UAE case law

A murabaha financing is a sale at cost plus agreed profit and cannot be treated as an interest-bearing loan

A validly concluded contract has the force of law between the parties, and the judge must interpret it according to its clear wording without departing from the parties' intention. Interpreting a contract is a legal question the court must decide itself…

Supreme courts may reconsider their own final criminal judgments under the Civil Procedure Law's reconsideration rules

Article 1(5) of the Criminal Procedure Law applies the Civil Procedure Law where the criminal code has no specific provision. Reconsideration (rujuu) of a final judgment under Article 190 of the Civil Procedure Law is a general procedural rule, not an…

An appeal court that refuses a payment order must decide the merits itself instead of remitting the claim

Where a creditor starts by petitioning for a payment order and, on appeal against the order, the appeal court finds that the conditions for issuing it are not met, the court must not stop at refusing the order or declaring the petition inadmissible, and…

Parties cannot agree to litigate before the courts of a different judicial authority; this jurisdiction is public order

Under Article 104 of the Constitution, each emirate's local judicial authority handles all judicial matters not entrusted to the federal judiciary, within the borders of that emirate. Each local judiciary is therefore a judicial authority independent of…

A cheque returned because the account is closed is an execution title, like one returned for lack of funds

Article 667 of the Commercial Transactions Law makes a cheque on which the drawee bank has recorded that there are no funds or insufficient funds an execution title, which the holder may enforce wholly or partly by compulsory means. The Authority held that…

Entities wholly owned by the federal government are outside the Companies Law and litigate only before federal courts

Under Article 4(1)(b) of the Commercial Companies Law, companies wholly owned by the federal or a local government or their institutions, bodies or subsidiaries are excluded from the law, apart from registration, in matters for which their founding…

A dissolved company keeps its legal personality until liquidation ends, and a custodian's appearance cures a standing defect

A company dissolved by judgment is treated as continuing, with its legal personality, for the needs of liquidation until liquidation is complete, so that its claims can be collected, its debts paid and the balance divided among the partners, and to protect…

A bank recovers its agreed interest up to filing and simple interest afterwards, all interest capped at the principal

A court must award the interest that the customer and the bank agreed or applied in their dealings for the period before the claim was filed. For the period after filing, it must award interest at the average rate prevailing in banks during the proceedings…

A claim over an employer's failure to register a worker for pension is a labour dispute needing prior referral

A court must itself determine the correct legal characterisation of a claim from what is actually sought and the legal basis on which it rests, whatever kind of liability or provision the claimant invokes. A former employee's claim for sums arising from…

A nominee Emirati partner's stake is sham, and courts must apply the 2021 Companies Law allowing full foreign ownership

Simulation (a sham arrangement) is established where parties conceal their real dealings and legal positions behind an outward contract made as a front to the public, while a separate writing or agreement governs between them; once proved, the hidden…

An insurance policy condition that defeats cover is void unless printed conspicuously, and courts must rule on that objection

Under Article 1028(1)(c) of the Civil Transactions Law, a printed condition in an insurance policy relating to a circumstance that leads to the avoidance of the contract or the lapse of the insured's right is void unless it is shown conspicuously, set…

A cheque bearing the executory formula can still be contested as a security cheque in a substantive execution dispute

A cheque is a means of payment that carries in itself the presumption of the cause for which it was handed to the payee, but the drawer may rebut that presumption, dispute the debt and prove that he has been discharged in whole or in part. Placing the…

Waiver of an arbitration clause is never presumed and must appear clearly from the contract read as a whole

The trial court interprets contracts free from cassation review only while it stays within what the words can bear and does not depart from their apparent meaning. A waiver of an arbitration clause is not presumed: it must be proved and drawn from the…

Time to challenge an order enforcing an arbitral award runs only from valid notification of the order

Taking procedural steps in the presence of the parties is a fundamental principle of civil procedure and a matter of public order. Time limits for challenging judgments are open until the losing party is notified with certainty, by the ordinary methods and…

Compensation for unlawful dismissal is capped at three months' wage, but a longer contractual notice period binds the employer

Under Article 47(2) of Federal Decree-Law No. 33 of 2021, an employer must pay fair compensation, assessed by the court, where a dismissal is unlawful, taking into account the type of work, the harm suffered and the length of service, but never more than…

Interim ADGM Courts orders in an administration do not conflict with a final Dubai judgment against the same company

The Federal Supreme Court resolves conflicts of jurisdiction between the federal judiciary and a local judicial authority, or between judicial authorities of different emirates, where each claims or declines jurisdiction or each issues a final judgment…

Courts must weigh the Covid-19 pandemic as an exceptional event when assessing a contractor's liability for delay

Where failure to perform a contractual obligation results from an exceptional or unforeseeable event beyond the parties' control, whose consequences could not be guarded against, liability for non-performance is reduced or, at the least, the event must be…

An assignment of a receivable binds the debtor once it knows of it; the debtor's consent is not required

Under Articles 1109 and 1110 of the Civil Transactions Law, as the Federal Supreme Court has consistently applied them, an assignment (hawala) is a consensual contract between the assignor, who owes the assignee, and the assignee. Where it transfers a…

Signing a company's security documents as authorised signatory does not make the signatory a guarantor of its debts

Joint liability between debtors arises only by agreement or by law, although the agreement may be implied from the circumstances (Article 450 of the Civil Transactions Law and Article 72 of the Commercial Transactions Law). A guarantee (kafala) is formed…

An appeal fee paid within the thirty-day appeal period is timely; the three-day fee rule governs only new claims

Registering a claim or an appeal involves three steps: filing the statement, paying the fee and entry in the register. A first-instance claim takes effect from filing if the fee is paid within three working days. That three-day rule does not govern…

A buyer's claim to validate a Sharjah apartment sale cannot be dismissed without examining the foreign-ownership rules

An action for validity and enforcement of a contract is a merits action: the court examines whether the contract was validly formed and enforceable, including the parties' capacity and any nullity of public order, so that its judgment can stand in place of…

Contradictory judgments of the same emirate's courts are not a conflict for the Federal Supreme Court to resolve

The Federal Supreme Court's conflict jurisdiction covers clashes between the federal judiciary and local judicial authorities, or between the judicial authorities of different emirates, where each claims or declines jurisdiction or each issues a judgment…

Judgments differing in parties, subject and cause do not conflict, as with a bank suing as endorsee of cheques

A conflict between two final judgments, for the Federal Supreme Court's conflict jurisdiction, exists only where the later judgment contradicts an earlier one that has become res judicata on an issue between the same parties, decided in its operative part…

Claims against a contractor or engineer for building defects are barred three years after the defect is discovered

Under Article 883 of the Civil Transactions Law, a claim under the guarantee owed by the contractor or the engineer for the collapse of a building or defects in it cannot be heard after three years from the collapse or the discovery of the defect.…

A customer's deposit at a bank's foreign branch cannot be set off against facility debts in the UAE without agreement

Compulsory set-off under Article 370 of the Civil Transactions Law requires each party to be both creditor and debtor of the other, with debts of the same kind, description, maturity and strength, and the set-off must not prejudice third parties; failing…

A challenge to an insurance committee decision belongs to the court where the harm occurred, here Dubai

Each emirate that keeps its own judiciary forms a judicial authority independent of the federal courts and of the other emirates. The distribution of jurisdiction between them is public order: courts must keep within it, parties cannot vary it, and a…

A bounced cheque makes its signatory and the account holder jointly liable without proof of why it was issued

A cheque is in principle an instrument of payment and, at the least, a debt instrument entitling the holder to collect its value from the drawee bank. If it is returned unpaid, the signatory and the person from whose account it was drawn remain jointly…

Where final judgments of the Dubai and Sharjah courts contradict, the Federal Supreme Court decides which one is enforced

A conflict of jurisdiction under Articles 33(9)-(10) and 60 of the 1973 law on the Federal Supreme Court includes contradictory final judgments given by courts of different judicial systems; the aim is to settle disputes over enforcing such judgments. A…

Partners in a bankrupt free-zone company are not traders and cannot be declared bankrupt with it

Under Articles 4(2) and 142 of the Bankruptcy Law (Federal Decree-Law No. 9 of 2016), bankruptcy applies only to traders in the legal sense, persons who carry on commercial business in their own name as a profession, and to partners who are jointly and…

Silence about a debt is misrepresentation only if meant to mislead, and rescission also needs proven gross lesion

Under Articles 185 to 187 of the Civil Transactions Law, misrepresentation (taghrir) is deceiving the other party by fraudulent words or acts, and deliberate silence about a fact counts if the deceived party would not otherwise have contracted; a contract…

A bank that discussed a copy of its deposit certificate cannot later deny it and must account for the deposit

Under Article 18 of the Evidence Law (Federal Law No. 10 of 1992), a party may ask the court to order its opponent to produce a document in its possession that is common to both and records their mutual rights and obligations. A party who has discussed the…

A telecom company is liable for its employee's illegal SIM swap only if the swap caused the fraud loss

Tort liability requires that the harmful act be the direct or effective cause of the loss claimed. Identifying the fault and assessing causation are for the trial court, but it must give sound reasons showing beyond doubt that the loss was the inevitable…

Those who act in the UAE for an unlicensed foreign company are personally and jointly liable for its dealings

Under Articles 313 to 316 of the Commercial Companies Law then applicable (Federal Law No. 8 of 1984), a company incorporated abroad could carry on business in the UAE, or open an office or branch, only after obtaining a licence from the Ministry with the…

