Understanding the UAE Legal System

An In-depth Overview of Court Systems, Jurisdiction, and Enforcement in the UAE

Sources of Law

oCommon Law and Civil Law are the two main global legal systems.
Overv oCivil Law is more widespread (approx. 150 countries), while Common Law is followed by around 80 countries.
iew

○Civil Law emphasizes codified statutes.

Key
○Common Law relies on case law and judicial opinions.
Distin
ctions
○Many countries adopt a mixed legal system, blurring boundaries.

Histor ○Legal systems evolve with amendments to address socio-economic changes.

ical
Foun ○Historical origins offer crucial insights into the development of legal frameworks.
datio
ns

Com ○Adversarial system with two opposing parties.

mon
Law ○Jury determines facts, and the judge decides the sentence.
Syste
m

Civil ○Inquisitorial system with proactive judges questioning witnesses.

Law
Syste ○Emphasizes judge-led evidence collection.
m

Legal
Syste
m in
○Civil law jurisdiction influenced by Roman, French, and Egyptian Laws.
UAE
 Exploring the Complexities of the UAE Legal System
Unified Sovereign State
1. Formed in December 1971,
UAE comprises 7 emirates: Abu
Dhabi, Dubai, Sharjah, Ras al
Khaimah, Ajman, Um al Quwain,
and Al Fujairah.
Economic Evolution
1. Transitioned from a dominant
player in pearling to a major
global oil exporter.
2. Adapted to changing market
conditions, fostering economic
diversification.
Judicial System
1. Predominantly based on Islamic
Sharia’s Jurisprudence.
2. Heavy influence from European
civil laws, impacting both criminal
and civil aspects.
3. Direct influence restricted to
social regulations such as divorce,
succession, and family law
Complex Legal Structure
1. Legal system unfamiliar to
Western counterparts.
2. Understanding the application
of Islamic and civil laws crucial for
minimizing business risks.
Global Economic Giant
1. Currently stands as a global
economic powerhouse.
2. Demonstrates an unwavering
interest in diverse business
opportunities.
 Islamic Shari’a vs Civil Law
Civil Law
Civil Law Overview
Shariat Law Civil Law, also known as Roman or Continental law, relies on legislative
enactments and legal codes.
Shari’a Overview Civil Law Origins and Characteristics
Shari’a (Islamic Law) and Civil Law are prominent legal systems with Traces origins to continental Europe, rooted in ancient Roman legal
widespread influence. systems.
Islamic Law Foundations Prevails in countries like France, Germany, Spain, Italy, characterized by
written legal codes.
Derived from Quran, Hadith, scholarly interpretations (ijtihad), and
legal opinions of jurists (fiqh). Emphasis on Written Codes Emphasis on Written Codes
Interpretation varies among different schools of thought (madhhabs). Fundamental legal principles recorded in comprehensive statutes or codes.
Provides a systematic framework for legal proceedings.
Scope of Islamic Law
Categorization in Civil Law
Governs personal behavior, family law, business transactions,
Legal matters categorized into specific areas like contract law, property law,
criminal law, contracts, and more.
and tort law.
Enforced in countries with an Islamic legal system, often alongside Facilitates systematic analysis and establishes a comprehensive legal
civil or common law framework.
Role of Judges in Civil Law
Judges have a limited role compared to common law systems.
Primary duty is to apply existing statutes and codes, interpreting and
enforcing rather than creating new legal principles.
Islamic Shari’a vs Civil Law in the UAE

1. The direct influence of sharia in the UAE is restricted to social laws like family law, divorce, and succession laws.
2. Today, most commercial matters are dealt with by the Civil Courts or Permanently established Arbitration Tribunals.
3. A Few Sharia Principles translated into commercial codes are:
● Charging interest is forbidden
● Sharing Risks- Since Income Via Interested is Prohibited, Investors should share in the profits/losses of an investment

4. Uncertainty in Contractual clauses is prohibited: Contracts have to be entered into with full knowledge of the terms i.e., the
amount invested by either party, and therefore the risk undertaken by them should be clear.

5. Competence: Parties to a contract must possess the legal capacity to assume the obligation set by the contract.

Consent: Mutual and free consent of the parties entering into the contract without being subjected to coercion/ Duress is Mandatory.
 Structure of the UAE Constitution

Part One: The Union, its Part Three: Freedom, Part Five: Union Part Seven: The Part Nine: The Armed
fundamental constituents rights and public Legislations, Decrees & Distribution of Forces and the
and aims. duties. the Authorities having Legislative, Executive Security Forces.
jurisdiction therein. & International
Article 1 to 12 Article 25 - 44 Jurisdictions between Article 137 - 143
Article 110 - 115 the Union & the
Emirates
Part Two: The Part Ten: Final
Fundamental social Article 120 - 125 and Transitional
and economic basis of Part Four: The Union Part Eight: The Provisions.
the union. Authorities Part Six: The Financial Affairs of
Emirates. the Union. Article 144 - 152
Article 13 - Article 24 Article 45 to 109
Article 116 - 119 Article 126 - 136
Mixed Legal System

