The United Arab Emirates (UAE) provides multiple avenues for dispute resolution, including litigation and arbitration, governed by distinct judicial systems. Understanding these systems is crucial for businesses, lawyers in Dubai, and residents when drafting provisions for dispute resolution in their commercial contracts.
Overview of the UAE Court Systems
Mainland Courts
The onshore court system operates in the mainland under a civil law system and consists of three main levels:
- Courts of First Instance
- Courts of Appeal
- Courts of Cassation or Federal Supreme Court
In the lower courts, both questions of fact and law are assessed. As cases progress to the appeal and cassation levels, the focus shifts primarily to questions of law.
The emirates of Ajman, Fujairah, Sharjah, and Umm Al Quwain are part of the federal judicial system, with the Federal Supreme Court serving as the final level of appeal. In contrast, the emirates of Abu Dhabi, Dubai, and Ras Al Khaimah have independent judicial systems, with their courts of cassation acting as the final court of appeal. These onshore courts adhere to both federal and local laws, depending on the emirate where the dispute is contested.
Litigation proceedings in onshore courts are conducted in Arabic, though recent amendments have introduced English for certain courts. The onshore courts follow an inquisitorial system where the judge plays an active role in examining the matter, and proceedings are mainly conducted in writing. While Article 45 of UAE Federal Decree-Law No. 34 of 2022 provides for attorney-client privilege, other privileges, such as “without prejudice” communications, are not recognized in onshore courts.
Onshore local courts have exclusive jurisdiction over all criminal proceedings. The Emirate of Dubai has specialized mechanisms for resolving specific disputes, such as the Dubai Rental Dispute Settlement Centre (RDSC) for landlord-tenant disputes and the Dubai Health Authority (DHA) for medical complaints. Labor complaints can be filed with the Ministry of Human Resources and Emiratisation (MOHRE).
Offshore Courts
The UAE also has two primary offshore court systems operating in free zones under common law jurisdictions: the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).
DIFC Courts
Located in Dubai, the DIFC courts are independent of the local court system and operate under a common law jurisdiction. They have their own laws, rules, and procedures, and have selectively adopted the laws of England and Wales. The DIFC court system includes:
- Court of First Instance (CFI)
- Court of Appeal
The DIFC courts also have specific divisions such as the Small Claims Tribunal (SCT), Technology and Construction Court, Arbitration Division, and Digital Economy Court. The decisions of the Court of Appeal are final and binding. The DIFC courts have exclusive jurisdiction over civil or commercial claims involving the DIFC or its bodies and claims arising from contracts or transactions performed within the DIFC. Parties can agree to submit to the jurisdiction of the DIFC courts.
The DIFC SCT handles claims up to AED 500,000 for individuals and up to AED 1,000,000 for employment disputes. SCT judgments can be appealed to the CFI only under specific circumstances, such as a serious procedural irregularity.
ADGM Courts
Located in Abu Dhabi, the ADGM courts also operate under a common law jurisdiction and are independent of the local court system. They have implemented their own laws, rules, and procedures, selectively adopting the laws of England and Wales. The ADGM court system includes:
- Court of First Instance
- Court of Appeal
The ADGM Court of First Instance has divisions for small claims and civil matters and has jurisdiction over disputes involving the ADGM, its authorities, or establishments. Parties can mutually agree to enter into the jurisdiction of the ADGM courts.
Key Differences and Legal Provisions
Language and Proceedings
In onshore courts, proceedings are conducted in Arabic, with some courts adopting English. Offshore courts conduct proceedings in English, with oral arguments and witness examinations.
Privilege and Disclosure
Offshore courts recognize and protect the concept of privilege, allowing parties to resist document disclosure based on privilege. Onshore courts, however, do not recognize this concept beyond attorney-client privilege.
Interim Relief
Offshore courts offer a wider range of interim relief compared to onshore courts, providing more flexibility in the resolution process.
Statutory Time Limits
Both onshore and offshore courts have statutory time limits for litigation, which vary depending on the nature of the dispute. These limits may be waived if a lawful excuse is provided.
Conclusion
Understanding the distinct judicial systems in the UAE is essential for effective dispute resolution. Whether navigating the civil law framework of the onshore courts or the common law jurisdictions of the offshore courts, businesses and legal practitioners must be well-versed in the specific provisions and procedures to ensure compliance and achieve favourable outcomes.