Legal Inclusivity in the UAE: Examining Abu Dhabi’s Civil Marriage Law and Jurisdictional Evolution

The United Arab Emirates (“UAE”), known for its openness and diversity, is home to a population that includes a wide range of nationalities and cultures. In recognition of this demographic reality, the UAE has shown a clear commitment to ensuring that its legal framework reflects inclusivity and safeguards the rights of all residents, regardless of nationality or religion. A notable example of this approach is the enactment of Law No. 14 of 2021 Regarding Civil Marriage and Its Effects (as amended) in the Emirate of Abu Dhabi (“CMEAD”).

 

This law represents a significant shift in the regulation of personal status matters, particularly for non-Muslim residents, and positions the UAE as a legal pioneer within GCC and the Arab world. The CMEAD adopts a progressive stance on civil marriage, divorce, and succession issues, setting a new standard in family law legislation. This inBrief examines the core objectives of the CMEAD, analyses the impact of its amendments on jurisdictional scope, and highlights selected judicial applications that reflect its evolving interpretation.

 

Core Objectives of the CMEAD

 

The CMEAD was enacted with several strategic aims:

 

> To establish a modern judicial framework for adjudicating personal status disputes involving foreigners.

 

> To position Abu Dhabi as a regional legal innovator, being among the first jurisdictions in the Arab world to adopt civil legislation regulating family matters in line with international best practices.

 

> To provide culturally and linguistically accessible procedures, allowing individuals to engage with a legal system aligned with their backgrounds and expectations.

 

> To promote the best interests of children, especially in divorce proceedings, by emphasizing shared parental responsibility and equal treatment.

 

These objectives are particularly significant given the prior legal landscape, where foreigners were typically subject to the Muslim personal status law unless they proactively requested the application of their national law – a burdensome process involving translations, legalizations, and complex procedures. The CMEAD thus offers a practical, accessible, and inclusive alternative not only for non-Muslim residents but potentially for Muslim residents as well, as discussed below.

 

Expanding the Scope: Amendments to the CMEAD

 

While legislative amendments often arise in response to implementation challenges, the CMEAD underwent substantial revisions prior to its effective date, reflecting a proactive legislative vision.

 

One of the key amendments involved renaming the legislation from the “Law on Personal Status for Non-Muslim Foreigners” to the more inclusive “Law on Civil Marriage and Its Effects.” Furthermore, references to “non-Muslim foreigners” were replaced by the term “persons addressed by the provisions of this law,” defined to include “citizens or foreigners, non-Muslim, male or female.” This expanded language suggests an intentional broadening of the law’s applicability.

 

The 2022 Executive Regulations provide further clarity. Article 5 outlines the categories of persons covered by the CMEAD, which include:

 

> Non-Muslim citizens;

 

> Foreigners whose home countries do not primarily apply Islamic Sharia in personal status matters;

 

> Special cases determined by administrative decision.

 

This amendment indicates that the CMEAD is no longer limited to non-Muslim foreigners but may also extend to Muslim foreigners from countries where Sharia is not the dominant legal framework for personal status. This distinguishes it from Federal Law No. 41 of 2022 on Civil Personal Status, which remains limited to non-Muslims and applies across other Emirates.

 

Judicial Application of the CMEAD

 

The practical application of the CMEAD has been shaped significantly by judicial interpretation, with Abu Dhabi courts demonstrating flexibility and a commitment to the inclusive spirit of the law.

 

One notable area of application is wills and succession. Courts have confirmed that both non-Muslim citizens and foreigners from non-Sharia-based jurisdictions may freely dispose of their estates under the CMEAD, provided the will is valid and officially registered. Where no Will exists, and no heir requests the application of a foreign law, the default CMEAD rules apply. These include:

 

> Equal division of the estate among heirs, regardless of gender;

 

> The surviving spouse receives half of the estate;

 

> The remaining half is divided equally among children;

 

> In the absence of children, the estate passes equally to parents, or to siblings if the parents are deceased.

 

Additionally, the courts have acknowledged the right of Muslim foreigners, in certain cases, to opt into the CMEAD’s provisions, including in the drafting of Wills and adjudication of family law matters. This represents a significant step away from a rigid application of Sharia-based inheritance rules and underscores the judiciary’s role in supporting legislative reform.

 

Conclusion

 

The CMEAD reflects the UAE’s broader commitment to building a legal system that embraces diversity and protects individual rights irrespective of nationality or religion. Through its inclusive objectives, broadened jurisdictional scope, and progressive judicial interpretation, the law marks a transformative shift in the regulation of family matters.