Service by newspaper is void if electronic service on the defendant's officially recorded phone numbers was not tried first

Under Article 6(1) and (3) of Cabinet Resolution No. 57 of 2018 (the implementing regulation of the Civil Procedure Law then in force), a defendant is served by recorded calls, text messages, smart applications, email, fax or other modern means, or…

An employer's request to set off a loan against end-of-service gratuity must be made at first instance

A request that the court set off a sum the defendant claims from the plaintiff, such as an employer's demand to deduct a loan from the employee's end-of-service gratuity, is an incidental claim and not a defence on the merits, because judicial set-off…

An arbitral award can be attacked only by an annulment action, and a cassation appeal must target the resulting judgment

Article 53 of the Federal Arbitration Law (Federal Law No. 6 of 2018) lays down the only way to object to an arbitral award: an action for annulment brought directly before the court, or raised while an application to confirm the award is being heard, on…

A debtor's own bankruptcy petition must include the statutory documents, or the court must justify accepting it

Under Article 73 of the Bankruptcy Law (Federal Decree-Law No. 9 of 2016), a debtor applying to open bankruptcy proceedings must state the reasons and attach the listed documents, including a memorandum on its economic and financial position, assets and…

A conflict-of-jurisdiction claim is premature while the Abu Dhabi and Dubai courts have not yet ruled on jurisdiction

Under Articles 33(9)-(10) and 60 of Federal Law No. 10 of 1973 on the Federal Supreme Court, the Court alone resolves conflicts of jurisdiction between the federal courts and the courts of an emirate, or between the courts of different emirates. A conflict…

A manager whose company took off-plan payments before it was licensed as a developer is jointly liable with it

A company that has been dissolved keeps its legal personality for the needs of its liquidation until the liquidation ends, so claims over its past dealings can still be brought, and its manager can be sued personally for acts before the liquidation. A…

A defendant that pleads on the merits before invoking the arbitration clause loses the right to rely on it

Under Article 8(1) of the Federal Arbitration Law (Federal Law No. 6 of 2018), a court seised of a dispute covered by an arbitration agreement must declare the claim inadmissible if the defendant so pleads before making any request or defence on the…

Claims by or against a federal authority belong to the federal courts, not to an emirate's local courts

Under Article 102 of the Constitution, civil, commercial and administrative disputes between the Federation and individuals, whether the Federation is claimant or defendant, fall within the jurisdiction of the federal courts to the exclusion of any other.…

A murabaha acceleration clause makes the whole unpaid balance due on default, and courts, not experts, interpret it

The terms of a contract govern the parties' obligations and how they are to be performed; a valid contract is the law of the parties, which neither party nor the judge may alter. Interpreting contracts is a question of law for the trial court, which may…

Interest on bank facilities runs at the agreed rate during the term and as simple interest after default

According to the Federal Supreme Court's settled case law, interest on bank facilities, whether loans or letters of guarantee, is charged at the agreed rate during the term of the facility; once the term ends and the debtor is late, delay interest is…

A sale of a business is void unless notarised and entered in the commercial register

A sale of a business (commercial store) is a consensual contract that takes effect between the parties once validly made, but under Articles 42 and 44 of the Commercial Transactions Law (Federal Law No. 18 of 1993) it must also be notarised or attested…

The first trader to register a trade name can stop a later, confusingly similar name in the same trade

Ownership of a trade name, and the legal protection attached to it, is acquired by entry in the commercial register (Articles 59 and 68 of the Commercial Transactions Law, Federal Law No. 18 of 1993, and Article 3 of Federal Law No. 6 of 1975 on the…

A bank that let unauthorised partners move a company's money is liable in contract alongside the wrongdoers

Where the injured party and the person responsible are bound by a contract, the court may not apply the rules of tort liability unless the harm amounts to a crime, fraud or gross fault. A bank's liability to its customer for allowing unauthorised persons…

An execution judge's order enforcing a foreign arbitral award could be appealed directly to the Court of Appeal

Under Article 72(2)(a) of Cabinet Resolution No. 57 of 2018 (the implementing regulation of the Civil Procedure Law then in force), an execution judge's decision on whether he has jurisdiction to enforce an execution title may be appealed directly to the…

A court may expel a partner at the majority's request for serious reasons, valuing his share at the filing date

Where the special law is silent, the general law applies. The Commercial Companies Law (Federal Law No. 2 of 2015) said nothing about a majority of partners asking the court to expel a partner, so the Court applied Article 677 of the Civil Transactions…

An employer's admission that a bonus was promised on conditions cannot be split to enforce the promise alone

An admission, judicial or not, is a person's acknowledgment of a right against him that relieves the other party of proving it; it binds only if it establishes the right with certainty and the person making it understood and intended its effect. A…

Laws changing court jurisdiction do not apply to cases whose first-instance pleadings closed before they took effect

Procedural laws apply immediately to pending cases, but provisions that amend jurisdiction, whether by subject-matter, type, value or territory and whether in civil or criminal procedural legislation, do not apply where they come into force after the close…

A sale of a business binds the parties once agreed; registration governs only when ownership passes

A business (محل تجاري) is the set of tangible and intangible assets used for a commercial activity, physical or virtual (Article 36 of the 2022 Commercial Transactions Law). Its sale is a consensual contract formed by offer and acceptance, which obliges…

Since the 2025 amendment, an appeal statement must set out detailed grounds when filed, or the appeal is inadmissible

Article 164 of the Civil Procedure Code, as replaced by Federal Decree-Law No. 22 of 2025, removed the former paragraph 3 that allowed an appellant to file the grounds of appeal up to the first hearing. Every statement of appeal, of whatever kind, must now…

Dubai courts cannot hear a standalone action to annul a UAE Sports Arbitration Centre award; objections go to enforcement

Under Federal Law No. 16 of 2016 establishing the UAE Sports Arbitration Centre and the Centre's Procedural Rules (second edition, in force from 25 October 2023), awards, decisions and orders of the Centre in sports disputes are final, carry res judicata…

A creditor's claim against a garnishee who fails to declare is a merits case, not one for the execution judge

Under Articles 255, 256 and 259 of the Civil Procedure Code, a garnishee that neither deposits what it holds nor declares, within seven days of service of the attachment, what it owes the debtor, or that declares insufficiently or untruthfully or hides…

Islamic financial institutions cannot recover late-payment interest, even as compensation, on Sharia-governed transactions

Under Articles 468, 472, 473 and 474 of the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), in force from 2 January 2023, an Islamic financial institution, meaning one whose constitution says it operates under Sharia or which operates…

An LLC cannot be annulled because its Emirati partner was nominal; it converts into a company of the real partners

Some Dubai judgments had held that proof that the real partners differed from those in the memorandum of association meant an LLC lacked its essential elements and was absolutely void, leading to dissolution and liquidation. The General Assembly held…

Personal status courts hear only spouses' claims over the marital home; other money disputes go to ordinary courts

Article 51 of Federal Decree-Law No. 41 of 2024 on Personal Status gives each spouse a separate estate and allows a spouse who helped develop the other's assets or build a home 'or the like' to claim his or her share, during the marriage, after separation,…

Between LLC partners, a sham shareholding must be proved in writing, and profits are due only once distributed

Between partners, none may prove anything contradicting or going beyond the memorandum of association except in writing, so a partner cannot prove without written evidence that another partner's recorded holding is sham; this rule is of public policy and…

Reconsideration under Article 190 is available against Cassation rulings on remand points until the remand court decides

Article 190 of the Civil Procedure Code is an exception to res judicata that lets the Court of Cassation revoke its own final judgments or chamber decisions in limited cases. When it quashes and remits, the remand court is bound by the points of law…

Bankruptcy petitions belong to the court of the debtor's place of business, and jurisdiction rulings can reach cassation

Article 265(2) of the 2023 Bankruptcy Law makes final the Court of Appeal's judgments on challenges to decisions of the bankruptcy court; as an exception it is read narrowly and covers only judgments on the bankruptcy procedure itself, so judgments on…

A creditor can set aside an insolvent debtor's transfers within three years of learning why they harm it

All of a debtor's assets secure his debts. A creditor may have a debtor's disposal declared ineffective against it (Articles 391, 396 and 397 of the Civil Transactions Law) if its right arose before the disposal and is due and undisputed; what matters is…

On termination of a completed-unit sale, the contractual late-payment penalty falls away and damages follow general rules

Dubai Law No. 13 of 2008 applies only to units still under construction; once a unit exists or is registered in the Real Property Register under Law No. 7 of 2006, that Law and its Article 11 procedure no longer apply, even if the contract was made…

An employer enforcing a non-compete clause must prove actual loss; a breach alone earns no compensation

Under Article 10 of the Labour Relations Law, an employee who breaches a post-employment undertaking not to compete is liable to compensate the employer for the resulting damage. The liability is contractual: breach of the undertaking is not enough, the…

The 30-day limit for annulling an award runs only from the tribunal's notification of it to that party

Article 54(2) of the Federal Arbitration Law bars an annulment action brought more than 30 days after the award is notified to the party seeking annulment, and Article 44 requires the tribunal to notify each party by delivering a signed original or copy…

A claim that the Emirati partner was nominal fails where the memorandum and audited accounts show its capital was paid

Sham (صورية) means that the parties agreed on an apparent transaction that is not real and conceals their true relationship; the sham act has no existence in their intention, and the hidden agreement is the one in force between them. Whether a transaction…

