The first factor to consider when a dispute arises is the correct forum in which to raise proceedings. The UAE has both onshore and offshore courts which operate differently and are governed by separate laws.
Often, parties will have entered into a contractual relationship and the agreed terms shall be documented by a contract. The contract should clearly state what should happen in the event of a dispute.
The governing law and jurisdiction of a contract will roadmap the route of the dispute. It is, therefore, important to carefully consider the governing law and jurisdiction, along with all other terms, before entering into any contractual relationship.
The Civil Procedural Law and the Executive Regulations govern the procedure of actions raised at the UAE onshore courts.
To raise an action at the Dubai courts, the claimant is required to prepare the claim and submit it to the Court of First Instance. If the claimant is legally represented, a Power of Attorney will be required to confirm that the representative has been legally appointed.
The claim and sum sued for will dictate the appropriate type of court and court circuit; minor or major. The claimant will require to raise the court filing fee in order to raise the claim. The filing fee is calculated based upon a percentage of the sum sued for, which is capped depending on the claim value.
The claim must be served upon the adverse party, the defendant, by personal service. If service is not possible by hand delivery then the Court of First Instance (CFI) may order service by alternative means.
Once the claim has been served, the defendant is provided the opportunity to file the Power of Attorney (if legally represented) and a defence to the claim. The defendant may also submit a counterclaim against the claimant, where applicable. There is no set structure of the number of pleadings to be submitted. The judge will direct parties until the case is adjourned for judgment.
It is usual practice for an independent expert to be appointed by the court to assist in establishing the facts and gathering the salient documentation. The content of the expert report assists the judge in the decision-making process. Either party may also request for an expert to be appointed. The claimant, or the requesting party, will usually bear the costs of any appointed expert.
A CFI judgment can be issued any time up to 12 months after the claim has been raised. It is not unusual for this to take longer, especially in instances where a case is complex in nature.
Within 30 days of the judgment, a party may seek to appeal to the Court of Appeal. The Court of Appeal can overturn the judgment if it deems that the CFI erred in fact or law. In order to submit an appeal, the party making the appeal must raise a court filing fee.
A Court of Appeal judgment may be issued within six to nine months of raising the appeal.
The final appeal layer is the Court of Cassation. A party can seek to appeal the Court of Appeal judgment within 60 days of the judgment. The Court of Cassation can only overturn a Court of Appeal judgment if the appeal court erred in law.
A Court of Cassation judgment will be a final judgment and it can usually take between three to six months for a judgment to be issued. Alternatively, a judgment will become final on the lapse of the appeal period.
Once a judgment is final, it will be executed through the enforcement department of the Dubai court, provided the debtor(s) hold assets in Dubai and the debtor(s) fail to settle the dues voluntarily. Therefore, it is important to consider at the outset whether the adverse party holds any assets and, if so, where these are located should enforcement be required.
For further information in relation to raising a Dubai Court action, please contact Joanna Stewart (jstewart@davidsoncolaw.com).
February 2022