 

By providing a civil legal framework that is accessible, culturally sensitive, and internationally aligned, the CMEAD positions Abu Dhabi – and the UAE more broadly – as a leader in legal modernization within the region. It stands as a model for how jurisdictions can reform family law to reflect the realities of globalized, multicultural societies while maintaining legal clarity and social cohesion.

DIFC Courts awards rare ‘additional damages’ for the loss suffered due to the defendant’s failure to pay

The DIFC Court, in an immediate judgment issued on 11 July 2025 by Justice Sir Jeremy Cooke in 7Ci Technologies V Liberty Steel Group Holdings EMEA Ltd [2025] DIFC CFI 003, granted the claimant ‘additional damages’ for non-payment, in addition to statutory interest on the basis that the foreseeability standard was met, and that the non-payment caused a greater loss. The general remedy for non-payment, as set out in Articles 17(1) and (2) of the DIFC Law of Damages[1], is for the aggrieved party to be awarded interest at the average bank short-term lending rate available to prime borrowers:

 

Article 17 Interest for failure to pay Money

 

(1) If a party does not pay a sum of Money when it due, the aggrieved party is entitled to interest upon that sum from the time when payment is due to the time of payment, whether or not the nonpayment is excused.

 

(2) The rate of interest shall be the average bank short-term lending rate to prime borrowers prevailing for the currency of payment at the place for of payment.

 

However, Article 17(3) also allows the aggrieved party to be awarded “additional damages if the non-payment caused it a greater loss”, subject to the foreseeability standard of Article 12 of the same law. Article 12 codifies the English law test of foreseeability, as set out in Hadley v Baxendale [1854] EWHC Exch J70:

 

Article 12:

 

The non-performing party is liable only for loss which it foresaw or could reasonably have foreseen at the time of its non-performance as being likely to result therefrom.

 

In a rare instance, the DIFC Courts awarded the claimant additional damages under Article 17(3) for losses arising purely from non-payment of money.

 

HE Justice Sir Jeremy Cooke held that the Claimant in this case demonstrated that the additional damages it suffered, in the form of legal costs incurred as a result of a claim brought by a third-party supplier, were reasonable and foreseeable, and therefore payable by the Defendant:

 

[17]. An examination of the evidence and the exchanges between the parties shows that the Defendant was well aware of the Claimant’s liquidity difficulties and the need for it to pay the Sentinel providers with funds provided by the Defendant. The Claimant, as revealed by the WhatsApp messages, made its position clear and the fear that the absence of payment by the Defendant might cause the Claimant itself to go into insolvency. Its inability to borrow funds and to pay the supplier, and the risk of suit by the supplier, was clearly foreseeable by the Defendant. […]. I conclude that the requirement of foreseeability is met in respect of the costs incurred in settling the supplier’s claim and that, therefore, in addition to interest payable on the sums due, the sum of [legal costs] is recoverable as damages in respect of those legal costs.

 

This case demonstrates the DIFC Courts’ willingness to uphold contractual terms between parties and to ensure that an aggrieved party is put in the same position as it would have been if not for a breach of those terms.

 

Afridi & Angell acted for the successful claimant and instructed Mark Rainsford KC for the hearing. ■

 

[1] DIFC law 7 of 2005.

UAE Increases Regulation of Influencers and Finfluencers: New Rules for Violations and Penalties of Media Content

The influencer and digital content creation industry has witnessed significant growth in the UAE, prompting the introduction of new regulations by UAE authorities. A key piece of legislation in this space is the Media Law (Federal Decree-Law 55/2023), which came into force on 1 December 2023, and its implementing regulations (Cabinet Resolution 68 of 2024), which expand the legal framework beyond traditional media to include content creators, influencers, advertising agencies, and digital platforms. To supplement the Media Law, two new regulations have been issued recently: (i) Cabinet Decision 41/2025 updating the fee structure for media services; and (ii) Cabinet Decision 42/2025 establishing the list of violations and penalties for breaches of the Media Law, both of which came into effect on 29 May 2025.

 

This represents a wider move by the regulators to push for structure and accountability across digital content creation platforms, including the recent regulation of “finfluencers” (i.e., financial influencers) by the Securities and Commodities Authority (SCA) under Decision 10/RM/2025.

 

This inBrief focuses on media content violations and penalties, and the regulation of “finfluencers.”

 

Media Content Violations and Penalties under Cabinet Decision 42 of 2025

 

Notably, this decision applies not only to content creators based in the UAE but to all individuals and entities engaged in media activities across both mainland UAE and its free zones. This includes content creators on social media platforms, influencers, and advertisers. The decision outlines the violations of the Media Law and corresponding penalties across two schedules:

 

1. Schedule 1 targets violations related to the licensing of media activities. For example, advertising without a permit, providing false or misleading information to obtain a license or permit, and violating the conditions of advertising content through social media platforms. Penalties for violations under Schedule 1 range from written warnings to fines up to AED 100,000, with higher penalties applicable for repeat offences.