A partner's work cannot pay for a share in an LLC, so a share transfer made for services alone is void

Under Article 17 of the Commercial Companies Law (Federal Decree-Law No. 32 of 2021, corresponding to Article 17 of Federal Law No. 2 of 2015), the capital of a limited liability company consists of cash or in-kind contributions of appraised value; a…

A developer that sues instead of terminating lets the off-plan buyer avoid termination by paying before final judgment

Once the Land Department has issued its document confirming the procedure under Article 11 of Dubai Law No. 13 of 2008 (as amended by Law No. 19 of 2020), a developer may terminate an off-plan sale on its own without going to court, but it may instead sue.…

A 'pension' paid with salary during employment cannot replace a free-zone employee's end-of-service gratuity

Under Article 51 of the Labour Relations Law (Federal Decree-Law No. 33 of 2021), a foreign full-time worker with at least one year of continuous service is entitled to an end-of-service gratuity when his service ends. Rights that arise only when the…

An employer's claim to recover a personal loan to an employee is not subject to the labour-law one-year bar

Laws do not apply retroactively; a legal relationship and its effects are governed by the law in force when they arose. Under Article 6 of the former Labour Relations Law (Federal Law No. 8 of 1980), which governed a cash advance made and fully due before…

An employer that stops a resigning employee from working her notice period must pay her notice wages

A worker is entitled to the agreed wage if he performs the work or makes himself available for it, even if no work is assigned (Article 912 of the Civil Transactions Law). Under Article 43 of the Labour Relations Law either party may end the contract for a…

A signed off-plan reservation form is a binding sale, and without interim registration the developer must refund

A sale is concluded when offer and acceptance meet on the property and the price; no written form is required, and agreement may be shown by conduct or by exchanged correspondence. An off-plan sale is a complete sale subject to special rules, under which a…

The agreed legal seat, not the institution or its rules, decides which court hears an action to annul an award

The seat (legal place) of arbitration is the jurisdiction in which the arbitration takes place, and it determines the law governing the procedure, the court supervising the arbitration and hearing annulment actions, and whether the award is domestic or…

Claims over a property's missing area are price-reduction claims, barred one year after handover

A court must give a claim its correct legal characterisation according to what is actually sought and its legal basis, whatever label the claimant uses, and limitation depends on that characterisation. Under Article 524 of the Civil Transactions Law, no…

A developer that never registered an off-plan sale in the interim register must refund the price and pay damages

Under Articles 3 and 5 of Dubai Law No. 13 of 2008, every disposition of an off-plan unit (one that does not yet exist, is under construction or is incomplete) must be entered in the interim real property register, whether the unit was sold before or after…

An optional arbitration clause does not oust the courts, and the new five-year limit for traders runs from 2023

An agreement to arbitrate is not presumed: its wording must show that the parties made arbitration the only way to resolve their disputes. A clause that sits alongside the courts' jurisdiction or offers a choice between them, such as one allowing either…

Group companies behind one property project are jointly liable, and VAT charged on an undelivered hotel unit is refundable

In real estate investment several companies with separate legal personality and assets may share a single project and so be jointly liable for its obligations; whether they do is a question of fact. Money paid for a debt whose cause never arose, or later…

An employee suspended during a criminal case and later acquitted recovers full wages; limitation waits for the verdict

Under Article 40(2) of the Labour Relations Law an employer may suspend a worker accused of certain offences, without pay, until a final decision; if the worker is not sent for trial, is acquitted for want of an offence, or the investigation is closed for…

Once bankruptcy proceedings open, the bankruptcy court alone decides disputes over the debtor company's debts

Under Federal Decree-Law No. 51 of 2023 on Financial Reorganisation and Bankruptcy, the specialised bankruptcy court has exclusive jurisdiction over all requests and proceedings in bankruptcy cases, including disputes over a company's debts, from the…

Failure to involve the Public Prosecution where its intervention is mandatory makes a civil judgment absolutely void

Under Articles 63 to 72 of the Civil Procedure Code, the Public Prosecution must intervene (except in urgent matters) in cases it may itself bring, in cases concerning persons lacking or with limited capacity and absent or missing persons, in cases on…

A mortgage securing present and future facilities survives repayment of one facility, and a guarantor-mortgagor can be sued first

Under Dubai Law No. 14 of 2008 on mortgages, a mortgage gives the creditor a real right over the property to be paid from its price ahead of ordinary and later creditors. Applying to sell the mortgaged property is only an option: the creditor may instead…

Any LLC partner may seek the manager's removal for serious cause, but resolutions can be annulled only on three grounds

Any partner of a limited liability company, whatever the size of its holding, may ask the court to remove the manager if there are serious reasons, such as mismanagement, illness or inability to work, or disloyal acts against the company and the partners,…

A sale contract e-signed through the Land Department's system binds the buyer and defeats a bare forgery claim

Under Articles 54 to 58 of the Evidence Law (Federal Decree-Law No. 35 of 2022), electronic evidence, including electronic records, signatures and correspondence such as email, has the same effect as written evidence; formal electronic evidence, including…

An arbitration clause binds only its parties, and enforcing a cheque in Dubai courts can waive it

A party who relies on an arbitration agreement must raise it before making any request or defence on the merits (Article 8(1) of the Federal Arbitration Law). The right to arbitrate may be waived expressly or impliedly, but implied waiver requires conduct…

Late deposit of instalments into escrow does not entitle an off-plan buyer to terminate before completion is due

An off-plan buyer cannot terminate merely because the developer paid his instalments into the project escrow account late. Dubai Law No. 8 of 2007 on real estate development escrow accounts contains no provision allowing a buyer to terminate where the…

An owner who signs facility terms for his free-zone company is not a guarantor unless he expressly guarantees its debts

A limited liability company formed in a Dubai free zone has, from its formation and registration, a legal personality and assets separate from those of its partners, who are liable for its debts only up to their shares. A person who signs a contract as the…

A party may resist enforcement of an award on annulment grounds even after the time to sue for annulment has passed

Under Articles 55 and 57 of the Federal Arbitration Law, an award may be challenged either by an action for annulment or during the application to confirm and enforce it. A party who has not sued for annulment may still object to the enforcement order by a…

A subrogated insurer's recovery claim against a negligent contractor and its insurer runs from the date it paid

Under Article 1036(1) of the Civil Transactions Law, claims arising from an insurance contract cannot be heard after three years from the event giving rise to the claim, which is not necessarily the occurrence of the insured risk; for an insurer that has…

A cheque given as security can be enforced only for the part of the secured debt actually unpaid

A cheque is presumed to be an instrument of payment with a valid underlying cause, but the drawer may prove that it was given for another purpose, such as security. If it was given as security, the obligation to pay it is subject to a suspensive condition,…

Facilities run through a current account fall due on closure, and refinancing does not end guarantees reaffirmed for it

Where credit facilities are linked to a current account, the rights and obligations they create become entries in the account that set off against each other, and the final balance on closing is a debt immediately due to the bank, whatever the original…

Directors of a bankrupt company are liable for its debts only on proof of fault under the law applicable then

Where a bankrupt company's assets do not cover at least 20 per cent of its debts, the court may order its directors and managers, jointly or not, to pay all or part of the debts, but only if their liability for the company's losses is proved under the…

In medical negligence, limitation ran from the committee's final report, and damages must be itemised head by head

Under Federal Decree-Law No. 4 of 2016 on medical liability, only the medical liability committees may give an opinion on whether a medical error occurred, its cause, the resulting harm and causation; the higher committee's report is final, and a damages…

A creditor whose payment order and asset freeze are later overturned is not liable without abuse of right

Under Articles 104 and 106 of the Civil Transactions Law, no one is liable for harm resulting from the lawful exercise of a right, including the right to go to court. The exercise of a right is unlawful, and gives rise to liability, if it is intended to…

A lawyer with a written fee agreement sues for fees by ordinary action before the competent court of first instance

Under Article 52 of Federal Decree-Law No. 34 of 2022 regulating the advocacy and legal consultancy professions, a lawyer is paid according to the written agreement with the client, and a claim for agreed fees is brought by ordinary action before the court…

A co-owner may force a sale of the whole property only if co-owners living there are not harmed

Under Article 1166 of the Civil Transactions Law (as replaced by Federal Decree-Law No. 30 of 2020), where co-owned real property cannot be divided in kind, or division would cause harm or a serious loss of value, any co-owner may sell his share to another…

A mortgaged property's auction award can be appealed only for defects in the bidding, its form or a missed stay

Under Article 300(1) of the Civil Procedure Code, a judgment awarding a property at auction may be appealed only for a defect in the bidding procedure or in the form of the judgment, or because it was issued without a stay that was legally required.…

A developer in breach of its own obligations cannot use the Land Department procedure to cancel an off-plan sale

Article 11 of Dubai Law No. 13 of 2008 lets a developer terminate an off-plan sale and retain no more than a set percentage of the price, according to the stage of completion, after notifying the Land Department, which gives the buyer 30 days to perform.…

Opening bankruptcy of an LLC does not extend to its partners, and the bankruptcy court cannot rule on managers' personal liability

A creditor of a limited liability company may seek its bankruptcy if it has stopped paying a due commercial debt because its finances are disturbed. Refusal to pay without a legitimate reason is evidence against the debtor, but there is no cessation if the…

