Motei & Associates

Motei & Associates - Law Firm in Dubai

Motei & Associates – the go-to legal consultants in Dubai that cuts through legal complexities and delivers effective advocacies.

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Dubai
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Discussion on the Dispute Resolution Forums in Dubai
Discussion on the Dispute Resolution Forums in Dubai

As a result of the world economic downturn and the resultant increase in contractual disputes we have seen a number of specialized dispute resolution forums introduced in Dubai, especially in the last two years, to deal with the rising volume and specific nature of real estate disputes.

We discuss below in general outline the different forums in Dubai and the circumstances in which they will have jurisdiction.

DIFC Courts

The DIFC Courts have jurisdiction over matters related to the Dubai International Financial Centre
(“DIFC“). The DIFC Courts can hear disputes regarding:

– DIFC entities
– A transaction or contract concluded, in whole or in part, in the DIFC or an incident that has occurred in the DIFC
– Any matter over which the DIFC courts have jurisdiction by virtue of a DIFC law or regulation.

Dubai Property Court

The Dubai Property Court is an arm of the Dubai Court of First Instance, which has exclusive jurisdiction to deal with property disputes in the Emirate of Dubai where parties have agreed to the jurisdiction of the Dubai Courts to settle disputes.

The Dubai Property Court has authority to consider disputes regarding properties located in the Emirate of Dubai including the areas specified in Regulation No. (3) of 2006 where non-locals can own properties.

The Dubai Property Court commenced taking cases in September 2008 and is active in hearing disputes between developers and purchasers, especially applications for contract termination and damages.

The Dubai Real Estate Regulatory Agency (“RERA“), a specialist arm of the Dubai government’s Land Department, regulates the real estate market in Dubai and can mediate disputes referred to it between developers and purchasers. RERA is effectively a filter for the Dubai Property Court.

Centre for Amicable Settlement of Disputes in Dubai

The Centre for Amicable Settlement of Disputes was established in Dubai pursuant to Law No. 16 of 2009 “Establishing the Centre for Amicable Settlement of Disputes” (hereinafter referred to as the “Centre“).

The Centre is affiliated to the Civil Courts in Dubai and shall examine such disputes as may be defined by a resolution of the Chairman regardless of their value or nature, excluding:

  • Summary and temporal orders and cases;
  • Cases to which Government is a party;
  • Cases beyond the jurisdiction of the Dubai Courts; and
  • Cases registered with the Dubai Courts before the provisions of the Law came into force.

The Centre is not yet operational and at present, where a dispute arises, the applicants are filing cases directly with the Dubai Courts.

Dubai Special Committee to Settle Cheques of Real Estate Transactions

The Special Committee to Settle Cheques of Real Estate Transactions is an ad hoc judicial committee in
Dubai formed pursuant to Dubai Decree No. 56 of 2009 (hereinafter referred to as the “Committee”).

The Committee has exclusive jurisdiction to settle complaints of returned cheques issued by the purchaser to a real estate developer or cheques issued by beneficiaries and tenants of long-term leased properties whose rights are governed by the provisions of Law No. 7 of 2006, i.e. not short term tenancies registered at the Real Estate Regulatory Authority, but leases registered in the Real Property Register maintained by the Dubai Land Department.

The rulings of the Committee are final and cannot be challenged, and shall be enforceable through the enforcement department of the Dubai Courts.

Dubai World Tribunal

On the 14th December 2009, the Ruler of Dubai issued Decree No. 57 of 2009 “Establishing a tribunal to decide the Disputes Related to the Settlement of the Financial Position of Dubai World and its Subsidiaries” (the “Decree“) in terms whereof a special tribunal (the “Tribunal“) was established with the power to supervise the financial reorganisation of Dubai World and its subsidiaries (the “Corporation“) and with jurisdiction to hear and determine disputes relating to the restructuring of the debt of the Corporation.

The Decree was issued to provide a comprehensive legal framework, consistent with international standards, to govern any future formal reorganisation and restructuring of the Corporation and to deal with the settlement of disputes related to the Corporation. The Decree is based on the insolvency laws, rules and regulations of the DIFC as varied by the Decree.

The Decree states that the Tribunal has jurisdiction to:

  • Hear and decide any demand or claim submitted against:- The Corporation, including hearing and deciding any demand to dissolve or liquidate the
    Corporation; and- Any person related to the settlement of the financial obligations of the Corporation, including the Chairman and members of the Board of Directors, as well as the employees and workers of the Corporation.
  • Issue interim and interlocutory orders and decisions, including injunctions to any person to act or not to act, or other order as the Tribunal considers appropriate.