● Integration of Sharia and Civil Law

○ Coexistence allows for the integration of Islamic principles (Sharia) and comprehensive legislation (Civil Law).
○ This integration addresses diverse legal needs, balancing religious and commercial considerations.
● Evolutionary Civil Law System
○ Civil law in the UAE has evolved through codification and modifications to meet the changing demands of domestic and foreign commerce.
○ Ensures a contemporary legal framework that aligns with global business practices.
● Dynamic Legislative Environment
○ UAE's legislative framework is known for its adaptability.
○ Ongoing progressive changes demonstrate a commitment to creating a legal environment conducive to economic growth.
● Global Common Law Influence
○ DIFC and ADGM, as common law jurisdictions, bring global norms and principles to the UAE legal landscape.
○ Enhances the international compatibility and recognition of legal practices within these zones.
● Attracting International Investments
● The mixed legal system contributes to creating a favorable environment for international investments.
● DIFC and ADGM, with their common law foundations, offer familiarity and confidence to global businesses operating in the UAE.
 Court Structure
𑇐 The main branches within the court structure are:
○ The civil branch;
Union Emirate
○ The criminal branch; &
○ The Sharia courts.
Federal Supreme Court of Cassation
Court
𑇐 UAE being a civil law jurisdiction follows a federal court
structure, where Dubai & Ras Al Khaimah also have an
independent judiciary of their own;
○ Dubai’s Judicial Structure: The Court of First
Instance, the Court of Appeal and the Court of
Cassation. [The Court of First Instance includes Court of Appeals
Court of Appeals
the Civil Court, the Criminal Court and the Sharia
Court.]
𑇐 Attorney’s appointment:
○ UAE courts accept an attorney appointed by a
litigant as per the law;
○ the attorney must prove his appointment by an Court of first instance Court of first instance
official deed/power of attorney notarized by a
public notary;
○ Subject to the law limiting appointment of foreign
practitioners in UAE.
 Federal Supreme
Court / Local Court of
Cassation
3
- Only hears cases that are unclear
within the law;
- Appeal w/in 30 days on legal
Federal / Local Court of grounds;
Appeal - Verdicts are final & binding on the
parties.

- Hears appeals on decisions of the 2

Courts of First instance;
Court of First Instance
- In the Local Judicial Structure,
appeals shall be made w/in 30 days
on legal grounds. Hears all:
- Civil cases inc. commercial debt
1 recovery cases
- Criminal cases which fall under the
Sharia Law;
- Personal status matters such as
divorce, inheritance, child abuse,
rape etc.

The Federal Supreme Court also hears matters of national interest deemed unbefitting a local
court structure like, disputes between Emirates; law constitutionality; interrogation of
Ministers/senior officials of the Union; terror threats, etc.
Jurisdictions: Onshore Mainland, Free Zone, and Offshore

● Overview of Jurisdictions
○ Understanding the nuances of Onshore, Free Zone, and Offshore Jurisdictions is crucial for navigating the legal landscape in the UAE.
● Investor Options
○ Emirates offer three options: Free Zone, Mainland Onshore, or Offshore entities.
○ Each option comes with distinct advantages and considerations for investors.
● Free Zones
○ Economic areas with preferential tax and customs rates.
○ Benefits include 100% foreign ownership, 0% corporate tax, and full repatriation of profits.
○ Over 50 free zones in the UAE.
● Mainland Companies
○ Access to local and international markets.
○ Historically required UAE nationals to hold a minimum 51% ownership in commercial licenses.
○ Amendments in 2021 promote global business attraction by eliminating the 51% rule.
● Local Sponsorship Laws
○ Introduced limitations on foreign ownership, leading to the establishment of free zones.
○ Mainland companies historically required local sponsorship for foreign investors.
● Offshore Companies
○ Cannot directly operate in the UAE but can hold shares in mainland or free zone companies.
○ Characterized by minimal physical requirements, lower cost, and exemption from VAT.
● Legal Jurisdiction
○ Mainland and free zone companies fall under federal or local courts with legal proceedings conducted in Arabic.
○ Offshore jurisdictions (e.g., DIFC, ADGM) have their own legal systems, conducting proceedings in English under common law.
● Arbitration
○ Available in both onshore and offshore jurisdictions.
○ Allows incorporation of elements from civil and common law traditions, providing flexibility in dispute resolution.
● Evolution of Arbitration
○ Growing trend with the establishment of operational arbitral institutions in the region.
○ Offers an alternative and adaptable dispute resolution mechanism.
 UAE Court System Overview