A developer's mortgage of a project has no effect if the lender did not pay the loan into escrow

Under Article 13 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts, a finance institution lending to a developer against a mortgage of the project must deposit the loan amount in the project's escrow account. The General Assembly held…

Funds in a Dubai project escrow account cannot be attached by any creditor of the developer

Article 9 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts dedicates each project's escrow account exclusively to building the project and bars attachment of its funds for the developer's creditors. The bar is absolute: no…

A claim that an Emirati partner's 51 per cent holding was nominal cannot be sent to arbitration

Arbitration may not be agreed on matters that cannot be the subject of compromise (Article 4(2) of the Federal Arbitration Law). A claim that a UAE national's 51 per cent holding in a company was nominal, brought on the footing of the former rule requiring…

Accepting a right-of-first-refusal offer at a different price is a counter-offer, not an acceptance

A contract is formed only when an acceptance matches the offer (Article 125 of the Civil Transactions Law). An offer is a definite expression of the will to conclude a particular contract; an acceptance that modifies, adds to or reduces it is a rejection…

Removing an LLC manager from office does not dispose of a separate claim to expel him as a partner

The Court distinguished two remedies against the managing partner of a limited liability company. Removal (عزل) only relieves the manager of management, and he remains a partner. Expulsion (فصل وإخراج) ends his membership of the company and requires…

A properly filed and served claim interrupts limitation even if it is later dismissed or declared inadmissible

Under Article 484 of the Civil Transactions Law the limitation period is interrupted by a judicial claim, or any judicial step by which the creditor asserts its right against the debtor, before the courts or an arbitral tribunal. A statement of claim filed…

Guarantors are released if the creditor does not claim within six months of maturity, unless they clearly agreed otherwise

Under Article 1092 of the Civil Transactions Law, once a guaranteed debt falls due the creditor must claim it within six months, failing which the guarantor is released; this applies to commercial guarantees. The rule is not of public policy, so a…

Courts must examine evidence that an LLC manager acted fraudulently and that two companies operated as one

A managing partner of a limited liability company is not liable in his own assets for the company's debts unless he commits a fault. If he breaches a management duty, the law or the company's constitution, he is liable for his personal faults and for acts…

Seller owes no double deposit when the master developer's refusal of a no-objection certificate blocks the transfer

Payment of a deposit (earnest money) shows that the parties intended the sale to be final; unless the agreement or custom provides otherwise, a recipient who withdraws must return it doubled and a payer who withdraws forfeits it. A suspensive condition…

A debtor may not be detained unless the creditor proves solvency or a listed exception applies

Under Article 319 of the Civil Procedure Code (outside the public-funds recovery regime), an execution judge may order the detention of a debtor able to pay who refuses to satisfy an executory instrument. Detention is not allowed unless the creditor proves…

When a developer's instalment sale is terminated, it refunds the instalments less a fair rent for the buyer's use

Where a transaction is commercial for one party and civil for the other, the Commercial Transactions Law governs both parties' obligations unless the law or the parties provide otherwise. Under its instalment-sale rule, if the buyer fails to pay an…

Bank loans earn compound interest until the account is closed, and suing to sell the mortgaged home does not close it

Loans granted by banks are commercial transactions whatever the borrower's status or purpose, and produce interest automatically during the loan, at the agreed rate or otherwise at the market rate, compounded unless agreed otherwise, even if interest…

Service-charge claims under Dubai's jointly owned property law belong exclusively to the Rental Disputes Centre, including older debts

Article 42 of Dubai Law No. 6 of 2019 on jointly owned real property, in force from 9 November 2019, gives the Rental Disputes Settlement Centre exclusive jurisdiction over all disputes concerning the rights and obligations under that Law, and Article…

Personal accident cover for a vehicle's driver is capped at the endorsement sum, with blood money counted within it

Under the unified motor insurance policy (Insurance Authority Board Decision No. 25 of 2016), compulsory cover obliges the insurer to pay injured third parties whatever the insured or driver is legally liable for, and policy limits cannot be invoked…

A developer may terminate an off-plan sale only through the Land Department procedure, which buyers can contest in court

Under Article 11 of Dubai Law No. 13 of 2008, as replaced by Dubai Law No. 19 of 2020, a developer alleging an off-plan buyer's breach must follow a public-order procedure: notify the Land Department, which verifies the breach, gives the buyer 30 days'…

A good-faith buyer is protected against the true owner when the seller's title is later invalidated

A disposition made by an owner whose own transaction or title is later invalidated, in favour of a third party acting in good faith, is effective against the true right-holder, in actions of unenforceability and in title claims alike, provided the third…

Dubai courts must stay a claim to receivables of a company under an ADGM administration order barring proceedings

A final order of the ADGM Courts placing a company in administration, which forbids starting or continuing legal proceedings against the company or its property without the administrators' consent or the ADGM Courts' permission, has res judicata effect…

The Attorney General's one-year period to appeal in the interest of the law is suspended while a party's appeal is pending

Under Article 176 of the Civil Procedure Code, the Attorney General may challenge in cassation, within one year of its issue, a final judgment that breaches the law where the parties could not challenge it, missed the deadline, waived the challenge, or had…

Appeal judgments in substantive enforcement disputes, unlike those on pure enforcement steps, can be challenged in cassation

The Civil Procedure Code distinguishes temporary enforcement disputes, which seek only a stay or continuation of enforcement without touching the right and are decided by the execution judge subject to a final grievance (Articles 209 and 239), from…

An appeal court that overturns a judgment for applying the wrong law must decide the merits itself

Under Article 168 of the Civil Procedure Code, where the court of first instance has decided the merits, a Court of Appeal that sets the judgment aside must go on to decide the dispute; it remits the case only where the first-instance court declined…

A court may rely on an expert report filed in another case, even one before a court lacking jurisdiction

An expert report prepared in another case, even one heard by a court without territorial jurisdiction or between different parties on a different subject, may be relied on by the trial court once the report or a copy has been filed in the case. It then…

A debtor company's trade licences and other intangible business assets can be attached by its creditors

All of a debtor's assets secure its debts (Article 391 of the Civil Transactions Law), and a creditor may attach the debtor's movable and immovable property except what the law exempts (Articles 242 and 247 of the Civil Procedure Code). Attachable property…

Challenges to insurance-committee decisions issued before 1 December 2023 go to first instance, later ones to appeal

Federal Decree-Law No. 48 of 2023 on Regulating Insurance Activities, in force from 1 December 2023, sends challenges against decisions of the insurance dispute settlement committees to the Court of Appeal within 30 days and bars insurers from challenging…

An LLC may increase its capital by a three-quarters vote; dissenting partners can challenge only on specific grounds

Under Articles 96 and 101 of the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), an LLC may increase its capital with the approval of partners holding at least three quarters of the shares represented at a validly convened general meeting;…

Proceedings against a party who had already died are cured by joining the heirs at the same level

In principle proceedings can be brought only against living persons, and a claim or appeal against someone who died before it was filed is non-existent. But the rule exists to protect the right of defence, and nullity is not declared where the purpose of a…

Limitation for damages arising from a crime is suspended while criminal proceedings remain possible or pending

Under Article 298 of the Civil Transactions Law a claim for damages for a harmful act is barred three years after the victim actually learned of the harm and of the person responsible, and in any case after fifteen years. Where the act is also a crime, the…

An appeal court that finds the claim was not properly served must still decide the merits itself

Under the 2022 Civil Procedure Code a claim is brought when the case management office registers the statement of claim and the fee is paid (Articles 44 and 47); service on the defendant is a separate, later step. A defect in service therefore does not…

When the addressee's home is closed, a process server may serve by posting directly on the court website

Under Article 9(1)(b) of the Civil Procedure Code, if the process server does not find the addressee at his domicile or residence, he serves any spouse, relative, in-law or employee living with him; if they refuse, nobody who may lawfully receive it is…

Workers with labour claims of up to AED 100,000 pay no court fees or cassation deposit at any stage

Reading Articles 181(2) and 188 of the Civil Procedure Code with Article 9(1) of Dubai Law No. 21 of 2015 on Judicial Fees in the Dubai Courts, claims, appeals, cassation appeals and petitions for reconsideration brought by workers, or those entitled…

One address inquiry before service by publication can suffice for every stage of the same litigation

Under Article 9(3) of the Civil Procedure Code, where a person cannot be served by the ordinary methods, the case management office or competent judge has an inquiry made with at least one relevant authority, and the person is then served by posting on the…

Actions to record the state of facts belong to the urgent-matters judge unless joined to a pending merits case

An action to record the state of facts (دعوى إثبات الحالة) is a purely precautionary procedural action, brought at the claimant's expense, to preserve proof of facts likely to be disputed; it does not decide the right itself. Under Article 108 of the…

Closure of a DIAC arbitration file for unpaid costs does not extinguish the arbitration clause

The General Assembly unanimously abandoned the earlier view that closure of a Dubai International Arbitration Centre case for unpaid costs makes the arbitration clause lapse. Under Federal Law No. 6 of 2018 on Arbitration, proceedings end with an award…

A claim fee paid late but before the first hearing makes the claim effective from the date of payment

Under Articles 44, 45 and 47 of the Civil Procedure Code a claim is registered and effective from the filing of the statement of claim only if the fee is paid within three working days of the payment notice; otherwise the supervising judge may declare the…

A grievance against a payment order must be heard by a judge other than the one who issued it