 

2. Schedule 2 targets a wider list of violations of the “media content standards.” Those violations are classified into three categories and are ranked by severity from first to fourth degree.

 

(i) Category (a): covers eight violations with penalties ranging from AED 30,000 to AED 1,000,000, which include:

 

– disrespecting God, Islam or other religions, the UAE’s regime, its institutions and policies;

 

– publishing content that may harm the foreign relations of the UAE;

 

– publishing content that offends the UAE’s national unity, including the UAE’s legal, economic and judiciary systems; and

 

– inciting sectarian or regional strife, violence, hatred and terrorist acts, or spreading discord and animosity within society.

 

(ii) Category (b): covers five violations with penalties ranging from AED 20,000 to AED 150,000, which includes, among others:

 

– disrespecting the UAE’s culture and heritage, offending community values, or infringing on the privacy and private life of individuals;

 

– publishing content that incites the commission of crimes, including rape, murder, and use of narcotic drugs; and

 

– publishing content that offends the UAE’s national currency or economic status.

 

(iii) Category (c): covers seven violations with penalties ranging from AED 5,000 to AED 100,000, including:

 

– broadcasting, publishing or sharing fake news or rumours, or content/opinions that breach public morals, corrupt the morals of the youth or promote destructive thoughts;

 

– failing to host appropriate individuals for interviews in media outlets;

 

– disrespecting the UAE’s culture, identity or values in advertisements; and

 

– failing to adhere to the age classification requirements for artistic works, and respect children’s rights under UAE legislation.

 

New Committee for Content Oversight

 

A permanent ‘Committee for the Violations of the Media Content Standards’ (the Committee) has been established under the UAE Media Council to oversee and assess violations and penalties. The Committee is responsible for identifying violations of media content standards within the UAE and for enforcing the administrative penalties. Content creators, influencers, or advertisers will be formally notified by the Committee of any violation, and will be given a timeframe to modify or remove the offending content.

 

For violations listed in Schedule 2, the Committee will take into account the impact of the violation when determining the severity of the penalty. A mechanism is available to contest the penalties imposed by the Committee, which may be filed with the UAE Media Council or the competent authority (i.e., local government entity concerned with the licensing of media activities).

 

Regulation of Finfluencers under the SCA Decision 10/RM/2025 (SCA Decision)

 

In parallel, the SCA issued a decision for the regulation of finfluencers’ activities, which came into effect on 21 May 2025. The regulations mandate that finfluencers must register with the SCA before advertising for or conducting any of the financial activities which are covered by the regulations, subject to the conditions outlined under Article 3, which include, among others: to be an independent financial analyst accredited by the SCA, or to hold a CFA certificate and to be an influencer among market traders subject to a specific criterion set out under Article 3(2). Engaging in activities that fall within the scope of the regulations without registration may result in fines or blacklisting by the SCA.

 

The regulations apply to any person registered with the SCA in mainland UAE who provides a financial recommendation to the public, related to domestic or foreign issuers[1], financial products, virtual assets, or financial services inside or outside the UAE. The regulations also apply to issuers and entities licensed by the SCA if they enter into a contract with a finfluencer.

 

In addition to obtaining registration with the SCA, finfluencers’ obligations include disclosure of financial interests and paid partnerships, avoiding misleading or biased content, and distinguishing between facts, opinions, and promotional material. Issuers of financial products and licensed entities are also under an obligation to vet any such content before publication by a finfluencer. The regulations do not apply to the publication of information previously approved by the SCA or persons providing financial recommendations within a UAE financial free zone.

 

Why this matters to content creators, influencers and finfluencers?

 

The message is clear. The UAE expects greater professionalism and accountability from digital content creators as well as finfluencers. These recent changes not only broaden the applicability of the regulations to include digital platforms, social media content creation, and advertising agencies, but also impose strict guidelines and penalties for non-compliance. Influencers, finfluencers, marketing and advertisement teams and digital platforms should seek legal guidance regarding their exposure to liability under the newly implemented regulations. With regulators monitoring and overseeing what is said and how it is said, compliance with applicable regulations is the strongest safeguard. ■

 

[1] Article 1 of the SCA Decision, defines an ‘Issuer’ as “a legal person established inside or outside the State, or within a financial free zone in the State, that offers, issues, or lists financial products within the State or on the market.”

