Dealing with Disputes and Claims in the UAE
Commercial Disputes UAE
litigation and commercial dispute resolution in the UAE
No business wants or plans to enter into a dispute, especially because they can be emotionally exhausting, stressful, disruptive, and damaging in both personal and business terms. Disputes can generate bad publicity and may lead to erosion of trust and goodwill, which are critical in business relationships. Companies and organizations have folded on account of improper management of disputes and claims. It is important to understand some things while dealing with disputes and claims in the UAE.
The United Arab Emirates (UAE) has, in recent times, witnessed a considerable increase in business opportunities and commercial activities. Foreign investors have flowed into the country in an increasing measure. This increase in business opportunities has also resulted in an exponential rise in commercial disputes and claims.
Disputes occur daily, given that no two persons will always have the same opinion on everything. There will, therefore, always be controversies and conflicts at the personal and organizational level.
A commercial dispute arises when there are disagreements over certain transactional issues. It could stem from the interpretation of contractual documents, execution of agreed-on projects, or payment for goods and services rendered.
Fraud-related disputes are generally on the rise. Businesses and individuals lose billions every year in fraud-associated cases. The international nature of commerce and improved electronic communication systems which companies and individuals rely on have led to a considerable increase in the number and value of fraud claims worldwide.
Types of Disputes
There are basically two types of disputes: criminal and civil. With criminal law, governments have established processes and structures with rules and punishments. Criminal disputes involve public interest. Society asserts that certain conduct is unacceptable and imposes a penalty for people who engage in such behavior.
Criminal law in the United Arab Emirates (UAE) is based mainly on Sharia law, the religious law of Islam. As such, the laws are restrictive and conservative. UAE criminal law is also broad in scope, ranging from theft to murder, homosexuality, and cybercrimes.
In criminal disputes, a person is arrested by law enforcement and charged to court on behalf of the State. If the UAE court finds the accused guilty of a crime, the court has the authority to punish the offender. The court does this by imposing a sentence such as an imprisonment, a fine, flagellation, community service, or bond.
In criminal matters, the person charged with an offense is called the ‘accused’ or the ‘defendant.’ The prosecution, on the other hand, is the Dubai Public Prosecution. This is the only agency authorized by law to initiate criminal cases in Dubai.
On the other hand, civil disputes deal with the specific interests of people or entities (e.g., organizations). It involves a conflict between people about the rights or liabilities of the individuals or entities affected.
A civil matter usually involves one individual seeking some kind of remedy from another person to resolve the dispute between them. Examples of aspects of the law that fall under the civil law category include:
- Financial issues like bankruptcy or banking disputes
- Employment law
- Family law
In civil claims, each person involved is called a party to the case. The party who initiates the lawsuit is generally referred to as ‘the plaintiff’ or ‘claimant.’ The party defending themselves in the claim is the ‘defendant’ or ‘respondent.’
If a party appeals the court’s decision, that party is called the ‘appellant’ and the opposing party, the ‘respondent.’
Both civil and criminal disputes require different standards of proof. In criminal cases, the prosecution must prove the case “beyond reasonable doubt” before the court will convict the accused. Civil disputes, on the other hand, must be proven “on the balance of probabilities.”
Disputes can also be categorized based on the context where they occur. In this instance, there are workplace disputes which can relate to pay rates, bullying, harassment, intimidation, misunderstandings, or discrimination.
There are also family disputes which have to do with trusts, divorce, and inheritance. Then there are international and cross-border disputes. Such cases involve individuals or organizations based in different countries.
Generally, the methods for the resolution of disputes include negotiation, mediation, arbitration, and litigation. In negotiation, the goal and focus are to achieve an early resolution of a dispute. This method can only be used in civil disputes and is successful when all the parties involved are committed to the process.
Sometimes when negotiations fail, the parties may turn to mediation. The mediator brings all the parties together, guides discussions, and provides clarity on technical, legal points.
The mediator can recommend a way forward and may even propose a final solution. However, the mediator’s recommendation or proposal does not bind the parties.
In arbitration, the parties approach a tribunal of the parties’ choosing to resolve the dispute. The outcome of this process is final and binding on the parties.
Litigation is the resort to the law courts for adjudication. It often takes time and is costly, especially where the parties appeal to higher courts.
Litigation usually comes on when all other options have failed or where a party believes that it cannot get justice or the relief that it seeks using other means. However, there could be a return to negotiation and mediation even when litigation has begun. However, this can only happen when all parties agree to do this.
It is important to note that litigation is the only option for resolving criminal cases. Criminal matters do not go to arbitration, mediation, or negotiation.
On the other hand, commercial disputes and claims in UAE are generally resolved through litigation or arbitration. Most parties prefer the arbitration process as it is less expensive and is not time-consuming.
However, certain civil and commercial disputes cannot be the subject of arbitration under UAE law. These include:
- Rental disputes. Exceptions are disputes related to agricultural lands, government-owned properties rented out for residential purposes, and certain other residential properties.
- Real estate disputes in Dubai, connected to the registration of the sold-off plan properties in the real estate preliminary register.
- Certain civil disputes that have to do with insurance policy
- Any dispute that has to do with Commercial Agency contracts in a situation where the agency is registered in the commercial agency register
- Disputes that fall within specific mandatory provisions in the UAE Companies Law
Contact a Lawyer For Dealing with Disputes and Claims in the UAE
Each dispute is peculiar, and therefore the method of resolution will be specific to that dispute. Nonetheless, it is always better to deal with a conflict while it is at its early stages. Taking the right actions at that time can help resolve the dispute faster, at a lesser cost, and more efficiently.
That is why it is crucial to get expert advice at the early stages of a dispute. It can make all the difference in the world. It generally results in a speedy resolution of the issues. Al Obaidli & Al Zarooni Advocates & Legal Consultants is a state-of-the-art, law firm, specialising in commercial claims and dispute resolution, claims management and transactional work.
Guiding clients on the best ways to approach dispute resolution is what we do best at Al Obaidli & Al Zarooni Advocates & Legal Consultants. We understand the importance of a business’s reputation. As such, we make it our job to resolve commercial disputes in a way that protects our clients’ best interests as well as their reputations.
Navigating through the intricacies and complexities of commercial disputes and claims in the UAE can be challenging. However, our experienced team of dispute resolution lawyers is available to help. Contact us today.