Under Article 147(1) of the Civil Procedure Code, a party may file a grievance against a payment order whose value is within the final jurisdiction of the first-instance court before 'the competent payment-order judge'. The judge who issued the order has…

When a claim or memorandum is filed electronically, only its electronic text is before the court

Articles 44(1) and 48(2) of the Civil Procedure Code require statements of claim and defence memoranda to be filed electronically or on paper according to the system in use at the court, and the Dubai courts use electronic filing. Where a statement of…

Joining the driver and vehicle owner does not oust the insurance committee's jurisdiction over the claim against the insurer

Under Article 4 of Insurance Authority Board Chairman's Decision No. 33 of 2019, insurance dispute committees hear complaints by insured persons, beneficiaries or injured parties against the insurer only. A claimant may sue the insurer together with the…

A request to sell the whole co-owned property must be made in the claim, not to the enforcement judge

Article 1166(2) of the Civil Transactions Law, as amended, allows a co-owner who cannot sell his share to ask for the whole property to be sold. Such requests must be made in a substantive action, where they are granted, refused or declared inadmissible.…

An unlicensed real estate broker cannot recover commission, compensation or expenses under a void brokerage agreement

Dubai legislation (Articles 3 and 24 of Local Order No. 32 of 1987 regulating real estate brokerage and Articles 3 and 21 of Regulation No. 85 of 2006 on the Register of Real Estate Brokers) prohibits any natural or legal person from brokering the sale,…

A debtor's only home cannot be sold in execution on the ground that it exceeds his housing needs

Under Article 106(2) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), the house used as a residence by the debtor and the dependants living with him may not be attached, unless it is mortgaged and the debt arises from its price. The…

Off-plan registration rules do not void a sale where the property was completed before suit or later registered

Article 3 of Dubai Law No. 13 of 2008 voids sales of off-plan units not entered in the interim real property register. The General Assembly held that the Law covers units that are still under construction and exist only on plan. Where a unit not previously…

The payment-order procedure is mandatory for qualifying debts, but an ordinary claim is admissible once a serious dispute arises

Under Article 62 of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018, as amended by Cabinet Resolution No. 33 of 2020), a creditor must use the payment-order procedure, not an ordinary action, where the debt is proved in writing by a…

Where no rate is agreed, Dubai courts award legal and delay interest at 5 per cent a year

Where the parties have not agreed on an interest rate, interest on an adjudged debt, whether 'legal' interest or delay (late-payment) interest, is calculated at 5 per cent a year until full payment. The Dubai courts had applied 9 per cent a year as a…

A contract's clear terms bind the parties; a buyer who accepted unfinished infrastructure cannot rescind because of it

The General Assembly restated that a contract is the law of the parties: neither may revoke, amend or rescind it except by agreement or on grounds the law allows, and clear terms may not be departed from by interpretation, since they express the parties'…

Appeal judgments on enforcing foreign judgments can go to cassation, and default judgments need proof of proper service

Article 173(3) of the former Civil Procedure Law made appeal judgments 'in execution proceedings' final, but that covers only disputes about pure enforcement steps. A ruling on whether a foreign judgment qualifies for enforcement under Article 85 of the…

An entry in Dubai's interim real property register is an official record binding on all unless forged

Under Dubai Law No. 13 of 2008 every disposition of an off-plan unit, whether made before or after the Law, must be entered in the interim real property register kept by the Land Department; the developer must apply for it (Articles 2, 5 and 8). Under the…

A payment order requires a valid prior demand on each debtor, and one co-debtor's personal defect does not free the others

Under Article 63(1) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), a creditor must first serve on the debtor a demand to pay within at least five days before applying for a payment order. The demand is an essential step: if its…

Dubai's 2020 off-plan termination rules apply to earlier contracts, and courts may set the developer's retention below the maximum

Dubai Law No. 19 of 2020, which replaced Article 11 of Law No. 13 of 2008 on the Interim Real Property Register, applies retroactively to off-plan contracts governed by the 2008 Law, including terminations already made (except those annulled by a final…

Unregistered sales of land granted to UAE nationals in Dubai give the buyer no title and no limitation defence

Under the Ruler of Dubai's instructions of 2 September 1994 (published on 18 November 1994), dispositions of land granted by the government to UAE nationals without the Ruler's permission are void as a matter of public order. Earlier sales are not void, as…

A buyer under an unregistered contract may claim attached property if he shows evidence of ownership or possession

Although ownership of real property passes, between the parties and against others, only on registration (Article 1277 of the Civil Transactions Law), Article 166(1) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018) allows a third party…

A company's manager can be detained or banned from travel if his abnormal conduct frustrates execution

Under Article 322 of the Civil Procedure Law, where the judgment debtor is a private legal person the execution judge may order the detention of, or a travel ban against, its legal representative or another person, even without an execution title against…

When ADGM Courts, rather than Abu Dhabi courts, hear contract, letter-of-guarantee and branch disputes

Under Article 13(7) of the ADGM Founding Law, ADGM Courts have exclusive jurisdiction over civil and commercial claims to which ADGM or its authorities or establishments are party, and over claims arising from a contract concluded, completed or performed…

A cassation appeal is admissible if fees and deposit are paid within the appeal period, even after three working days

Articles 179 and 181 of the Civil Procedure Law require the appellant in cassation to pay the court fee in full and lodge the security deposit within three working days of notice of the fee assessment. A late payment does not make the appeal inadmissible…

No cassation appeal lies against appellate rulings on orders enforcing foreign judgments and foreign arbitral awards

Under Articles 222 and 223 of the Civil Procedure Law, enforcement of foreign judgments, orders and foreign arbitral awards is sought by petition to the execution judge, whose order may be appealed directly to the Court of Appeal. The order remains an…

The two-year labour limitation period applies to unexpired claims, counted from the old start date for earlier periods

Federal Decree-Law No. 9 of 2024 replaced Article 54(9) of the Labour Law: claims are now barred two years after the employment relationship ends, instead of one year after each right fell due. Under Articles 6 and 7 of the Civil Transactions Law, the new…

An appeal court sitting in chambers must hold a hearing before reversing or varying the judgment under appeal

Under Articles 45(6) and 167(1) to (3) of the Civil Procedure Law, and Article 7 of the Judicial Department resolution on the small claims court, the Court of Appeal normally decides appeals in chambers and may, without a hearing, declare an appeal…

An LLC partner may sue for his share of profits when the manager or general assembly fails to act

The general assembly of a limited liability company normally decides what profit is distributed, and a partner's entitlement only crystallises once the manager has prepared the annual accounts and the assembly has approved them. But the manager may not…

A public prosecution decision not to prosecute does not bind the civil courts

Only judgments of the criminal courts have binding effect on civil courts, and only as to what they necessarily decided about the occurrence of the act forming the common basis of the two actions, its legal characterisation and its attribution to the…

A second party's cassation appeal against the same judgment must be heard if it raises different grounds

Where several parties appeal the same judgment in cassation and the Court decides one appeal without joining the others, a later appeal brought in time by a different party with a separate interest, on grounds not addressed in the first decision, must be…

Losing a lawsuit or complaint does not make the claimant liable for abuse of the right to litigate

A person who uses a right lawfully is not liable for resulting harm to others (Articles 104 to 106 of the Civil Transactions Law). Abuse exists only in the cases listed exhaustively in Article 106, all marked by an intent to harm or a reckless disregard of…

Under the 2021 Labour Law, compensation for unlawful dismissal is limited to the two cases in Article 47

Article 47 of Federal Decree-Law No. 33 of 2021 confines compensation for unlawful dismissal to two cases: dismissal because the worker made a serious complaint to the Ministry, or because he filed a case against the employer that proved well founded.…

The Abu Dhabi real estate register is conclusive proof of ownership and can be challenged only for fraud or forgery

Under Articles 2, 3, 4 and 6 of Abu Dhabi Law No. 3 of 2005 and its implementing regulation, the real estate register kept by the municipal registration department is binding on everyone and its entries may be challenged only for fraud or forgery. Every…

A company that arbitrates without objecting cannot later deny its CEO's authority to agree to arbitration

An arbitration agreement is valid only if made by a person with capacity to dispose of the right in dispute, and an agent may include an arbitration clause only with special authority. But a principal may ratify an act exceeding the agent's authority,…

A concrete supplier was not liable for a building collapse that experts attributed to design and site supervision failures

Under Articles 878 and 880 of the Civil Transactions Law, the contractor and supervising engineer guarantee, as an obligation of result, against total or partial collapse and defects threatening a building's safety for ten years from handover. A supply…

A cheque returned because the account is frozen or suspended is not an execution title; a closed account is

To be enforced directly, a cheque must be sufficient in itself as an execution title and the right it embodies must be certain, liquidated, due, not seriously disputed and not conditional. Under Article 667 of the Commercial Transactions Law, read with the…

A sale of Abu Dhabi land not concluded before the municipal registration authority is void and yields no damages

Under the directive of the President of the State of 5 May 2010, which has the force of law, no court in Abu Dhabi may recognise a disposition transferring ownership of, or a real right over, any property in the emirate unless it is made before the…

A sole establishment cannot sue on a contract made by the LLC whose shares its owner bought

A sole proprietorship (مؤسسة فردية) has no legal personality separate from its owner. The conversion rules in the Commercial Companies Law apply only between forms of company and do not cover turning a company into a sole establishment or the reverse.…

