Tag: Dispute Resolution

Advancing Dispute Resolution in Dubai: Strengthening ADR for a More
Inclusive Legal Future:

 

Alternative Dispute Resolution (“ADR”) has become a cornerstone of
modern legal systems, offering faster, more cost-effective, and flexible
pathways for resolving disputes outside traditional court structures. In
keeping with this global trend, Dubai established the Centre for Amicable
Settlement of Disputes (the “Centre”) under Law No. 16 of 2009, aiming to
promote consensual dispute resolution and reduce the burden on the
judiciary.

 

Reflecting the rising significance of ADR and a continued drive for
procedural reform, the President of Dubai Courts issued Decision No. (4) of
2025 (the “Decision”), published on 26 March 2025. This Decision repeals
and replaces Decision No. (8) of 2022 and introduces a more refined
jurisdictional framework for the Centre. It also signals a broader legislative
intent to promote social justice by enhancing access to dispute resolution
mechanisms for people of determination, senior citizens, and economically
vulnerable groups.

 

This inBrief outlines the main features of Decision No. (4) of 2025, with
particular focus on the jurisdictional reallocation of estate-related property
disputes, the harmonisation of legal terminology across related legislative
instruments, the introduction of new restrictions on expert appointment
applications prior to litigation, the enhancement of procedural safeguards
for vulnerable groups, and the implications of limiting party autonomy in
selecting alternative dispute resolution pathways.

 

Key Highlights of Decision No. (4) of 2025

 

1. Jurisdictional Shift in Estate-Related Property Disputes

 

A major development under the Decision is the removal of the Centre’s
jurisdiction over estate-related property disputes. Specifically, Article 1(1)
excludes disputes involving the subdivision of co-owned undivided property
where such issues are tied to estate matters. This adjustment aligns with
Decree No. (25) of 2023, which established the Probate Court and granted it
exclusive authority over estate-related claims, including those concerning
co-owned property.

 

This jurisdictional transfer consolidates estate litigation within a specialised
forum that is better equipped to handle the sensitive nature of family and inheritance disputes. The Probate Court’s innovative procedural tools and
focused mandate are intended to preserve familial harmony while resolving
complex legal issues efficiently.

 

2. Harmonisation of Legal Terminology

 

The Decision reaffirms the Centre’s authority to ratify conciliation
agreements, regardless of the claim’s value—a principle retained from the
previous 2022 Decision. However, the language has been updated to reflect
terminology used in Law No. (18) of 2021 Regulating Conciliation in the
Emirate of Dubai. This alignment promotes greater legal consistency and
clarity, particularly in defining a “Conciliation Agreement” as one reached
under the guidance of a Conciliator following the procedures laid out by
law.

 

This terminological harmonisation ensures coherence across legislative
instruments, facilitating smoother legal interpretation and application.

 

3. Narrowing the Scope of Expert Appointment Applications

 

The Decision introduces clearer conditions for the Centre’s jurisdiction over
expert appointment requests prior to litigation. Now, such applications are
only accepted if:

 

– The dispute falls within the jurisdiction of Dubai Courts

– The matter is not already pending before a court

– The issue has not been previously adjudicated

 

These restrictions are a departure from the broader scope under the 2022
Decision, which permitted expert appointments without such limitations.
The Centre previously rejected jurisdictional objections, such as those
based on arbitration clauses, on the grounds that applications for the
appointment of an expert do not constitute formal substantive claims. As
such, these applications were considered not to affect jurisdictional
objections, which could instead be raised once a substantive case was
formally filed before the court.

 

Based on the Decision, the Centre can no longer entertain expert requests
for disputes subject to arbitration clauses or those already before the
courts. While the goal is to streamline case flow and eliminate duplication,
this change may limit access to neutral, pre-litigation expert assessments—
often crucial for parties seeking early clarity. We will have to wait and see
how the Centre will practically address this situation in order to have a
definitive answer.