The Tribunal has its seat and holds its hearings in the DIFC and all hearings shall be open to the public unless the Tribunal decides otherwise for considerations relating to the conduct of justice or to protect confidentiality of information.

The decisions and orders of the Tribunal are final, irrevocable and not subject to any appeal or review. Neither the Dubai Courts nor the DIFC Courts shall hear or decide any demand, claim or other matter which is within the jurisdiction of the Tribunal by virtue of this Decree.

A directive issued by the Tribunal (Tribunal Practice Direction No. 3 of 2011 “Directive“) on the 22nd September 2011 provides that it may no longer hear cases against Nakheel PJSC and those of its subsidiaries and affiliates. An extract of the Directive reads as follows: “… (2) The Tribunal has been informed that Nakheel PJSC and those of its subsidiaries and affiliates ceased to be subsidiaries of Dubai World with effect from 23rd August 2011. (3) On that basis, issues as to the jurisdiction of the Tribunal may arise in proceedings brought by or against Nakheel PJSC and those of its subsidiaries and affiliates that have ceased to be subsidiaries of Dubai World…

The Directive provides that the Tribunal will determine any Application that may be made to it, on notice and proper form, with regards to its jurisdiction over Nakheel PJSC and those of its subsidiaries and affiliates in any projected proceedings or in any existing proceedings. Pending its determination of any Application made, the Tribunal will continue to exercise jurisdiction in any existing proceedings commenced before 23rd August 2011.

Rejected cases would need to see recourse to the Dubai courts.

Dubai Special Judicial Committee to resolve disputes related to Amlak Finance PJSC and Tamweel PJSC

The special judicial committee to resolve disputes related to Amlak Finance PJSC and Tamweel PJSC was established pursuant to Dubai Decree No. 61 of 2009 (hereinafter referred to as the “Committee”).

The Committee has jurisdiction to adjudicate the following:

  • To consider and adjudicate any request or claim submitted against:- Amlak Finance PJSC or Tamweel PJSC or any of their subsidiaries, including liquidation and dissolving requests;- Any person linked to the settlement of the financial position of any of these two companies, including their respective Chairman, Board Members and all employees and workers.
  • To issue temporal and preliminary orders and decisions, including binding any person to take an action or refrain from action or any other procedure the Committee may deem fit.

The Dubai Courts are prohibited from considering and adjudicating any request or claim that falls under the Committee’s jurisdiction in accordance with this Decree.

The judgments issued by the Committee are final, definitive and non-appealable in any way.

Arbitration

The Dubai International Arbitration Centre (“DIAC“) is Dubai’s leading arbitration institution. DIAC has jurisdiction to hear disputes where the parties have agreed in writing to submit their future or existing disputes to DIAC (this agreement commonly takes the form of an arbitration clause in a contract).

DIFC/LCIA Arbitration Centre was established in February 2008 and is based in the DIFC. The Centre is a partnership between the London Court of International Arbitration (LCIA) and the DIFC. The Centre has jurisdiction to hear disputes where the parties have agreed in writing that arbitration will be conducted under its rules (this agreement commonly takes the form of an arbitration clause in a contract).

The International Islamic Centre for Reconciliation and Commercial Arbitration (IICRCA) is a dispute resolution forum for the Islamic Finance industry, based in Dubai. The Centre can settle commercial and financial disputes between commercial or financial institutions, and between those entities and third parties, that have agreed to settle disputes under Shari’a law. Again, the agreement of the parties is required for the IICRCA to have jurisdiction.

The Judicial Committee authorised to settle disputes between landlords and tenants

The Judicial Committee was established pursuant to Decree No. 2 of 1993, and has exclusive jurisdiction to hear all landlord and tenant disputes in Dubai. Their decisions are final and binding and cannot be appealed at Dubai Courts.

Conclusion

In this article we have only discussed the dispute resolution forums in Dubai, however each of the other Emirates of the UAE have their own and different laws, regulations, procedures and dispute resolution forums.

The content of this article is intended to provide a general guide on the different dispute resolution forums in Dubai and the circumstances in which they will have jurisdiction. In the event of a contractual dispute, specialist advice should be sought about your specific matter.

About the author:

Ashraf El Motei heads the dispute resolution practice at Motei & Associates, a Dubai based law firm since 2002. Ashraf specializes in commercial and corporate disputes before local courts and international arbitration centers. He is a listed arbitrator at DIAC and registered practitioner before DIFC Courts. For further info on the article, please contact the author at: a.motei@motei.com

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