In times such as these, it is important to get the best available legal information and advice and remember that not all information and advice will be applicable to a particular situation or contract. Many businesses in the United Arab Emirates (the UAE) and the countries of the Gulf Cooperation Council (the GCC) are wondering what to do with respect to their obligations or those of their cocontracting parties. Measures to Contain the Impact of Covid-19 and Ensure Business Continuity The UAE Cabinet has approved a new decision to ensure business continuity as follows:
- the extension of residence permits expiring on 1 March 2020 for renewable period(s) of three months without additional fees upon renewal;
- the extension of any Emirates ID for renewable period(s) of three months effective 1 April 2020;
- the extension of the validity of documents, permits, licences and commercial registrations expiring 1 March 2020 and thereafter for renewable period(s) of three months starting 1 April 2020.
Obligations and Force Majeure Force Majeure is a concept invoked both in civil law (the system applicable on-shore UAE and in countries of the GCC) and common law (the system applicable in certain Free Zones such as the Dubai International Financial Centre (the DIFC)) in connection with the performance (or non-performance) of contractual obligations. The UAE civil law does not provide an exhaustive list nor definition of Force Majeure events but Force Majeure is typically invoked in cases of natural disaster, industrial actions, changes in the law which give rise to an inability to perform an obligation. Generally, federal laws (such as the Civil Code of the UAE) apply on mainland UAE as well as in the various Free Zones. However, certain Free Zones such as the DIFC have adopted their own laws and regulations applicable in the event of Force Majeure. It is to be noted that not all agreements contain a Force Majeure clause and even though such clause is often included in contracts there is no standard wording.