 

4. Expanded Jurisdiction to Protect Vulnerable Groups

 

The Decision expands the Centre’s jurisdiction to include specific categories
of vulnerable individuals. These include disputes involving Emirati citizens
aged 60 and above, provided the claim value does not exceed AED 1,000,000;
cases where one of the parties is a person with a disability; and matters
involving female beneficiaries of financial assistance under Law No. (7) of
2012.

 

These reforms signal a clear legislative intent to enhance access to justice
for communities that may face legal and procedural barriers. By explicitly
prioritising the needs of the elderly, people of determination, and
economically disadvantaged women, the law promotes inclusivity, fairness,
and social equity in legal processes.

 

5. Restriction of Party Autonomy in Referring Disputes

 

One of the more notable changes in the 2025 Decision is the removal of the parties’ ability to jointly refer disputes to the Centre, even if the dispute fell outside its formal jurisdiction. This flexibility, previously allowed under Decision No. (8) of 2022, is no longer available.

 

Now, access to the Centre is limited to cases where a conciliation agreement already exists and is submitted for ratification. While it may be aimed at procedural clarity, it restricts parties’ autonomy to voluntarily opt for ADR through the Centre, potentially narrowing the avenues for early dispute resolution.

 

Conclusion

 

Decision No. (4) of 2025 reflects Dubai’s continued efforts to modernise and strengthen its dispute resolution infrastructure. By refining jurisdictional boundaries, unifying legal terminology, and offering increased protections for vulnerable groups, the Emirate demonstrates a forward-looking commitment to justice that is both efficient and inclusive.

 

While some changes, such as restrictions on expert appointments and the removal of mutual referral flexibility, may limit certain procedural options, they also aim to streamline access to the appropriate forums and promote clarity in ADR processes. Overall, the Decision signifies a new chapter in the evolution of ADR in Dubai, reinforcing the Emirate’s role as a progressive legal hub in the region. ■

When TS Eliot wrote in 1922 that “April is the cruellest month” he likely never envisaged extreme weather of the proportions experienced in the UAE on the 16th of April 2024.  What, then, of the parties to a contract?  Ought they to have foreseen this and catered for it in the terms of their agreement? And how should the inevitable losses caused be allocated between them under UAE law?  As the UAE continues its recovery, contracting parties across all commercial sectors will likely be considering these questions very carefully.

 

The starting point, as always, will be the terms of the contract itself.  However, in the absence of the parties reaching an agreement as to what these require, Article 249 of the UAE Civil Code will undoubtedly feature prominently in any dispute. Article 249 provides (in translation) as follows:

 

“If exceptional circumstances of a public nature which could not have been foreseen occur as a result of which the performance of the contractual obligation, even if not impossible, becomes oppressive for the obligor so as to threaten him with grave loss, it shall be permissible for the judge, in accordance with the circumstances and after weighing up the interests of each party, to reduce the oppressive obligation to a reasonable level if justice so requires, and any agreement to the contrary shall be void.”

 

James Whelan, writing in the Ministry of Justice’s Commentary on the UAE Civil Code, regards this provision as an exception to the general rule that it is not the function of the judge to create or vary contracts on behalf of the parties and states that the UAE legislature has restricted its application to cases of “unforeseen emergencies”.

 

The application of Article 249 of the UAE Civil Code is conditional upon the occurrence of an “exceptional emergency (or event) of a public nature” that could not have been foreseen at the time the contract was formed, and which renders performance of the obligation in question burdensome or onerous, but not impossible.  An event of a “public” nature means that it affects the entire industry or economy rather than a particular venture or project. Al Sanhouri offers useful examples of what may constitute “exceptional emergencies” such as earthquakes, wars or an epidemic, and floods are specifically included on this list.

