GAR Know How Litigation: United Arab Emirates

This is an extract from GAR’s Litigation Know-how.

Overview 

Describe the general organisation of the court system for civil litigation.

Onshore jurisdiction

The United Arab Emirates (UAE) legal structure has two systems – the Federal Judiciary (controlled by the Federal Supreme Court) and the local judicial departments at the local government level. Each of the Emirates is able to choose which one of the two systems to operate under.

Articles 94 to 109 of the UAE Constitution generally govern these two systems but the detail of certain principles is left to the discretion of local judicial authorities.

Abu Dhabi, Dubai and Ras Al Khaimah uphold their own judicial systems independently from the federal court system and therefore are not overseen by the UAE Supreme Court (save for certain jurisdictional disputes or where there is a dispute between the Emirates themselves). The Emirates of Sharjah, Ajman, Fujairah and Umm Al Quwain operate under the Federal Judiciary.

Dubai’s courts have three levels of courts and each court has a civil, criminal and Shari’a division.

The Dubai Court of First Instance

This Court is divided into lower courts for claims less than 10 million dirhams, decided by a single judge, and upper courts for claims over 10 million dirhams and decided by three judges.

The Dubai Court of Appeal

A judgment from the Court of First Instance can be appealed within 30 days of the date of the judgment. Judgments by the Court of Appeal are deemed final if the value of the claim is less than 500,000 dirhams and are decided by three judges.

Dubai Court of Cassation

Court of Appeal judgments may be appealed within 60 days from the date of judgment and are usually heard by five judges. Appeals against a Court of Appeal judgment can only be made in respect of matters of law. Any appeal may only be for sums in dispute in excess of 500,000 dirhams, unless the judgment does not involve a financial award. This is the highest Court from which there is no appeal.

The Dubai International Financial Centre (DIFC)

The DIFC is a common law jurisdiction within the UAE that was established under Dubai Law No.9 of 2004. Pursuant to the Judicial Authority Law 12 of 2004 (as amended), the DIFC Court has exclusive jurisdiction to hear:

• civil or commercial claims to which the DIFC is a party;
• civil or commercial claims arising from a contract finalised or performed within the DIFC;
• civil or commercial claims arising from a transaction that has been performed within the DIFC and is related to DIFC activities;
• appeals against decisions made by the DIFC; and
• any claim that the Courts have jurisdiction in accordance with DIFC Laws and Regulations.

The DIFC Courts have jurisdiction to hear any local or international cases if expressly agreed by the parties by way of contract, or if the contract involves a DIFC established party.

The DIFC Courts have three levels.

Small Claims Tribunal (SCT)

SCT allows parties to commercial contracts to represent themselves without legal representation. The parties should aim to reach a settlement before proceeding to a hearing before a judge.

The SCT deals with three types of claims: (i) claims with a value of 500,000 dirhams or less; (ii) employment-related claims where the amount does not exceed 500,000 dirhams and, provided that the parties have agreed that the SCT should hear the case, then employment-related claims in excess of 500,000 dirhams can also be heard by the SCT; (iii) non-employment-related claims where the amount in dispute does not exceed 1 million dirhams provided that the parties have agreed in writing that the SCT should hear the dispute.

Dubai Law No. 12 of 2004 (Judicial Authority Law) establishes the DIFC Courts and grants them jurisdiction. The Judicial Authority Law establishes two levels of courts; the Court of First Instance and the Court of Appeal.

By the Judicial Authority Law, the Court of First Instance has jurisdiction to hear civil or commercial claims arising from entities that are in the DIFC, licensed by the DIFC, or connected with the DIFC. The Court of First Instance can also hear claims arising out of contracts performed or concluded within the DIFC, or claims arising from activities that took place in the DIFC, The Court of First Instance also has jurisdiction to hear appeals against administrative decisions of DIFC authorities. The Court of First Instance also has jurisdiction to hear disputes arising from contracts that submit disputes to the jurisdiction of the DIFC Courts.

Court of Appeal

Per the Judicial Authority Law, the Court of Appeal is the highest authority in the DIFC. Orders and judgments are final unless there is a question of a conflict of jurisdiction between onshore Dubai courts and the DIFC.

Where there is a conflict of jurisdiction between onshore Dubai courts and DIFC Courts, either party can make a challenge that will then be decided by the Joint Judicial Committee, which was constituted in 2016 pursuant to Decree 19 of 2016 On the Formation of the Judicial Committee for the Courts of Dubai and the Courts of the Dubai International Finance Centre. Jurisdictional disputes between onshore and DIFC Courts remains a complex area of law in the UAE.

Abu Dhabi Global Market Courts (ADGM)

The ADGM is a financial free zone situated in Abu Dhabi. It was established pursuant to the UAE Constitution and UAE Federal Law No. 8 of 2004 (Financial Free Zone Law).

The ADGM has its own body of laws with an independent judicial authority and courts that deal with civil and commercial matters. Furthermore, proceedings in the ADGM Courts are governed by ADGM Courts, Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations 2015 (ADGM Regulations), the ADGM Court Procedure Rules 2016 (ADGM Rules) and the Practice Directions. They comprise a Court of First Instance and a Court of Appeal. The Court of First Instance has three divisions: (i) Civil Division; (ii) Employment Division; and (iii) Small Claims Division.

Both the DIFC Rules and the ADGM Rules in many ways resemble the English Civil Procedure Rules (the CPRs). However, there are notable differences that practitioners and parties should be aware of, for instance, disclosure (Part 13 of the ADGM Rules, see Rule 28.15 of the DIFC Rules), which differ from the English CPRs. For example, under the DIFC and ADGM rules, a party is required to give standard disclosure of documents on which it relies. These tend to be documents that help rather than adversely affect its case. However, under the English CPRs, standard disclosure requires a party to disclose documents on which it relies and the documents that adversely affect its own case (CPR 31.6).