Civil law: UAE case law

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…

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…

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…

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…

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 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…

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 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…

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…

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…

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,…

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…

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 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…

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 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…

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…

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…

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 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…

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…

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.…

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 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…

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…

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 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…

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…

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…

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…

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…

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…

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…

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 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…

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…

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…

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…

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…

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…

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…

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,…

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 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…

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 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…

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…

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…

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…

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…