1 . What is the structure and organisation of local courts dealing with commercial claims? What are the main procedural rules governing commercial litigation?
There are two components to the United Arab Emirates’ (UAE) judicial system:
- the Federal Judiciary, presided over by the Federal Supreme Court as the highest judicial authority in the UAE; and
- the local judicial systems of the Emirates, if so established.
Articles 94-109 of the UAE Constitution establish the general principles governing the two systems but leave many of the details to the discretion of the local judicial authorities. Each of the Emirates has the right to choose to operate under either the Federal Judiciary or to maintain its own local judicial authority and courts.
The Emirates of Sharjah, Ajman, Fujairah and Umm Al Quwain operate under the federal judicial system, and thus do not operate their own local judicial systems. The Emirates of Abu Dhabi, Dubai, and Ras Al Khaimah maintain their own independent judicial systems, whose jurisdictions cover matters not reserved to the Federal Judiciary.
The UAE court structure comprises three levels of courts: a court of first instance and two levels of appeals courts. These courts apply the federal procedural laws.
In addition to these courts there are, in Dubai and Abu Dhabi, common law courts, set up in the ‘free zones’ of the Dubai International Financial Center (DIFC) and the Abu Dhabi Global Market (ADGM). Each of these free zones has its own body of laws, based on or derived from English law.
The following sections will deal primarily with onshore courts (i.e. federal and local courts as described above) as well as the laws/legislations applicable before the said courts.
2 . What pre-action considerations apply?
It is to be noted that there are certain pre-action considerations to be taken into account prior to lodging particular types of claims in the UAE.
Labor claims, for example, have to be raised first before the Ministry of Human Resources and Emiratization, prior to being referred to the competent labor courts as per Federal Decree-Law No. 33/2021 on Regulation of Labor Relations (Labor Law), which stipulates that:
“1. If the Employer, employee, or any beneficiary of their rights, disputes any of the rights they are entitled to under the provisions of this Decree-Law, he shall submit a request of the same to the Ministry, which will examine the request and take the actions it deems necessary to settle the dispute amicably between them.
2. In the event where an amicable settlement is not possible within the period specified by the Implementing Regulation of this Decree-Law, the Ministry shall refer the dispute to the competent Court, and the referral shall be accompanied by a memorandum containing a summary of the dispute, the arguments of both parties and the Ministry’s recommendation.”
Based on Article 54 of the Labor Law, either the employee or the employer may initiate a labor claim by referring such claim first to the Ministry of Human Resources and Emiratization, prior to any referral of the claim to the competent court, in the event that no settlement is reached by the parties before the Ministry.
In addition, in the Emirate of Dubai, where the claim amount is less than AED 500,000, the claim has to be raised first before the Dubai Center of Amicable Settlement of Disputes. Article 1 stipulates that: “Taking into consideration the provisions of Article (5) of […] Dubai Law No. 18/2021, the Center of Amicable Settlement of Disputes is to consider and decide on the following disputes:
- Division of joint funds.
- Disputes with a claim amount that does not exceed (AED 500,000) five hundred thousand Dirhams, except for a substantive dispute involving a financial facility that is subject to aforementioned Federal Decree-Law no. (14) of 2018.
- Claims for approval of amicable settlements and agreements regardless of their value.
- Disputes whose parties agree that they be considered by the Center.
- Individual claims for the delegation of experts before the Court of First Instance.”
In the other emirates, any civil/commercial claim for an amount less than AED 10,000,000 must first be referred to the Mediation and Conciliation Center. In the event no amicable settlement is reached between the litigant parties before the said center(s), the claim is referred to the competent court.
Further, Article 16 (1) of Federal Law No. 28 of 2005 on Personal Status as amended stipulates that: “Any lawsuit concerning personal status matters shall not be admitted before the court unless it has previously been submitted to the Family Orientation Committee, except matters concerning wills, inheritance and like matters, summary and provisional lawsuits concerning alimony, fostering, guardianship as well as cases that cannot be settled by conciliation such as evidence of marriage or divorce.”