Building a Mediation Culture in the UAE: Key Legal Reforms

The UAE continued its efforts to promote mediation as a form of dispute resolution through Cabinet Decision No. 56 of 2025, which regulates the establishment of private mediation centres and branches of foreign mediation institutions in the UAE. This follows the enactment of Federal Decree Law No. 40 of 2023, the UAE’s first standalone legislation on mediation and conciliation in civil and commercial disputes, and the UAE’s accession to the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention on Mediation) in May 2024.

 

The Law

 

Federal Decree Law No. 40 of 2023:

 

– applies to civil and commercial disputes, unless excluded by law;

 

– does not apply within the UAE’s financial free zones (the DIFC and the ADGM), unless a mediator or mediation centre based in the financial free zone is mediating a dispute that relates to the UAE mainland;

 

– allows for mediation to deal with the subject matter of the dispute as a whole or a part thereof;

 

– allows for mediation to be either voluntary (by agreement) or court-directed during litigation;

 

– encourages frank discourse and good faith attempts at settlement by ensuring that the statements, proposals, admissions, documents, and information disclosed or exchanged during the mediation process are strictly confidential and cannot be disclosed in any subsequent contested proceedings, except in limited circumstances; and

 

– provides that settlement agreements reached through mediation, once ratified by a court, are enforceable as judgments of the court.

 

Criminal, labour, rental, and personal status disputes, urgent or interim orders and matters of public order cannot be the subject of mediation conducted under the mediation and conciliation centres established under the law. However, it preserves the parties’ right to seek urgent or interim judicial relief from the competent court.

 

The Cabinet Decision

 

Cabinet Decision No. 56 of 2025 regulates the licensing of private mediation centres and branches of foreign mediation centres in the UAE, but does not apply to private mediation centres and foreign branches that are licensed to operate in the financial free zones, unless they conduct their activities outside the financial free zone. Key requirements for licensing include:

 

– obtaining prior approval from a committee within the Ministry of Justice or local judicial authority;

 

– obtaining a license from the Competent Authority in each Emirate;

 

– establishing an independent office with adequate IT systems and insurance cover;

 

– appointing a qualified Director with legal or mediation experience; and

 

– maintaining both a public register of mediators and an internal electronic register.

 

Additionally, a foreign mediation centre wishing to establish a branch in the UAE must also provide proof that it has provided mediation services for at least five years at the time of submitting the application to open a branch in the UAE.

 

Why it matters to businesses

 

Mediation is increasingly recognised as an effective means of dispute resolution, not only due to its cost-efficiency, but also in terms of preserving relationships between commercial parties, which often deteriorate in the course of contentious litigation or arbitration proceedings. Until recently, the absence of a legal framework supporting mediation deterred certain parties from opting for mediation, particularly due to the lack of legal safeguards regarding confidentiality of information submitted in the course of mediation and its use in subsequent legal proceedings, should mediation fail. Following the legislative developments set out above, the UAE now has a robust legal framework for mediation, and with the Cabinet Decision clarifying the requirements to establish mediation centres (and branches of foreign mediation centres) in the UAE, one hopes that parties will soon have access to experienced mediators in the UAE.

 

However, it is important for parties to bear in mind that mediation is not appropriate for the resolution of all disputes, and contracts providing for alternative dispute resolution mechanisms such as mediation must be carefully drafted. For example, mandatory mediation may not be effective where the relationship between the parties has irretrievably eroded, and having a provision for mandatory mediation may only serve to delay the parties in getting to a final resolution of their dispute. Provision for optional mediation (bearing in mind that parties may voluntarily agree to mediation during the course of most adversarial proceedings), on balance, appears to be a better approach. ■

Reform of Dispute Settlement in Dubai: Decision No. (4) of 2025 on the Jurisdiction of the Centre for Amicable Settlement of Disputes

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. ■

Arbitration (UAE chapter), Lexology Panoramic

This Q&A provides a multi-jurisdictional in-depth understanding of Arbitration. This particular chapter explores the UAE process and challenges faced when considering Arbitration as a course of action. The chapter covers a broad spectrum of truths, a sample of topics covered are as follows; laws and institutions, arbitral proceedings, jurisdiction and competence of arbitral tribunal, interim measures and sanctioning powers and updates and trends.

Litigation and Enforcement in the United Arab Emirates

A Q&A guide to dispute resolution law in the United Arab Emirates.

 

The country-specific Q&A gives a structured overview of the key practical issues concerning dispute resolution in this jurisdiction, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.

Arbitration Procedures and Practice in the UAE: Overview, Practical Law Global Guide

A Q&A guide to arbitration law and practice in the United Arab Emirates.

 

The country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in this jurisdiction, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts’ willingness to assist arbitration, enforcement of awards and the available remedies, both final and interim.

Weathering the April Storms: Where will the burden fall under UAE law?

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. ■