● Choice of Law
○ UAE Civil Code allows parties to agree on governing law.
○ Local onshore courts tend to apply UAE law, while DIFC and ADGM respect parties' chosen governing law.
● Language and Legal Procedures
○ Arabic predominantly used in onshore courts; English in offshore (DIFC, ADGM) courts.
○ Onshore courts favor written, inquisitorial proceedings; offshore courts follow common law procedures with oral presentation.
● Conditions for Initiating Litigation
○ Requires legal interest and capacity.
○ Legal interest considers current legal interest, potential risks, or precautionary measures.
○ Capacity pertains to individuals aged 21 or above with full mental capacity.
● Jurisdiction Criteria
○ Determined by the court's legal division and value of the claim.
○ Electronic systems, like those in Dubai, facilitate online filing, document checking, and fee payment.
● Types of Jurisdiction
○ Vary based on legal entity, real estate, inheritance, commercial disputes, and other specific matters.
● Initiating Legal Proceedings
○ Plaintiff submits a statement of claim and relevant documents to the Case Management Office.
○ Documents must be in Arabic or translated by an approved legal translator.
● Enforcement of Foreign Judgments
○ Requires attestation by the UAE Ministry of Foreign Affairs and International Cooperation.
● Court Proceedings
○ Written pleadings heavily relied upon; oral hearings are rare.
○ Experts appointed by the court from an approved list.
● Application of Foreign Law
○ Express foreign law clauses rarely applied in practice.
○ Exceptions in commercial agency, real property, employment, government contracts, and some insurance matters.
● Practical Considerations
○ No guarantee of consistent interpretation even if foreign law is applied.
○ Each case decided on its merits; judgments of higher courts not binding on lower courts.
 Summary Judgment and Interim Relief Procedures
● Summary Court Jurisdiction
○ Handles urgent matters requiring immediate attention.
○ Focuses on interim reliefs, especially attachments over assets or funds.
● Types of Temporary Reliefs
○ Precautionary attachments and travel bans commonly sought.
○ UAE law outlines the scope, acceptance criteria, and circumstances for pursuing interim relief.
● Claimant's Right to Petition
○ Claimant can approach the summary court for interim remedies against the defendant.
○ Must substantiate reasonable concerns about the debtor retaining assets or leaving the country.
● Procedures for Interim Relief
○ Urgent nature allows direct approach to the summary court.
○ Claimant provides a detailed statement outlining assets, reasons for concerns about the debtor.
● Swift Decision-Making
○ Judge renders a final decision within one day.
○ Evaluation focuses solely on legitimate concerns justifying interim relief.
○ Judge may request additional information, conduct a swift inquiry, or liaise with relevant authorities if necessary.
● Appeal Process
○ Claimant or defendant can appeal the judge's decision.
○ Appeal can be made before the same court or the substantive court.
● Substantive Claim Filing
○ If interim relief is granted, claimant must file the substantive claim within eight days.
○ Failure to do so results in dismissal of the application.
● Ensuring Timely Action
○ Emphasizes the need for prompt filing of the substantive claim to uphold the granted interim relief.
 Deadlines & Time Bar
● Deadline for Legal Action
○ UAE law imposes deadlines for submitting claims or pursuing legal actions, treating time bar concerns separately.
○ Failure to comply with these deadlines without a valid explanation leads to forfeiture of the right to pursue the claim.
● Gregorian Calendar Basis
○ Days and dates follow the Gregorian calendar.
○ If the last day falls on a public holiday or non-working day, the restriction extends to the first working day after that.
● Examples of Time Bars
○ Contracts (non-commercial): 15 years from the date of awareness of the breach.
○ Contracts (commercial): 10 years from the due date of obligations.
○ Employment disputes: One year from the end of the employment contract.
○ Civil guarantees: Six months from the due date of outstanding payments.
○ Tort: Three years from the date of harm or awareness of damages.
○ Insurance disputes: Three years from the date of rights.
● Common Sense Application
○ Recognizes that remaining silent for the designated period implies a level of negligence.
○ Uses limitation periods to establish and maintain stability in legal positions.
○ Aims to discourage negligence and ensure timely legal actions.
Enforcement of Judgments and Awards