Non-compliance with the pre-action procedures as stipulated by UAE law prior to lodging a particular kind of claim results in the dismissal of the claim by the competent court acting on its own motion, even if none of the litigant parties raises such issue.
 Article 54.
 Article 1 of Decision No. 8/2022 by the Chief Justice of Dubai Court.
 Federal Law No. 17 of 2016 on the Establishment of Mediation and Conciliation Centers in Civil and Commercial Disputes (and its amendment by the Federal Law No. 5 of 2021) and relevant circulations.
3 . What are the main alternative dispute resolution (ADR) methods used to settle large commercial disputes?
Further to the mandatory pre-action formalities that have to be complied with (which encompass the referral of certain claims to specific dispute resolution center/s as described above), parties may agree to mediate any dispute between them. Federal Law No. 6 of 2021 concerning Mediation to Settle Civil and Commercial Disputes sets out the basis of the mediation process in the UAE.
Arbitration is another alternative means of dispute resolution which is widely used in the UAE (see below).
4 . How long, on average, do court proceedings take to reach trial?
A newly lodged claim has to follow a certain process prior to being referred to the competent court. A Case Administration Office is responsible for preparing the case, completing all summoning formalities, receiving the parties’ submissions so that the case is eligible to be referred to the competent panel. Generally, and with the exception of a number of cases involving elements of complexity that may lead to protracted litigation proceedings, UAE courts have a good record of closing cases within short periods of time. Recently, after the civil procedures law was amended, courts started closing cases within shorter periods of time. As per Article 78 (3) of Federal Decree Law No. 42/2022 (Civil Procedures Law), the court is to issue the judgment terminating the dispute within a period not exceeding 80 days from the date of the first hearing session of the lawsuit before it.
5 . What disclosure obligations apply? Are parties required to disclose unhelpful documents as well as those on which they rely?
As a matter of principle, and based on Article 1 of Federal Decree-Law No. 35/2022 Promulgating the Law of Evidence in Civil and Commercial Transactions (Law of Evidence), the burden [of proof] falls upon the plaintiff to prove his claim.
However, in accordance with Article 33 of the Law of Evidence a litigant party may ask other litigant parties through the court to disclose certain documents, if the said documents are joint between litigant parties (keeping in mind that documents may be considered as joint if such documents are for the benefit of both litigant parties, or if the said documents establish the parties’ mutual obligations and rights or affect their legal status). The requesting party should identify the document to be disclosed.
Beyond this, there is no general obligation on a litigant to disclose documents which are unhelpful to its case.
6 . Can witnesses be required to attend trial and face cross-examination?
Although witness testimony is recognized as an acceptable means of proof in commercial transactions, there is little reliance on witness testimony before UAE courts in civil and commercial matters. Documented evidence is more predominantly used in court proceedings.
7 . What discretion do the courts have in making costs orders?
Courts in the UAE may award compensation covering court fees and expenses. Court fees/expenses include summons costs, experts’ fees and any costs that are paid to the court or through it. Attorneys’ fees are not considered while making costs orders. A nominal fee may be granted in that regard.
8 . What are the main types of interim remedies available?
Precautionary attachments are the most widely used interim remedy available under UAE law. The Civil Procedures Law sets out the conditions for the grant of such remedy; it states:
“without prejudice to the provisions of any other legislation, the creditor may request the court hearing the case or the summary matters judge, as the case may be, to impose the provisional seizure on the property and the assets of his opponent in any of the following cases:
- Each case wherein he fears from losing the guarantee of his right, in any of the following cases:
- If the debtor does not have a stable residence in the State.
- If the creditor fears on the basis of serious evidence that the debtor flees or smuggles or conceals his funds.
- If the debt securities are at risk of being lost.
- In favor of the lessor against each of the tenants or the sub-tenant, on the movables, fruits and proceeds existing in the leased premises as a guarantee for the preferential right legally prescribed for the lessor. Such seizure may be imposed in favor of the lessor where the movables, fruits and proceeds were moved without his knowledge, unless (30) thirty days have lapsed from the date of their movement, or unless amounts of money sufficient to guarantee the preferential right prescribed for him remained in the leased premises.
