ICLG

The International Comparative Legal Guide to:

Litigation & Dispute Resolution 2015 8th Edition A practical cross-border insight into litigation and dispute resolution work Published by Global Legal Group, in association with CDR, with contributions from: A.G. Erotocritou LLC Achour Law Firm Advokatfirman Vinge Allen & Overy LLP Attorneys at Law Borenius Ltd. Bär & Karrer AG Blake, Cassels & Graydon LLP Boga & Associates BON, Advocates Brian Kahn Inc. Attorneys CAKMAKOVA Advocates Casahierro Abogados Clayton Utz Dechert Kazakhstan Limited Dentons DLA Piper LLP Drinker Biddle & Reath LLP Gleiss Lutz Gün + Partners International Advocate Legal Services Iwata Godo

King & Wood Mallesons LLP Kruk & Partners Law Firm Latournerie Wolfrom & Associés Lennox Paton M. & M. Bomchil Motieka & Audzevičius Oblin Melichar Oliveira Ramos, Maia e Advogados Associados Ovalle Ugarte & Letelier Abogados Pittier, Almandoz y Eliaz, S.C. Portilla, Ruy-Diaz y Aguilar, S.C. Quinn Emanuel Urquhart & Sullivan, LLP Rogério Alves & Associados – Sociedade de Advogados, R.L. Sam Okudzeto & Associates Shipman & Goodwin LLP Sysouev, Bondar, Khrapoutski SBH Wolff Gstöhl Bruckschweiger Advokaturbüro Zamfirescu Racoţi & Partners Attorneys at Law Zavadetskyi Advocates Bureau

The International Comparative Legal Guide to: Litigation & Dispute Resolution 2015 General Chapter: 1

Freezing Injunctions in Support of Foreign Proceedings & Arbitration – Greg Lascelles & David Thomas, King & Wood Mallesons LLP

1

Country Question and Answer Chapters: Contributing Editor Greg Lascelles, King & Wood Mallesons LLP

2

Albania

Boga & Associates: Gerhard Velaj & Elona Hoxhaj

3

Argentina

M. & M. Bomchil: María Inés Corrá

13

Head of Business Development Dror Levy

4

Australia

Clayton Utz: Colin Loveday & Scott Grahame

21

5

Austria

Oblin Melichar: Dr. Klaus Oblin

30

Sales Director Florjan Osmani

6

Belarus

Sysouev, Bondar, Khrapoutski SBH: Timour Sysouev & Alexandre Khrapoutski

38

Commercial Director Antony Dine

7

Belgium

Allen & Overy LLP: Koen Van den Broeck & Thales Mertens

49

8

Brazil

Oliveira Ramos, Maia e Advogados Associados: Luiz Gustavo de Oliveira Ramos

55

Senior Account Manager Maria Lopez

9

British Virgin Islands

Lennox Paton: Scott Cruickshank & David Harby

61

10 Canada

Blake, Cassels & