Dispute resolution procedure in Dubai: An easy way to understand it

The UAE’s dispute resolution landscape has changed dramatically during the previous decade. Dubai and Abu Dhabi, two of the world’s most important business centers, have made, and continue to make, significant strides toward their growth as strong jurisdictions in which parties may efficiently resolve their commercial disputes via the new dispute resolution procedure in Dubai.

In this article, you will learn more about the dispute resolution procedure in Dubai and the rest of the UAE.

1. The Background on dispute resolution in Dubai

2. Why Dispute Resolution?

3. Considerations of the Legal System

4. Dispute resolution procedure in Dubai and its different types

5. Resolving disputes in a friendly manner

6. Are you looking to get into the world of legal procedures? The Talent Point has got your back!  

1.     The Background on dispute resolution in Dubai

The UAE has developed as a fundamental territorial business center, attracting gigantic and multicolor cross-border exchanges. In consequence, financial specialists have entered into contracts in the UAE while choosing foreign jurisdiction laws to govern such transactions.

The UAE attracts International businesses and the opportunities there but many are cautious regarding the legal system. A usual problem is the lack of legal advice should a business relationship goes south.

2.     Why Dispute Resolution?

One of the systems mainly used all over the globe is English law. Its goal is to take care of contractual relationships, select a foreign jurisdiction, or employ arbitration as an option for litigation. A lot of international businessmen come to profit on investment opportunities in the Middle East, particularly in the Gulf countries of the UAE, Bahrain, and Kuwait, which makes dispute resolution services in the region a high priority.

Individuals and parties frequently have disagreements and concerns, and resolving them is what people know as conflict resolution. Similarly, the key people who deal with difficulties that arise between parties or business-related concerns that require conflict resolution procedures are dispute attorneys and prosecution lawyers. Dispute resolution is a multistep procedure that begins with negotiation, progresses to mediation, and concludes with arbitration and litigation.

3.     Considerations of the Legal System

The United Arab Emirates divide into seven emirates. The UAE Federal Constitution governs each one of them. By clauses in the Constitution, the individual emirates received some legislative powers.

The UAE has a civil law system, with the Supreme Council of the Federation’s statutory laws serving as the major source of law. Legislative codes govern civil and commercial interactions in the UAE. When the situation does not prosper in the codified law, local courts turn to Islamic Shari’ah law. However, international businesses, particularly those with a common law background, are unfamiliar with this approach.

It is important for anyone considering investing in the UAE to construct contracts in such a way that they may take advantage of the multiple dispute resolution mechanisms available.

4.     Dispute resolution procedure in Dubai and its different types

There are many options for any dispute resolution procedure in Dubai people can choose from. However, these are the most commonly named:

4.1 Proceedings in the courtroom

The local courts are the method for resolving disputes where they conclude, perform, or execute a contract in the UAE. Local court procedures take place in Arabic, with all documents requiring translation into Arabic by a Ministry of Justice-licensed translator.

Although judicial procedures have to be open to the public, juries rarely hear oral arguments. Instead, the judge examines the case’s merits by reviewing the parties’ confidential pleadings and papers.

4.2 Mediation

Mediation is a process in which the parties pay a mediator to assist them in the goal of coming to a settlement. A subject acting as a middleman helps both parties come to a solution. The objective of mediation is for an impartial third party to intervene between disputants and help them agree on their own.

Instead of enforcing a solution, an experienced mediator operates with both parties to analyze the different perspectives and find out what is truly happening underneath the arguments.

Mediation is an adequate course of action when the task is to resolve disputes because the price is lower and, rather than bringing disagreements to court, it saves a great amount of time. In consequence, experts recommend mediation as an alternative for the new dispute resolution procedure in Dubai.

4.3 Arbitration

The UAE put in motion a new arbitration law, which repealed the provisions of the UAE Civil Federal Law No. 11 of 1992’s Arbitration Chapter. Arbitration has the figure of an arbitrator, who is in charge of resolving the dispute during the process. Unless all parties agree, the arbitrator will not authorize a settlement. Also, there is an individual as a third party who will be a judge and act as an authority figure. An arbitrator hears each party’s version, similar to a mediator, but each party has the opportunity to defend their rights and give proof.

4.4 Litigation

Litigation is a form of process in which the right courts process a disagreement, where a judge (and, if applicable, a jury) would determine based on the evidence presented and render a decision on the matter, in light of the dispute resolution procedure in Dubai. Both sides participate, and they use a conflict lawyer to protect their rights as they go through the procedures. This is a definite approach for resolving a disagreement between two parties and a cornerstone for a dispute resolution procedure in Dubai.

4.5 Department of Economic Development (DED) Dispute Resolution

Clients looking to fix claims with or potentially recover debts from companies based in Dubai that have failed on payments can now get assistance from the Department of Economic Development (DED). It has established a dispute resolution procedure in the Dubai framework for business issues. The CCCP, or Department of Economic Development’s Commercial Control and Consumer Protection Department implemented the BPD, namely the Business Protection Department. This department provides services for the resolution of conflicts in Dubai for local commercial businesses, either through intermediation or other law-enforced amicable settlement strategies.