- If the creditor holds an official document or an ordinary document for a debt payable and not subject to a condition or where he possesses a non-enforceable judgment if the debt established therein is of a specified amount.
- In favor of the employee where it is impossible to settle his dues as determined by the law governing the relationship between them, in order to secure payment of his dues after being temporarily evaluated by the competent administrative authority.
- In all cases, the court may, before accepting the application for seizure, request any statements, evidence or affidavits, conduct a brief investigation or the necessary investigations with the assistance of the competent administrative authorities when it deems it necessary.”
 Article 247.
9 . What approach do the local courts adopt with respect to arbitration? What arbitration law applies and is it based on the UNCITRAL Model Law?
The UAE is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and has established a good track record of complying with its treaty obligations which the UAE courts (both local “onshore” courts and the DIFC and ADGM “offshore” courts) generally adopting a “pro-arbitration” approach.
Where the parties have included an arbitration provision in their contract or have entered into an arbitration agreement after the start of the dispute between them, courts decline to hear the case (if the respondent raises a jurisdictional plea prior to setting out its substantive defense in the first submission to be filed with the court). The applicable law is Federal Law No. 6 of 2018 (Arbitration Law), which was based on the UNCITRAL Model Law.
10 . Can arbitrators grant interim relief?
The Arbitration Law has given the arbitrators the authority, upon the request of one of the parties or on their own initiative, to take the interim measures that they deem necessary; it has allowed the arbitrators to require the applicant of the interim or precautionary measures to provide appropriate security to cover the costs of these measures, and to require the applicant to bear all the damage resulting from the enforcement of said orders if the arbitrators decide at a subsequent time that party’s ineligibility to request the issuance of said orders.
Article 21 of the Arbitration Law provides as follows:
- Subject to the provisions of Article 18 of the present Law, and unless otherwise agreed by the Parties, the Arbitral Tribunal may, upon request of a party, or on its own initiative, order either one to take interim or precautionary measures as it may deem necessary and as required by the nature of the dispute, and in particular:
- An order to preserve evidence that may be material to the resolution of the dispute.
- Taking necessary measures to preserve the goods that constitute a part of the subject-matter of the dispute, such as the order to deposit with third Parties, or to sell perishable goods.
- Preserving assets and property of which a subsequent award may be enforced.
- Maintaining or restoring the status quo pending determination of the dispute.
- Taking action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself.
- The Arbitral Tribunal may require the applicant of interim or precautionary measures to provide appropriate security to cover the costs of these measures, and it may require him to bear all the damage resulting from the enforcement of said orders if the Arbitral Tribunal has decided at a subsequent time his ineligibility to request the issuance of the same.
- The Arbitral Tribunal may modify, suspend or terminate an interim measure which it has ordered, upon request of a party, in exceptional circumstances, by prior notice to be given to the Parties.
- If the Arbitral Tribunal rules as a preliminary question that it has jurisdiction, then any party may request, within fifteen (15) days after having received notice of that decision, the Court to decide the matter ”.
- The Court shall decide the request within thirty (30) days from the filing registration date of the request with the Court, which decision shall not be subject to appeal through any means of recourse. The arbitration proceedings shall be stayed until said request is decided upon, unless the Arbitral Tribunal decides to continue the proceedings upon request of a party.
- The party who requests the arbitration proceedings shall bear the arbitration expenses if the court has ruled that the arbitral tribunal has no jurisdiction
11 . On what grounds can an arbitration award be appealed?
Arbitration awards are final and binding and may not be subject to appeal under UAE law. The Arbitration Law provides certain limited grounds for the setting aside of arbitral awards under Article 53 of the Arbitration Law:
“[…] The party seeking to set aside the award must establish any of the following circumstances:
- There was no Arbitration Agreement, or such agreement was null and void, or forfeited pursuant to the Law chosen by the Parties, or according to the present Law if no reference is made to a certain law.
