The United Arab Emirates (UAE) offers a robust legal framework for resolving commercial disputes, with options ranging from litigation to arbitration. Understanding this system is crucial for both domestic and international investors. This comprehensive guide delves into the UAE's dispute resolution process, court structure, and alternative dispute resolution (ADR) methods, providing insights into the most effective ways to handle commercial disagreements.
The UAE's legal system is rooted in the Constitution, drawing from both Shariah and civil law. Commercial disputes can be addressed through various channels, with litigation and arbitration being the primary methods.
Litigation is a common recourse for commercial disputes in the UAE. The civil law system, which is prevalent across the country except for certain free zones, emphasizes an inquisitive court approach. Cases are adjudicated based on their individual facts and merits, with proceedings conducted in Arabic by UAE National lawyers. All documents must be legally attested and translated into Arabic.
The UAE's judicial structure, except for Abu Dhabi and Ras Al Khaimah (RAK), is part of the Federal Judicial system. These Emirates have their own independent judicial systems but follow a similar court hierarchy:
Dubai and Abu Dhabi have established their own financial free zones with independent legal systems:
Dubai International Financial Centre (DIFC) operates under a common law framework, with proceedings in English. The DIFC Courts have jurisdiction over local and international cases by mutual consent and can enforce foreign and domestic arbitral awards as per the New York Convention. However, jurisdictional conflicts between DIFC Courts and Dubai Courts have led to the establishment of a Joint Judicial Tribunal to resolve such disputes (Decree Number 19 of 2016).
Abu Dhabi Global Market (ADGM) courts handle matters within the free zone or between registered companies. ADGM operates under a common law system based on English Law Regulations of 2015 and offers digital court services, including a fully digitalized courtroom platform.
Before proceeding to civil courts, commercial disputes must be registered with the Reconciliation and Settlement Committee, established under Federal Law Number 26 of 1999. This Committee provides a platform for amicable settlement, potentially avoiding litigation. Decisions reached here are binding and enforceable.
In Dubai and RAK, the Centre for Amicable Settlement handles certain disputes, including those related to common property and debts exceeding AED 100,000.
The UAE Civil Code sets a general 15-year limitation period for civil claims, with several exceptions for specific disputes outlined in the Commercial Code:
Court proceedings begin with case registration, followed by service of summons and hearings. Interim reliefs, such as summary judgments and preliminary attachment orders, may be granted under certain conditions. Special cases may involve travel bans or seizure of passports.
Experts may be appointed by the courts to provide specialized knowledge on financial or technical matters. The appointment process is governed by Federal Law Number 7 of 2012 and Federal Law Number 10 of 1992 concerning Expert Evidence and the Evidence Law, respectively.
Aggrieved parties can appeal to the Court of Appeal and, subsequently, the Court of Cassation. Local judgments are enforceable after 30 days, while foreign judgments require adherence to specific conditions or bilateral treaties.
ADR methods include arbitration, mediation, and conciliation. The UAE has established various ADR organizations, such as the Dubai International Arbitration Centre and the Abu Dhabi Commercial Conciliation and Arbitration Centre, each with its own rules and regulations.
The primary ADR organizations in the UAE are:
These institutions provide tailored dispute resolution services, ensuring that commercial disputes are handled efficiently and effectively.
In conclusion, the UAE offers a comprehensive legal system for resolving commercial disputes, with a range of options to suit different needs. Understanding this system is essential for navigating the complexities of commercial litigation and arbitration in the region.
What is the full list of fines for money laundering in the UAE? Dr. Hassan Elhais
The UAE Ministry of Economy has announced the list of penalties for violations of the laws relating to money-laundering and terrorism financing.
Can I Appeal Against an Arbitration Award?
Arbitration is best described as a cost-effective alternate dispute resolution process, which assists in smoother business relationships without incurring the rigidity of court proceedings. To address many of the pitfalls of the arbitration process and to bring the UAE arbitration process in tune with the best international standards, the UAE enacted Federal Law No. 6 of 2018 on ‘Arbitration’ and its amendments (“Arbitration Law”).
Commercial leasing and breach of contract punishments
In legal terms, a lease agreement can be defined as ‘a contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment’. A ‘commercial lease agreement’ constitutes a written lease agreement whereby a landlord agrees to lease his commercial property to another person or entity for a given business purpose and specified time period.