A worker injured through the employer's fault may sue in the civil court in tort, beyond the labour-law compensation

Compensation for work injuries under Article 37 of the Labour Relations Law and Cabinet Resolution No. 33 of 2022 is a statutory, no-fault entitlement based on risk, calculated by the law's tables and heard by the labour court. A claim alleging the…

After Reem Island joined ADGM, a claim by a Reem Island company belongs to the ADGM Courts

New laws do not apply retroactively, but rules of public order take immediate effect on existing situations, and rules on jurisdiction ratione materiae are mandatory and of public order, so they apply at once to disputes not yet finally decided, even if…

Bankruptcy is not a debt collection tool: a judgment creditor's petition failed without proof of cessation of payments

A creditor owed at least AED 100,000 may petition to open bankruptcy proceedings after a written demand and thirty working days without payment, but the petition must include the documents in Article 74, including the name of a proposed trustee, and the…

A worker's waiver of statutory rights during employment is void, but a settlement made after resignation binds him

A release or acknowledgement by a worker giving up rights under the employment contract or the Labour Relations Law while the employment relationship continues is void, even with his consent, because those rights are matters of public order. A waiver or…

A partner in a limited liability company cannot be expelled by court order at the majority's request

Commercial companies are governed by the Commercial Companies Law, not the civil-law rules on partnerships, except where that law is silent. Article 677 of the Civil Transactions Law, which lets a majority of partners ask the court to expel a partner for…

A claim filed against a deceased person can be cured by joining the heirs; rescinded partnership refunds net of sums received

A claim or appeal brought against a person who had already died is not void beyond repair: it may be corrected by joining the heirs at the same level of court, by a memorandum or new statement filed with the case management office within the time limit,…

Contracting parties cannot sue each other in tort for breach, and departing from expert findings needs sound reasons

Where the injured party and the party responsible are linked by a prior contract, the claim for compensation cannot be based on tort, because that would override the contract's terms on liability and undermine its binding force, unless the harm results…

Annulment of an arbitral award cannot be used to challenge the tribunal's ruling on limitation, which is not public order

An award can be set aside only on the grounds exhaustively listed in Article 53 of the Arbitration Law, which the claimant must prove, or of the court's own motion where the subject is not arbitrable or the award breaches public order. The annulment court…

A worker paid out under an employer retirement savings plan cannot also claim statutory end-of-service gratuity

A worker may not combine benefits under a retirement, insurance or similar scheme with the statutory end-of-service gratuity; he may only choose the scheme that gives the larger amount. Where the employer has paid the contributions to the scheme, the…

A tenant in control of gas tanks is strictly liable for a fire that spreads to a neighbour's warehouse

Under Article 316 of the Civil Transactions Law, whoever has actual control of things requiring special care, owner or not (such as a tenant), is liable for the harm they cause unless it could not be guarded against. The liability rests on the principle…

The registered licence holder owns a sole establishment unless ownership was transferred by the statutory procedure

A sole establishment is a commercial business (محل تجاري) belonging to its owner or licence holder, with no separate legal personality; its rights and obligations are his. Ownership passes to another person only by a disposition notarised and entered in…

A dismissal without the written investigation required by Article 44 leaves the employer liable for notice pay

An employer may dismiss a worker without notice under Article 44 of the Labour Relations Law only after a written investigation and, for repeated breach of duties, two warnings; without them the worker is owed notice pay, even where an outside body has…

A principal that sells into an exclusive agent's territory through its own affiliate owes the agent commission

A registered commercial agency is concluded for the parties' common interest, so the principal cannot end or refuse to renew it alone without an acceptable reason, although the parties may agree an express termination clause, which leaves the court only to…

Several wrongdoers who cause one harm may be held jointly liable, and a pending criminal case suspends the civil claim's lapse period

A final criminal judgment binds the civil courts on the facts it necessarily decided: whether the act occurred, its legal description and who committed it. Where several persons are responsible for a harmful act, the court may order them to pay…

Bundled claims arising from separate causes are valued one by one for the AED 500,000 cassation threshold

A judgment of the Court of Appeal can be challenged in cassation only if the claim exceeds AED 500,000 or is of unassessable value (Article 175(1) of the Civil Procedure Law). Under Article 51(9), claims arising from a single legal cause are valued…

A bounced cheque is an execution title only when returned for no or insufficient funds (later overruled federally)

Article 667(1) of the Commercial Transactions Law makes a cheque that the bank has marked as unpaid for lack or insufficiency of funds an execution title that the holder may enforce directly. Because this departs from the rule that a returned cheque needs…

Property investment contracts are commercial and belong to the Commercial Court, not the rental disputes committee

A lease governed by Abu Dhabi Law No. 20 of 2006 presupposes that the tenant uses the premises himself. An investment contract, under which an investor exploits property by way of business, re-letting its units for profit, erecting buildings at his own…

A co-owner leaving joint ownership of indivisible property: valuation, offer to co-owners, then sale of the whole by auction

Where jointly owned real property cannot be divided in kind without serious loss, a co-owner who wants to exit may ask for sale of his share or of the whole property. In either case the trial judge appoints an expert to value the share by reference to the…

A bank's claim against an individual is admissible if it holds adequate security, even if it breached the salary multiple

Under Article 121 bis of the Central Bank Law (added by Decree-Law No. 23 of 2022), a licensed financial institution must obtain adequate security for facilities to individuals and sole establishments, and its claim is inadmissible if it did not; the rule…

Banks may charge agreed simple interest on commercial loans but not compound interest, a public-order rule

In a bank loan the bank advances money and the borrower must repay it with interest on the agreed terms. A creditor may charge interest on a commercial loan at the contractual rate; if no rate is agreed, the market rate at the time applies, capped at 9% a…

A registered mortgage is enforceable for the unpaid balance; part payment and interest disputes do not stop the sale

A notarised instrument, including a duly registered mortgage securing a certain, liquidated and due debt, is an execution title under Article 212 of the Civil Procedure Law, so the creditor can enforce it without first suing. Under Articles 1419, 1430,…

An unregistered Abu Dhabi lease bars a rent claim even after a court has referred the case to the committee

Under Article 6 of Judicial Department Resolution No. 25 of 2018, no rent claim is registered unless the lease is attached and registered with the municipality. This is a mandatory public-order rule, so the rental disputes committee at either level must of…

A respondent's counter-appeal must be filed by the first case-management hearing, even within thirty days

Under Article 164 of the former Civil Procedure Law (as amended in 2018), a respondent to an appeal may lodge its own appeal, by ordinary procedure or by a memorandum with grounds, only up to the first hearing for exchange of memoranda before the case…

An LLC manager is not personally liable for company debts without fraud, misuse of authority or gross fault

A limited liability company has legal personality and assets separate from its partners from formation; a partner is liable only up to his capital contribution (Article 71 of the 2015 Companies Law), and a manager is personally liable only for fraud,…

An arbitration clause in a subcontract cannot block a guarantee claim involving the issuing bank, which is not party to it

Under Article 8 of the Arbitration Law a court must declare a claim inadmissible if the defendant invokes an arbitration agreement before pleading on the merits, unless the agreement is void or incapable of performance. But a contract binds only its…

UAE courts may hear claims against a foreign resident; only real actions over property abroad are excluded

Under Article 20 of the Civil Procedure Law, UAE courts have jurisdiction over claims against UAE nationals and against foreigners domiciled or resident in the UAE, except real actions concerning property abroad; that is the only exception. In commercial…

Opening bankruptcy proceedings stays creditors' lawsuits and enforcement against the debtor, including against jointly liable co-debtors

A basic rule of bankruptcy, which is of public order, is that creditors may not take individual action against the debtor. Under Article 162(1) of the Bankruptcy Law (Federal Decree-Law No. 9 of 2016, as amended in 2020), the court's decision opening…

A New York ICC award is enforced in Abu Dhabi without review of its merits under the New York Convention

Foreign arbitral awards are enforced by petition to the execution judge under Articles 85 and 86 of the Implementing Regulation of the Civil Procedure Law, after checking that UAE courts lack exclusive jurisdiction, the foreign forum had jurisdiction, the…

A buyer's agreed waiver of claims for late completion of an off-plan villa was upheld as a valid exemption from contractual liability

Parties may include terms that increase, reduce or exclude a party's contractual liability, provided they do not conflict with mandatory rules, public order or morals. Article 296 of the Civil Transactions Law voids only clauses excluding liability for a…

When a land sale is void, the buyer recovers the price and unjust-enrichment compensation even if he shared the fault

Unjust enrichment is an independent source of obligation (Articles 318 and 324 of the Civil Transactions Law): a person enriched at another's expense without lawful cause must compensate, up to the lesser of the gain and the loss. A void contract only…

Abu Dhabi courts lack jurisdiction over a claim to which an ADGM-registered company is a party

Jurisdiction ratione materiae is a matter of public order that the court must raise of its own motion. The ADGM Courts are a judicial authority separate from the Abu Dhabi Judicial Department, and under Article 13(7)(a) of Abu Dhabi Law No. 4 of 2013, as…

An individual seeking insolvency relief must prove how he lost his assets; unexplained default is not insolvency

Insolvency means that a debtor's debts equal or exceed his assets (Article 401 of the Civil Transactions Law). A debtor in that position may apply under Articles 3 and 7 of Federal Decree-Law No. 19 of 2019 on Insolvency to settle his obligations, and the…

A court that finds restructuring futile may declare the debtor bankrupt and order liquidation on a creditor's petition