- A party was, at the time of conclusion the Arbitration Agreement, incapacitated or lacking capacity according to the Law governing his legal capacity.
- A party has no legal capacity to act in the disputed right according to the law governing his legal capacity, set out in Article 4 of the present Law.
- A party to the arbitration was unable to submit his statement of defence due to that he was not given a proper notice of the appointment of an arbitrator or of the arbitration proceedings, or due to the failure of the Arbitral Tribunal to comply with the principles of litigation or for any other reason beyond his will.
- The arbitral award has not applied the law agreed by the Parties to cover to the subject-matter of the dispute.
- The composition of the Arbitral Tribunal or appointment of an arbitrator has been made contrary to the provisions of the present Law or the agreement of the Parties.
- The arbitration proceedings are void in such a way that has influenced the award, or if the arbitral award was issued after the termination of its specified period.
- The arbitral award has decided on matters not covered by the Arbitration Agreement or falling beyond the scope of said arbitration. Nevertheless, if the decision on matters submitted to arbitration can be separated from those not so submitted, then only the last said parts of the award may be deemed null and void.”
It is to be noted that the Court of Appeal before which an action to set aside an arbitration award is initiated, may, on its own initiative, nullify the arbitral award, if it finds any of the following:
- That the subject-matter of the dispute is not capable of settlement by arbitration.
- That the arbitral award is in conflict with the public order and the public morality of the State.
The Court of Appeal does not examine the merits of the arbitration award.
12 . What international conventions and agreements on enforcement of judgments or arbitral awards is your jurisdiction a party to?
A distinction is to be made between foreign judgments (i.e., issued by courts outside the UAE) and foreign arbitral awards.
Foreign judgments may be enforced in UAE by submitting an application to the enforcement judge seeking an order to recognize the foreign judgment and permission to lodge an execution file as per the conditions of Article 222 of the Civil Procedures Law, below.
- Judgments and orders delivered by a foreign country may be ordered to be executed in the State under the same conditions as prescribed in the law of that country for the execution of judgments and orders issued in the State.
- The execution, including the particulars specified in Article (44) of this Law shall be made on a petition and submitted by the person concerned to the execution judge. The judge shall issue his order within (5) five days from the date of its submission. His order may be appealed in accordance with the rules and procedures prescribed for filing an appeal. It shall not be admissible to order the execution before the verification of the following:
- The courts of the State are not exclusively competent in the dispute in which the judgment or order was rendered and the foreign courts that issued it are competent in accordance with the rules of international jurisdiction established by their law.
- The judgment or order is delivered by a court in accordance with the law of the country in which it was issued and duly ratified.
- The litigants in the case in which the foreign judgment was delivered were summoned and were duly represented.
- The judgment or order has the force of res judicata in accordance with the law of the court which issued it, provided that the judgment has acquired the force of res judicata or provided for in the same judgment.
- The judgment does not conflict with a judgment or order rendered by a court of the State and does not contain anything contrary to public order or morals.
- The execution judge shall have the right to obtain the documents supporting the application before issuing his decision.”
Foreign arbitral awards can be enforced in UAE as per the requirements and conditions set out in the New York Convention as the UAE is party to/has ratified the said Convention.
Article 3 of the New York Convention provides as a matter of principle that:
“Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.”
The award creditor seeking to enforce the award in the UAE is to submit, along with an application to the execution judge, a duly authenticated original award or a duly certified copy thereof and the original agreement which contains the parties’ agreement to refer disputes between them to arbitration, or a duly certified copy thereof.
13 . What types of judgments in commercial matters are enforceable and what types are excluded?
Judgments issued by first instance courts in cases where the claim amount is below AED 50,000 are final and enforceable by reference to Article 29 (1/B) of the Civil Procedures Law, which provides that:
“Minor circuits formed by a single judge shall be competent to issue first instance judgments in the following matters:
- All lawsuits of first instance regardless of their value.