Also, the department can provide business-to-business (B2B) services of dispute resolution for commercial businesses in the EAU. In addition, they educate traders on the rules and laws to follow in order to ensure a safe trading environment.

4.6      Complaint Procedure of Business to Business (B2B) Deals

Clients who are attempting to resolve claims with and/or recover debts from Dubai-based corporations that have failed on payments can finally exhale a sigh of relief.

The Dubai Economic Development Department’s Business to Business Dispute Resolution Service (“B2B”) has created structures for a dispute resolution procedure in Dubai, for issues in business to business transactions. This tool allows any complainant, regardless of where their location, to register a complaint against trader-licensed firms in Dubai for commercial transaction issues. The dispute resolution procedure in Dubai specifically caters to complaints involving defendants/respondents with a license in the country.

4.6.1        Coverage in the B2B complaints procedure

B2B will settle Disputes that do not require the use of technical specialists and/or contracts with complex clauses. Their decision is final. The B2B attempts to negotiate a beneficial agreement between both parties within 10 working days.

The following are examples of disagreements that are not exclusively B2B-related:

• Disputes involving bounced checks
• Services in construction and technology
• Electronic crimes
• Clients have an alternative sensible option when it comes to resolving conflicts administratively, especially when:
• The quantity of the claim is insufficient to justify going to court; alternatively
• When the nature of the disagreement may be resolved swiftly; and
• The contested issues do not require technical competence or ambiguities that demand a court decision.

In terms of formalities, regulations, and procedures, the B2B mechanism is less demanding than courts and traditional conflict resolution forums. When it comes to B2B conflicts, the costs are substantially lower. Furthermore, unlike other UAE institutions, B2B will consider reviewing English-language documentation.

5.     Resolving disputes in a friendly manner

The Dubai Law No. 16 of 2009 established the Centre for Amicable Settlement of Conflicts (the “Centre”). Its mission is to settle disputes before they go to court, according to the new dispute resolution procedure in Dubai. The Centre works alongside the Dubai Courts, and the mediators who work there have the supervision of a judge. If the parties reach an agreement, they must write it down, sign it, and have a court witness the process. Such a settlement agreement is legally binding and is comparable to an executive instrument. The instrument is bound to implementation directly through the Execution Courts. If the parties are unable to reach an agreement, they must take the case to court.

The Centre gains jurisdiction over a dispute on the request of a party to the dispute or when the disagreement involves a subject defined in Dubai Law No. 16 of 2009 as a dispute that requires the assessment of the Centre before being brought to court. There are, however, some disputes over which the Centre does not have jurisdiction (such as Labour disputes, disputes relating to personal status, summary and interim orders and actions, actions in which the Government of Dubai takes part, etc.).

5.1 Changes in The Mediation Centre law

The Law on Mediation Centers specifically aims to:

• Encourage the adoption of alternative conflict resolution techniques.
• Improve the continuity of contractual relationships.
• Expedite the adjudication of disputes.
• Establish a work environment that ensures the secrecy of any dispute resolution procedure in Dubai.

A competent judge has to submit the conflicts to the Center in order to find a resolution for it. Parties are now free to bring problems to the Centre by mutual agreement, as stated in article 3 of the Mediation Law.

The Centre has broad jurisdiction, however, it lacks authority over some specific issues. It will not be able to consider the following applications in this regard:

• Orders and requests issued temporarily, as well as urgent litigation
• Matters that involve the government as one of the participants.
• Disputes in which the courts do not have jurisdiction.
• Disputes that are not amenable to resolution through the law
• Personal status disagreements

Prior to the introduction of the Mediation Centre Law, there were lawsuits filed with the courts. The Center’s duties were outsourced.

A new provision in articles 7 and 8 permits the president of the Dubai Court of First Instance to delegate the Centre’s conciliation powers to government agencies or authorized entities, who will then work out a mutually agreeable solution.

As though they were functioning under the auspices of the Centre, any conciliators or mediators from such other agencies will have the duty by order of the terms and regulations of the Mediation Centre Law.

Any such referral to a government agency or body belongs to the jurisdiction of disputes between companies, private institutions, and persons involving the government agency’s or private entity’s capabilities.

5.2 Who is eligible for this?

In the following situations, a party may choose to refer the matter to the Centre:

• If one or more parties ask to refer the matter to the Centre.
• Upon request of all parties to a dispute pending before the Dubai Court of First Instance, Commercial Courts, or Real Estate Courts (regardless of the suit’s value), and with the agreement of the circuit’s head judge.
• On a party’s request for the appointment of an expert.

The following conflicts require the assessment of the Centre before referring them to court:

• When undivided property suffers a division.
• If the amount in dispute is less than AED 100,000, a dismissal will be in order considering the new dispute resolution procedure in Dubai.

6.     Do you want to learn more about the dispute resolution procedure in Dubai?

When you have an overview of how the dispute resolution world works, it becomes a much easier task to understand and subsequently jump in the water and start working your way to the top. Here at The Talent Point, we can provide you with the necessary tools to help you achieve that and more.

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