 

In UAE law, “exceptional emergencies of a public nature” for the purposes of Article 249 are to be contrasted with “force majeure events” as stated in Article 273 of the UAE Civil Code.  Whereas force majeure events render the performance of an obligation impossible and result in the termination of the obligation, “unforeseen emergencies of a public nature” render the performance of contractual obligations “onerous and excessive … without reaching the level of impossibility” and “result only in the reduction of the obligation to a reasonable level and the consequences are thus borne by the obligee and the obligor”.

 

Article 249 is a mandatory provision which UAE law precludes contracting out of.  Parties to contracts governed by UAE law will therefore need to consider, honestly and realistically, the impact of the April Storms on the performance of their own and each other’s obligations to determine whether (and, if so, to what extent) Articles 249 and 273 might apply.

 

Obligors tempted to argue that Article 249 applies and that the performance of an obligation that has become more onerous should consequently be reduced by the court to a more reasonable level will need to remember that an increased burden of itself is insufficient: performance must carry with it the threat of “grave loss” before the principle bites.

 

Similarly, it would obviously be tempting for an obligee, seeking to resist an application under Article 249, to attempt to argue that the relevant event was foreseen (or was at least of a type that could or ought to have been foreseen) and that therefore the judicial discretion is simply not engaged.  To contend, for example, that even if this particular storm was not foreseen at the time the contract was formed the contract already speaks to what happens in the event of extreme adverse weather in general and therefore the parties can be taken to have envisaged these sorts of circumstances.

 

However, these arguments would not only be contrary to both the letter and the spirit of the Code itself but are also at odds with the relevant principle of Islamic Shariah law (Udur) from which Article 249 is derived.

 

Article 249 is engaged when, despite the circumstances, the terms of the contract prima facie continue to require performance by the obligor but this would cause him grave loss.  Even if a contract contains terms specifying how the risk of extreme weather events is to be borne, Article 249 enables the Court to step in and “reduce the oppressive obligation to a reasonable level if justice so requires”, and any agreement to the contrary shall be void.

 

The dispute resolution team at Afridi & Angell practices in English and Arabic, and is well-equipped to advise on bringing and defending Article 249 applications across the full range of commercial sectors in litigations and arbitrations both onshore and offshore. ■

The Commission for the Unification of Federal and Local Judicial Principles (the “Commission”) recently issued a number of decisions aimed at harmonising certain “judicial principles”. Since the doctrine of stare decisis is not followed in the UAE, there have been instances of incongruities in the application of law by the UAE courts. The Commission was established under Federal Law 10 of 2019 (the “Federal Law”), recognising a need to avoid such inconsistencies.

 

In terms of Article 18 of the Federal Law, decisions of the Commission are binding on all on-shore courts of the UAE, including courts of emirates which are not part of the federal judicial system (Abu Dhabi, Dubai, and Ras Al Khaimah) – with the fail-safe that an inconsistency between a judgment and a “judicial principle” recognised by the Commission may constitute a ground for appeal of a judgment which otherwise would be final. Requests for unification of judicial principles can be submitted by the heads of supreme courts in the UAE, the federal public prosecutor, and local prosecutors.

 

The following are some of the key decisions issued by the Commission.

 

Scope of Article 667 of the Commercial Transactions Law (enabling direct execution proceedings for cheques dishonoured for insufficient funds) expanded to include cheques dishonoured due to account closure

 

• In terms of Article 667 of Federal Decree Law 50 of 2022 (the “Commercial Transactions Law”), the bearer of a cheque which was dishonoured due to “unavailability” or “insufficiency” of funds is able to rely on the cheque as a writ of execution to file execution proceedings (as opposed to asserting a substantive claim) against the drawer of the cheque. This provision was introduced following the decriminalisation of the act of drawing a cheque without having a sufficient balance in the account to honour the cheque. Readers are reminded that not all acts concerning cheques were decriminalised.

 

• The Commission has expanded the scope of Article 667 of the Commercial Transactions Law to include instances where a cheque is dishonoured due to an account being closed. Therefore, bearers of cheques which are dishonoured for this reason are now able to file execution proceedings directly against the drawer for the value of the cheque.