- Judgments issued by the circuit of first instance are final if the value of the case does not exceed (50,000) fifty thousand dirhams.”
Where the claim amount exceeds AED 50,000 it will be subject to appeal and a judgment issued by Appeal Court can be directly enforced.
Judgments issued by the Court of Appeal can be challenged through lodging a cassation appeal provided that the claim amount exceeds AED 500,000. The Court of Cassation has the authority to issue, upon the request of the party who challenged the judgment, a stay order to suspend the execution procedures pending the issuance of a final and irrevocable judgment by the Court of Cassation.
14 . What is the process for registration of foreign judgments and arbitral awards?
Judgments issued by foreign courts may be enforced in the UAE by submitting an application to the enforcement judge. The applicant has to demonstrate that the conditions and requirements set out under any potential judicial cooperation agreement dealing with the recognition and enforcement of judgments between the jurisdiction where the judgment was issued and the UAE, or in the absence of any such agreement, under Article 222 of Civil Procedures Law. Foreign arbitral awards can be enforced in the UAE as per the conditions set out under the New York Convention, which provide that each contracting state is to recognize arbitral awards issued in another contracting state as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, as already mentioned. The award creditor may submit, along with an application to the execution judge, a duly authenticated original award or a duly certified copy thereof and the original arbitration agreement between the parties or a duly certified copy thereof.
15 . Once the judgment or award is registered, what are the available methods of execution?
The award creditor has to serve the writ of execution on the award debtor requesting the debtor to pay the awarded amounts or honor the judgment and has the right after the lapse of 7 days from summoning the award debtor to apply to the execution judge in order to attach any assets such as vehicles, bank accounts, property owned by the debtor; monies owed to the debtor by third parties also may be attached under the third parties custody. In addition, an application may be filed to issue an arrest warrant or travel ban against the debtor if he did not honor the awarded judgment.
Article 233 of the Civil Procedures Law stipulates that:
- “[…] The execution applicant shall indicate the procedures required to be taken in the list of execution requests upon registration electronically or on paper.
- The execution shall be preceded by the service of the writ of execution in accordance with the procedures prescribed in this Law.
- The notice paper shall state the matter required and the notice to pay the debt served on the debtor within (7) seven days from the date of his notification, and the election of domicile for the execution applicant in the circuit of the court wherein the execution takes place if his original domicile or workplace or his elected domicile is not located therein.”
Article 234 of the Civil Procedures Law grants the execution judge the authority to order the provisional seizure of the debtor’s monies/assets prior to the debtor’s notification of the writ of execution (the execution judge may ban the debtor/person against whom execution is to be effected from traveling before notification of the writ of execution. Article 234 stipulates that:
- “Notwithstanding the provisions of Article (233) of this Law, without prejudice to the rules of provisional seizure of movable property, seizure of the funds the debtor has with third parties and the provisions of any other legislation, the execution judge may order the provisional seizure of the debtor's funds in accordance with the rules and procedures prescribed in this Law prior to his notification of the writ of execution, if he finds evidence indicating that the debtor seeks to smuggle his money from the credit information report or from the case presumption or that the creditor hast lost the general guarantee.
- The execution judge may order to inquire about the debtor's funds prior to his notification of the writ of execution.
- The execution judge may ban the person against whom execution is effected from traveling before his notification of the writ of execution if he finds evidence that the debtor is seeking to leave the country.”
16 . What interim measures are available pending enforcement?
As previously mentioned, Article 247 of the UAE Civil Procedures Law grants the creditor the right to submit an application to the summary matter judge or the subject matter court seeking to apply a precautionary seizure upon the property and assets owned by the debtor. Moreover, a new article, Article 234 of the Civil Procedures Law, grants the execution judge the authority to order the provisional seizure of the debtor’s monies/assets prior to the debtor’s notification of the writ of execution (the execution judge may ban the debtor/person against whom execution is to be affected from traveling before notification of the writ of execution, such authority granted to the execution judge considered to be an extra layer of protection to the creditor’s interests).