubai, as the city becomes an increasingly important shipping centre.
The club will initially set up a three-strong office in the autumn, focused on claims handling, under the leadership of Gagan Dhillon, a former seafarer and claims director who is moving from NorthStandard.
West said it was making the landmark move as the region was a “stronghold” for the club, with its United Arab Emirates insurance portfolio of owned tonnage alone more than five times larger now than it was in 2018.
But the move is likely to be closely scrutinised by other clubs, with the UAE under the spotlight as a hub for shadow shipping operations.
West becomes the first member of the 12-strong International Group of P&I Clubs, which represents some 87% of the oceangoing tonnage, to set up a base in Dubai and it expects to expand operations there over time.
CEO Tom Bowsher said that the move made sense for West as one of the leading clubs in the Middle East region. It is part of a regionalisation drive since he took over as chief executive, which has seen the club open offices in Singapore and New York.
Dubai was an easy place to do business and the time difference was favourable, he said. The new Dubai office would serve the wider region, including the growing Saudi market and India.
“You can’t ignore that there’s momentum in shipping moving East,” said Bowsher. He cited growth in Singapore, Chinese ambitions to make Shanghai a maritime hub and the growing operations in Dubai.
Significant investment
“There’s a huge amount of investment going into Dubai,” he said. “We see many of the large legal firms there, most of the large brokers there … there are a number of traders moving in there and also a lot of owners.
“It’s a hive of activity and the West wants to be part of that and grow our presence in the region.”
West has also created a new post of head of Middle East operations and offshore and promoted Enam Hussain, a regional head of claims at the club, to the position.
Dhillon said: “I am very much looking forward to being part of West in this increasingly important maritime region.”
Dubai has evolved into a “maritime powerhouse” and was ranked fifth globally among prominent shipping centres, Abdulkareem Al Masabi, the chairman of the Emirates Shipping Association, told a shipping conference in December in Dubai.
He said shipping was responsible for about 10% of the UAE’s GDP and the industry had brought in an “entire thriving ecosystem of service companies, shipbrokers, managers, bankers and insurers into the UAE”.
Exercising caution in the region
But Bowsher said that the Luxemburg-domiciled club had to be “cautious in the region for obvious reasons” but said the main compliance teams of the club would remain at its headquarters in London and Greece.
The UAE has been at the centre of G7-linked enforcement activity on sanctions, with the UK prominent in blacklisting a number of ship managers based in Dubai.
They include Sun Ship Management, a unit of Russian state carrier Sovcomflot, which was based at the Dubai International Financial Centre where West will be setting up its office. Sun Ship is now listed as “inactive – suspended” on the public register at the special economic zone in Dubai.
West also covered eight, one-third, of the tankers in the fleet of Russia-specialist Fractal before it was hit by sanctions in February.
The Dubai-based unit of the Geneva-headquartered operation was blacklisted by the UK government in February despite the company insisting that it operated within the boundaries of Western sanctions regimes.
Fractal appealed the ruling but it no longer has any tankers on its books. It was going into liquidation, the company said in February.
Bowsher said that complex sanctions issues were far broader than Dubai, with the CEO of Fractal, Mathieu Philippe, living and banking in Switzerland.
West CEO acknowledges challenges
“I am not ignoring it and we understand some of the challenges, but we’ve been working in this region for a considerable amount of time and there are many legitimate, very good business operators there,” said Bowsher.
“While there has been a lot of focus on sanctions activity emanating from Dubai and the Middle East, we do see it elsewhere.
“The [West] policy on that has not changed and it will not change. It’s very thorough. I believe we go the extra mile and we have a very thorough and rigid approach to sanctioned business.
“We do not support sanctioned business… and the rules from the West and all other clubs are very clear on that.”
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