 

• It should be noted that the act of closing an account prior to issuing a cheque or presenting it to the drawee for payment still constitutes an offence punishable by a term of imprisonment of up to two years. Therefore, until further clarification is provided, the prudent view is that this act has not been decriminalised.

 

Federal Supreme Court / Courts of Cassation power to reverse judgments extended to criminal matters

 

• In terms of Article 190 of Federal Decree Law 42 of 2022 (the “Civil Procedure Law”), the Federal Supreme Court or Court of Cassation (as applicable), is empowered to ‘reverse’ final civil judgments issued by it, on its own volition or upon an application being made by the party against whom the judgment was issued, in any of the following circumstances:

 

– if the judgment contains a procedural error committed by the court or its auxiliary bodies and such error affected the outcome of its decision or judgment;

 

– if the decision or judgment is based on an abrogated law, and the application of the correct law would have materially altered the court’s judgment; or

 

– if the judgment is issued in violation of any judicial principles prescribed by the Commission, among others

 

• The Commission has widened the ambit of Article 190 of the Civil Procedure Law to cover judgments issued by the Federal Supreme Court or Court of Cassation (as the case may be) in criminal cases.

 

Court of Appeal to decide on the substance of the claim if it declines to grant a payment order

 

• Payment Orders are mechanisms that enable a creditor to obtain summary relief where, among others, there is a confirmed debt owed to it. Prior to the current decision of the Commission, a judgment on an application for a Payment Order could be appealed to the Court of First Instance (if the value of the claim is less than AED 50,000), or to the Court of Appeal (if the value of the claim exceeds AED 50,000). If the Court of Appeal found that a Payment Order should not be granted, and absent an appeal to the Court of Cassation (available only on issues of law and where the claim exceeds AED 500,000) the applicant was required to file ordinary proceedings anew to claim its debt.

 

• Following the current decision of the Commission, if the Court of Appeal finds that a payment order should not have been granted, it must proceed to adjudicate the applicant’s claim against the counter-party as it would in ordinary proceedings.

 

• While this is advantageous to a creditor in the sense it no longer has to incur the time and expense to file ordinary proceedings anew in the Court of First Instance, it also means that the parties lose one level of appeal, unless the value of the claim exceeds AED 500,000 (thus enabling an appeal to the Court of Cassation on an issue of law). ■

Article 319(1) of the UAE Civil Procedure Law authorises an execution judge to imprison a debtor who fails to satisfy a judgment debt, unless the debtor is able to prove that he is insolvent.

 

Although the text of Article 319(1) places the burden of proving insolvency on the judgment debtor, this appears to have been reversed following a decision of the General Assembly of the Dubai Court of Cassation issued in October 2023. A judgment creditor is now required to prove that the judgment debtor is solvent before an order of imprisonment may be issued under Article 319. In its decision, the Court of Cassation refers to and codifies the principle of Islamic Sharia’ which presumes the insolvency of a debtor.

 

However, the decision maintains that Article 319(2) provides that a plea of insolvency cannot be maintained in the following circumstances:

 

a) if the debtor deliberately smuggled or concealed their assets; or

 

b) if the debt is due in instalments that the debtor has defaulted on, or if the debt arises out of a guarantee given to the court on behalf of a different debtor, except where the debtor provides evidence of new circumstances which did not exist before and which have adversely affected his financial situation.

 

This poses a significant evidentiary burden on judgment creditors, who must now prove that (a) the judgment debtor is solvent, or (b) that one of the exclusions in Article 319(2) applies in order to obtain an order for imprisonment. It also remains to be seen whether this decision would disincentivise parties from invoking the processes set out in the UAE’s bankruptcy and insolvency legislation.

 

Orders issued by the court under Article 319(1) prior to this decision have been vacated. ■