Member Article

Commercial disputes in the United Arab Emirates (UAE) are generally resolved through litigation in the courts or arbitration. Arbitration is becoming an increasingly popular way to resolve disputes. The UAE recently signed the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).

General overview and court structure
The UAE is a federation of seven Emirates established in 1971. All the member Emirates, except for Dubai and Ras Al Kaimah, are part of a federal judicial system. Dubai and Ras Al Kaimah have independent judicial systems. In all of the Emirates except Ras Al Khaimah, the court system consists of the following three tiers:

Court of First Instance.

Court of Appeal.

Court of Cassation.

Ras Al Khaimah has only the Court of First Instance and Court of Appeal.

The legal system
The current legal system in the UAE is based on the Constitution of the United Arab Emirates, 1971 (as amended) (Constitution). The UAE has sovereignty in all matters assigned to it under the Constitution. The individual member Emirates have sovereignty over their own territories in all matters not in the exclusive jurisdiction of the UAE, as set out in the Constitution. In addition, each Emirate has a hereditary ruler who exercises considerable sovereignty over his own Emirate. The seven rulers, as members of the Supreme Council, collectively exercise sovereignty over the Union. Despite each ruler’s individual authority, there has developed a growing awareness of the practical need to operate as a sovereign state. As a result, in its relatively short history, the UAE has developed into a sovereign state more closely knit today than when it originally came into existence.

The Constitution provides, among other things, that in the UAE:

Islam is the official religion.

The Shari’a is a main source of legislation (see below, The Shari’a).

Arabic is the official language of the UAE (Article 7, Constitution).

The shari’a
The Shari’a, in its broad sense, is a body of religious, ethical and legal rules. The fundamental roots of Islamic hari’a are:

The Koran. This is a collection of divinely ordained rules.

The sunna. This consists of the precepts and sayings of the Prophet (Hadith), and an account of his actions.

There are supplementary sources of Islamic Shari’a. However, this chapter is primarily concerned with the Shari’a in its narrow sense - as a body of legal rules. To say that the Shari’a should govern judicial decisions is to refer to a process rather than to specify a result. Shari’a itself includes different schools of thought on a number of legal  issues. However, it is founded on familiar concepts of justice and equity, and the practical result in commercial matters is often, though not always, the same as would be reached under Western jurisprudence. Shari’a, like Anglo-American law, strives to give effect to the intention of the parties in matters of contract. It is possible, however, that the intention of the parties will be differently construed by jurists in the two systems. For example, one recent scholarly commentator on commercial law in the Arabian Gulf States has argued persuasively that traditional Shari’a would release the parties to a contract from performance for reasons of changed circumstances or frustration of purpose in many situations where English law would instead bind the parties to their contract.

 

Civil law system
The UAE operates under a civil law system, and statutes are the primary source of law. There is no doctrine of binding precedent, and judgments of the higher courts are not binding on the lower courts (although they can be a useful guide as to how a court may react in cases with similar issues in dispute). Each case is decided on its own merits and facts.

All court proceedings are in the Arabic language. All non-Arabic language documents filed in court by the litigants must be translated into Arabic by a translator licensed by the Ministry of Justice.

The dubai international financial Centre (difC)
In addition to the above judicial systems, the DIFC has its own body of laws, with an independent judicial authority and courts which deal with matters arising in the DIFC. The DIFC courts and procedures are not covered in this chapter.

 

Link to article