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The United Arab Emirates has become the jurisdiction of choice for business and trade in countries around the world. Undoubtedly, the UAE is a top destination for new businesses, branch openings of foreign offices and the high volume of transactions that take place on a daily basis, but it also means disputes are common in the jurisdiction.
What are the methods of dispute resolution in business transactions in the UAE?
In general, there are two methods of dispute resolution for commercial trade in the UAE.
They are: Litigation and Arbitration.
While the pace of dispute resolution through arbitration is accelerating and may be preferred in very high value disputes of an international nature, it is primarily used by courts to resolve commercial disputes.
Background of the UAE Judicial System
The UAE consists of seven emirates – Abu Dhabi (the city of Abu Dhabi is the federal capital of the UAE), Dubai, Ras Al Khaimah, Ajman, Sharjah, Fujairah and Umm Al Quwain.
The legal structure of the UAE judiciary is divided into two systems: the federal judiciary and the local judiciary. Abu Dhabi, Dubai and Ras Al Khaimah maintain their independent judicial systems at the local/emirate level to deal with matters not assigned to the federal judiciary under the constitution.
Each judicial system has three levels of litigation courts. these are:
court of first instance
Sue in court
The Federal Supreme Court at the federal level and the Supreme Court at the local level.
Pursuant to article 25 of the Code of Civil Procedure (Federal Law No. 11/1992), the court of first instance is the main court of disputes, competent to hear civil, commercial, administrative, labor and personal status disputes. Decisions made by the trial court can be appealed to the competent court of appeal. The decision of the Court of Appeal can be appealed to the Court of Appeal/Supreme Court on specific grounds.
court action
If the dispute is to be resolved by litigation, it must be brought by the claimant.
The first step in this process is to register a claim by filing a statement of claim with supporting documents with the trial court (case management office). The claim should include the name and details of the plaintiff, the details of the defendant, the subject matter and claims, and all relevant information.
Once the defendant is notified, the defendant must submit his memorandum of defense along with supporting documents.
The court will hear the matter later. It may also appoint an expert if the issues involved are technical and require expert advice. Experts will listen to all parties and prepare a report, together with their recommendations and the rationale for their recommendations.
The expert report is not binding on the court.
After the complaint is completed, the court will issue a judgment that can be appealed. Judgments need to be justified and will provide the basis for the reasons for the decision.
Unless otherwise provided by law, the aggrieved party shall appeal to the Court of Appeal within 30 days from the date of the judgment.
in conclusion
Given the growth of business in the UAE, commercial disputes are common and it is crucial to hire a local lawyer to resolve them, especially since the language of the courts is Arabic, so it is invaluable for a local lawyer to guide you through the steps and represent you in court.
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