● Enforcing Onshore Court Judgments

○ Must be final and certified by the Execution Court for enforcement in onshore jurisdictions.
○ Execution fee (e.g., 1% of the claimed value in Dubai) payable to initiate the enforcement process.
● Execution Steps by Judgment Creditor
○ Notice served on the debtor to pay within 15 days.
○ Various enforcement steps available, including attaching and selling assets, releasing secured amounts, and inquiring about debtor's assets.
● Challenges and Appeal Process
○ Judgment debtor can challenge execution proceedings, leading to multiple hearings.
○ Verdict from challenge proceedings may be subject to appeal, temporarily halting ongoing enforcement measures.
○ Appeal process can be used as a tactic to prolong execution timelines.
● Enforcing Foreign Judgments
○ UAE is a signatory to treaties impacting the enforcement of foreign judgments.
○ Party seeking enforcement initiates the process by submitting a petition for an execution order.
○ Challenges arise due to varied conditions in treaties, allowing local authorities to scrutinize enforcement conditions case by case.
● Conditions for Executing Foreign Judgments
○ No applicable treaty: Execution under conditions provided by the laws of the foreign state.
○ Conditions include the absence of exclusive jurisdiction by UAE courts, competence of the foreign court, proper summons, finality of judgment, and
consistency with UAE laws and public order.
 Introduction to the DIFC Court System
● Establishment and Jurisdiction
○ Established under Dubai Law No. 12 of 2004 and DIFC Law No. 10 of 2004.
○ Jurisdiction designed for flexibility, efficiency, and international standards.
● DIFC Courts Overview
○ Competent for DIFC and its operations, civil/commercial issues, and agreed-upon disputes.
○ No criminal jurisdiction; refers criminal matters to external local authorities.
● Jurisdiction Expansion
○ Originally limited to DIFC disputes; expanded in 2011 to include civil/commercial cases by mutual agreement.
○ Remedies include damages, compensation, restitution, and disgorgement.
● Services Offered
○ Registration of Practitioners, e-Bundle, Probate, Pro Bono Programme, Arbitration Suites, and more.
○ All legal proceedings and documents in English.
● Court Structure
○ Small Claims Tribunal (SCT), Court of First Instance, and Appeal Court.
○ First Instance divisions include digital economy, arbitration, technology and construction, and civil and commercial.
● Digital Economy Court
○ Special court for local and international disputes in emerging technologies (e.g., big data, blockchain, robotics).
● Wills Service
○ Allows non-Muslims to transfer assets through various will types (Full Will, Property Will, Financial Assets, Business Owners Will).
● Implementation of DIFC Court Judgements
○ Recognized globally as a strong enforcement regime.
○ Judgements enforced through treaties, conventions, and reciprocal agreements locally, regionally, and internationally.
● Enforcing Local Judgments
○ Limited appeal rights in DIFC courts benefit creditors in enforcement actions.
○ Reciprocal enforcement protocol with onshore Dubai under the "Judicial Authority Law."
● Enforcing Foreign Judgments
● Engages in reciprocal enforcement agreements with foreign courts.
● Presumption that a foreign judgment is conclusive; restricted objections to enforcement include lack of jurisdiction, non-finality, and non-liquidated sum.
● Enforcement of Arbitral Awards
● Process initiated with an application to DIFC Courts for recognition.
● Grounds for refusal aligned with New York Convention Grounds.
● Foreign award creditor can enforce a DIFC Court order in onshore Dubai under the Judicial Authority Law.
 Introduction to the ADGM Court System
● Introduction to ADGM
○ Abu Dhabi Global Market (ADGM): Financial-free zone with its own laws and courts.
● Legal System
○ Common-law courts based on English court system within a civil law Middle East region.
○ Direct application of English law in ADGM, a first in the Middle East.
● Court Structure
○ Court of First Instance and Court of Appeal.
○ Divisions: Civil, Employment, and Small Claims.
● Legal Framework
○ ADGM Courts’ Regulations, unified statute, complemented by Rules and Practice Directions.
● Jurisdiction of Court of First Instance
○ Civil or commercial cases involving ADGM, its authorities, and registered entities.
○ Contracts or transactions within ADGM.
○ Appeals against ADGM Authorities' decisions.
○ Requests under ADGM Regulations.
● Opting In or Out
○ Parties in contracts can 'opt out' or 'opt in' to ADGM jurisdiction.
● Jurisdiction of Single-Judge First Instance Court
○ Civil or commercial disputes in ADGM or its authorities.
○ Disputes related to contracts or transactions in ADGM.
○ Appeals against decisions by global market authorities.
● Jurisdiction of Three-Judge Appeal Court
○ Appeals against judgments or awards.
○ Interpretation of global market laws and regulations.
○ Final judgments with no further appeal.
● Types of Cases Heard
○ Commercial and contract disputes.
○ Tort cases, personal injury cases, judicial review cases.
○ Applications for recognition and enforcement of arbitral awards.
● Jurisdiction Limitations
○ ADGM Courts cannot hear criminal cases or family cases (governed by Sharia).
● Available Remedies
○ Range of remedies: injunctions, specific performance, damages, receivership, debtor-specific remedies, relief against forfeiture, and damages for personal injuries.
○ Specific remedies available in judicial review cases.