Opening bankruptcy proceedings does not oblige the court to order a restructuring plan. A plan may be ordered only if the debtor can continue trading and is likely to return to profit within a reasonable period suited to its business and debts (Article…

An Abu Dhabi land sale is formed by agreement; registration only passes title, and lifting the sale ban validated it

An action for validity and enforceability of a sale seeks a judgment that, once registered, takes the place of the seller's duty to transfer ownership; the court must examine any dispute over the seller's title and grant the claim only if transfer and…

A subcontractor has no contractual claim against the project owner, even if the owner paid some of its invoices

The main construction contract creates no rights for a subcontractor against the employer. Following the employer's instructions does not make the subcontractor a party to the main contract or entitle it to compensation for its breach, and an employer that…

A court may raise a developer's agreed delay compensation to match the buyer's loss despite a lump-sum clause

Under Article 390 of the Civil Transactions Law parties may fix compensation in advance, but the court may, at either party's request, adjust it to equal the actual loss, and any agreement to the contrary is void. A clause in an off-plan sale stating that…

The payment-order route applies only when the whole claim is a documented debt; traders' claims were barred after ten years

Claims are ordinarily brought by a statement of claim filed with the court. The payment-order procedure is an exception, available only where everything claimed is a debt established by a document signed by the debtor or a specified movable; it cannot be…

A written clause referring disputes to the DIFC Courts excludes the Abu Dhabi courts

Under Article 5(2) of Dubai Law No. 12 of 2004, as amended by Law No. 16 of 2011, the DIFC Court of First Instance may hear any civil or commercial claim that the parties agree in writing, before or after the dispute, to bring before it, provided the…

A purchase order is a binding contract once essential terms are agreed, and its storage-charge clause is enforceable

A contract is formed when an offer is matched by acceptance, expressed in words, writing, conduct or any behaviour that leaves no doubt of consent (Articles 125, 129 to 132 of the Civil Transactions Law). Under Article 141, it is concluded once the parties…

A labour claim interrupts the one-year bar, and failing to notify the Ministry before dismissing an Emirati made the dismissal arbitrary

The time bar on hearing labour claims is subject to the Civil Transactions Law rules on suspension and interruption. A court claim or any judicial step taken by the creditor against the debtor interrupts it; the time already run is wiped out and a new…

A buyer may rescind an off-plan plot sale and recover the price when the developer has not built the infrastructure

In bilateral contracts, if one party fails to perform, the other may, after notice, seek performance or rescission, and the judge may rescind and award compensation where justified. Contracts must be performed in good faith and include what follows from…

An appeal counts as filed on the date it is registered after payment of the fee, not when the statement is lodged

Registration of a claim or appeal has three stages: filing the statement, paying the fee, and entry in the register; payment of the fee is a condition of registration. A first-instance claim takes effect from the filing date even if the fee is paid later,…

An assignment of a debt cannot be enforced against the debtor who did not consent to it

The bar on cassation appeals against appellate rulings 'in execution procedures' (Article 173(3) of the former Civil Procedure Law) covers only rulings on the measures the execution judge takes to enforce a title. Rulings on a prior legal question on which…

A curator suing for a ward needs prior court permission unless urgent; corporate appellants must prove counsel's authority

Under Articles 178 and 225 of the Personal Status Law, a guardian or curator may not sue on behalf of a minor or a person under interdiction without prior permission of the personal status court; without it the proceedings are void as a matter of public…

Under the 2011 registration rules, an unregistered Abu Dhabi lease did not make a rent claim inadmissible

Executive Council Chairman Resolution No. 4 of 2011 requires leases of up to four years under Law No. 20 of 2006 to be registered with the municipality, and provides that unregistered leases are not recognised by 'competent authorities' (government and…

Courts may not hear claims whose court fees are unpaid; an agent who signs a cheque is personally liable on it

Courts at every level may not hear a claim, appeal or request on which the fees due under Abu Dhabi Law No. 6 of 2013 on court fees (as amended in 2016) have not been paid in full, unless an exemption or deferral was granted; this is a matter of public…

A debtor who claims insolvency must prove it; the court must rule on the claim as framed and as characterised on cassation

Insolvency (الإعسار) exists where a debtor's debts equal or exceed his assets; once established, the court may place him under interdiction under Articles 401 and 402 of the Civil Transactions Law, and the debtor may himself seek a declaration. Whoever…

When the statement of claim was never validly served, the appeal court must send the case back to the first-instance court

Where the Court of Appeal annuls a first-instance judgment because the statement of claim was not validly served on the defendant, so that proceedings were never properly constituted, it may not simply declare the nullity and stop, nor decide the merits…

A final civil award made in criminal proceedings survives the accused's later acquittal on the criminal charge

A judgment has res judicata effect only if it is final (قطعي) and issued by a court with jurisdiction, and only on a question that is fundamental, unchanged, argued between the parties and expressly decided; there is no implied res judicata. A civil award…

Al Ain appellants get the ten-day distance period for cassation appeals; non-compete limited by place

The 60-day period for a cassation appeal (Article 176 of the former Civil Procedure Law) is extended by the ten-day distance period under Article 12 for an appellant whose domicile is outside the seat of the Abu Dhabi Court of Appeal, such as Al Ain, even…

Under the law then in force, an insurer's diya liability for a female victim was half that for a male

Diya (blood money) for death or bodily injury is governed by Islamic law under Article 1 of the Penal Code of 1987 and Law No. 3 of 1996, applying the Maliki school. The AED 200,000 figure in Law No. 17 of 1991 (as amended in 2003) only converts the full…

Banks may raise loan interest under a contractual clause tied to Central Bank rates and charge compound interest

The relationship between a bank and its customers is governed by freedom of contract, so the parties' rights are set by the contract unless it breaches public order, and clear contract wording must be applied as written. A bank that raises the interest…

UAE courts cannot annul a foreign-seated arbitral award unless the parties chose the UAE Arbitration Law

An international commercial arbitration held abroad is not subject to the UAE Arbitration Law unless the parties agreed to apply it (Article 2 of Federal Law No. 6 of 2018). The law of the seat governs the award, including whether it can be set aside.…

Covid-era pay cuts accepted by the employee bind him, and RAK courts must follow RAK cassation precedent on interest

Wage includes only amounts that are fixed and regular; payments due only when their cause arises are not wage unless the law says otherwise. An employment contract is consensual, so the parties may agree to reduce pay, and the employee's acceptance may be…

A finance company's loan is commercial, so agreed delay interest and late fees are recoverable

The business of finance companies is commercial, so a loan they make is a commercial act even if it is civil for the borrower. Delay interest on the resulting debt is due at the agreed rate, subject to the statutory ceiling. Commercial loans by banks,…

A bank is not liable when a correspondent bank abroad freezes a transfer it executed correctly

A bank transfer is governed by the agreement between the ordering customer and the bank. In executing it the bank must exercise more than ordinary care, but its liability is measured by the data in the transfer order and by its own fault in choosing the…

Loss of the chance of salary and promotion caused by an accident is compensable damage

Compensation for harm includes the loss of a chance to earn a salary and to be promoted, where the injury ends or curtails the victim's career; the trial judge assesses compensation for that loss, provided the assessment covers all elements of the harm and…

An arbitration clause survives the termination of the main contract, and annulment is no appeal on the merits

An arbitration agreement is independent of the other terms of the contract, so the contract's nullity, rescission or termination does not affect it (Article 6 of the Federal Arbitration Law), whether it is a clause in the original contract or a later…

An employee who leaves because his salary is not paid is treated as arbitrarily dismissed

When an employee stops working because the employer has not paid his wages, that is a form of arbitrary dismissal for which he may claim compensation under Articles 121 and 123 of the Labour Law. Where the employer gives a serious reason for dismissal, the…

Rescission for breach restores the parties' positions, but whether rescission is justified is for the trial court

Contracts must be performed in good faith. If one party fails to perform, the other may seek rescission, and once the contract is rescinded or dissolved the parties are restored to their previous position, failing which compensation may be awarded…

A court may remove an LLC manager at a partner's request where serious management failures justify it

A partner in a limited liability company may ask the court to remove the manager, and the court may do so whenever it finds a legitimate reason, whether or not the manager is a partner; whether the reasons are serious is for the trial court. The manager…

An individual seeking a declaration of insolvency must prove it, including by disclosing his assets

Insolvency is the state in which a debtor's assets fall short of his debts that are due. Under the Insolvency Law a debtor may himself apply for a declaration of insolvency and the liquidation of his assets, but whoever claims insolvency must prove it,…

A trader's computer-generated statements and invoices can prove a commercial debt between traders

Regular commercial books are evidence in commercial disputes between traders (Article 15 of the Evidence Law). A trader who runs his business with modern technology may keep electronic records in place of paper books (Article 38 of the Commercial…

A court must put a requested decisive oath unless it is abusive, even against written evidence

The Public Prosecutor may appeal in cassation, within a year, against final judgments that breach the law where the parties cannot or did not appeal (Article 174 of the Civil Procedure Law), to resolve conflicting rulings on the same point of law. The…

A bankruptcy judgment given on appeal without the Public Prosecution's intervention is void

A bankruptcy petition is a procedural action to establish a legal status, the bankruptcy of a trader-debtor. The Public Prosecution must intervene in bankruptcy proceedings, and a judgment given without its intervention is void as a matter of public order,…

An LLC partner who manages the company negligently can be pursued personally for its debts

A partner in a limited liability company is liable for its debts only up to his share in the capital, and the company's own assets are normally the creditors' only security. That limit cannot be used as a shield for fraud, gross error, or appropriation of…

A transfer of LLC shares passes ownership only when entered in the company register and commercial register

A limited liability company's memorandum and every amendment must be published by entry in the commercial register; until then they cannot be relied on against third parties. A partner may assign his shares, but ownership passes, even between the parties,…

Annulling an award is limited to the statutory grounds; omissions such as arbitrators' nationality do not void it

An annulment action is not an appeal and cannot reopen the merits; the grounds in Article 53 of the Arbitration Law are exhaustive. Evidence, experts and whether to stay the arbitration pending another case are for the tribunal. What an award must state…

A transfer of a debt binds the creditor bank only with its consent; a sole proprietorship has no separate personality

An assignment of debt moves the debt from the original debtor to another person and takes effect against the creditor only if the creditor consents (Articles 1106, 1109 and 1110 of the Civil Transactions Law). A sole proprietorship has no legal personality…

A purchase registered in a nominee's name belongs to the hidden principal, but the principal must prove the arrangement

Contracting through an intermediary is permitted unless the law provides otherwise. A person who lends his name to a purchase is merely an agent of the true buyer under an undisclosed agency, so registration of the sale in his name transfers ownership, as…

Service by phone or other modern means is valid if identity and ownership of the channel are verified

A claim may be served by modern technological means, or by any method the parties agree, provided the identity of the recipient is confirmed, the channel belongs to the person served and any call is transcribed in a record placed on the file. Special rules…

An LLC manager may agree to arbitration for the company, and silence during the arbitration waives objections

A party that continues with an arbitration knowing of a breach of the arbitration agreement or of a non-mandatory rule, without objecting in time, waives its objection. Choosing an arbitral institution brings in its procedural rules, and the tribunal rules…

Limitation must be pleaded and correctly characterised; a void earlier claim does not fix the date interest runs

The plea that a claim is barred by lapse of time is not a matter of public order; it must be raised before the trial court, and its period depends on the correct characterisation of the claim. The five-year bar applies only to periodic, renewable rights,…

Dismissal to cut costs or reorganise is not arbitrary; leave pay after termination is on basic salary

An employer may organise its business as it sees fit, including narrowing its activity or cutting costs to protect its legitimate interests, and terminating some employees for that purpose is not arbitrary dismissal; the employee alleging arbitrariness…

LLC partners who sign a company loan as its representatives are not liable beyond their capital

A loan term falls due early if the borrower becomes insolvent, can no longer pay, or the security is lost, and generally whenever the creditor risks losing its security (Article 431(3) of the Civil Transactions Law). A partner in a limited liability…

Bank loans carry the agreed interest until full payment, including compound interest within Central Bank rules

A bank loan is a commercial act for both parties, whatever the borrower's status or purpose. Banking operations are exempt from the statutory ceiling on agreed interest, with the Central Bank empowered to set the rates banks may charge, and compound…

Introducing clients for a commission is akin to brokerage and is commercial; commercial debts bear interest from the due date

Brokerage is a commercial activity, and so are acts akin to it; 'akin' requires similarity in nature and purpose, not identity. A company is a trader if it carries on commercial activity or takes one of the forms in the Companies Law, even if its activity…

An expert must invite the parties to his first meeting, and grounds of appeal must be specific

A court-appointed expert must notify the parties of the first meeting of his assignment in the manner and time the Evidence Law requires; failing to do so makes his work void. Procedures are presumed to have been followed, and whether the expert gave…

A cheque is presumed to be a means of payment; the drawer must prove a different cause or duress

A cheque is a payment instrument, and whoever claims otherwise must prove the reason it was issued, that its cause was unlawful or had lapsed, or that the payee failed to perform. Duress that vitiates consent requires a threat of serious and imminent harm…

An agreed delay penalty is payable without proof of loss unless the debtor proves none occurred or it is excessive

A penalty clause fixes in advance the loss the parties expect from a breach, so the creditor need not prove loss; the debtor must prove that no loss occurred or that the agreed amount is excessive, and the judge may then adjust it (Article 390 of the Civil…

Only the principal can rely on an agent's lack of authority to sign an arbitration agreement

A claim is inadmissible where the parties have agreed to arbitrate and the defendant raises the arbitration clause at the first hearing; interpreting the clause is for the trial court. The relationship between a party and its agents or representatives…

A loan account is a simple account, not a current account, and must be assessed on the loan terms

The bank-customer relationship is governed by freedom of contract. A current account is an agreement to settle mutual claims through entries that offset each other, so only the closing balance is payable, whereas a bank loan obliges the bank to deliver or…

A creditor can have a debtor's sale of property set aside against it where the debts exceed his assets

Where a debtor's due or deferred debts exceed his assets, a creditor whose claim is due may ask that a disposal by the debtor that reduces his assets or increases his liabilities be declared unenforceable against him (Articles 396 to 399 of the Civil…

A DIFC Courts clause does not oust RAK courts over a RAK free-zone company not registered in the DIFC

The DIFC Courts' jurisdiction depends on the conditions in the DIFC judicial authority law. A company that is not registered in the DIFC is not one of its bodies or establishments; if its management is in Ras Al Khaimah and it belongs to the RAK Free Zone,…

Under apparent agency a land sale binds the owner, and only the owner can claim under it

A contract may be made through an agent, whose authority under the agency agreement governs his relationship with the principal; a third party must normally check the agent's authority. But where the principal's own conduct creates an outward appearance…

Service on a sole proprietorship must reach its owner; affixing notices is lawful only in narrow cases

Service on legal persons follows the Civil Procedure Law, and the Companies Law did not exempt one-person establishments from it. A sole proprietorship has no personality separate from its owner, so the claim must be served on the owner; leaving it with an…

A seller of registered land who never transferred title at the Land Department can be made to refund and compensate

Delivery of a sold property may be actual or constructive, for example where the seller keeps it at the buyer's request, but ownership of registered land passes only by registration at the Land Department. The trial court assesses whether loss occurred and…

A mortgagee bank may, but need not, enforce against the mortgaged property before other assets

A secured creditor may enforce first against the mortgaged real estate, but this is an option, not an obligation: it may pursue the debtor's other assets to recover its debt. Whether a creditor committed a fault in conducting enforcement is a question of…

A court cannot label a worker a partner and the licence holder a mere sponsor while ignoring contrary evidence

An employment contract is identified by subordination and wage, which distinguish a worker from a partner. A written contract can as a rule be shown to be sham only by writing, but where the sham conceals a fraud on the law it may be proved by any means.…

A worker's service continues when the business changes hands, and a waiver of statutory rights is void

A worker's service with the same employer or its legal successor is treated as continuous, whatever change occurs in the form or legal status of the establishment. When ownership of an establishment passes to a new owner, the employment contract continues…

Anyone with a direct interest may ask the court to appoint a liquidator, but the interest must be proved

Any person with an interest, even one who is not a partner, may apply to the court to appoint a liquidator for a company in liquidation when the partners cannot do so. The applicant's interest must be established, legitimate, positive and direct; a claim…

Where an offshore company never started business, partners recover their contributions without a liquidation

A criminal judgment binds the civil court only on what it necessarily decided about the act forming the common basis of both actions; an acquittal does not bar a civil claim founded on contractual fault. The court may dissolve a company at a partner's…

A sale of RAK property to a buyer not entitled to own it there is void and only the price is returned

A contract is void if the law prohibits dealing in its subject matter (Article 201 of the Civil Transactions Law). In Ras Al Khaimah, freehold ownership by others than UAE and GCC nationals was confined to the investment projects designated by the…

UAE courts hear a free-zone employee's claim against a foreign employer where the contract was performed in RAK

UAE courts have jurisdiction over a claim against a foreign defendant with no domicile or residence in the UAE where the dispute concerns an obligation performed in the UAE, and any agreement to the contrary is void. An employment contract performed at the…

RAK Free Zone Authority staff rules fill gaps in its employment contracts, including probation

The Ras Al Khaimah Free Zone Authority may lay down the rules needed to run and organise the Free Zone, its companies and its staff. A person employed by the Authority stands in a regulatory relationship with it: the employment contract governs where it…

Partner arrangements that keep UAE nationals at 51% of an LLC do not breach the share-transfer restriction

The rule in the Companies Law that a transfer of shares must not reduce the UAE national partners' holding below 51% of the capital prohibits only a reduction of the nationals' share. It does not invalidate partners' dealings designed to bring their…

Agreeing to arbitrate needs special authority, but a company that relies on the contract ratifies the clause

Only someone with capacity to dispose of the disputed right may agree to arbitration; a company must act through a person with power to dispose of its assets. A general power of attorney is not enough, because an arbitration agreement is an act of disposal…

The RAK Free Zone arbitration scheme does not take away the courts' jurisdiction over free-zone disputes

Arbitration in UAE civil and commercial matters rests on the parties' free agreement, which defines its scope and removes the dispute from the courts. The Ras Al Khaimah decree authorising the Free Zone chairman to set up an arbitration system for…

A managing partner is accountable as a trustee and is always liable for fraud in managing the business

A partner who manages a partnership acts as agent of the company and the other partners and holds the company's funds as a trustee. If paid, he is liable for loss caused to the company, the partners or third parties by his fault or breach of the…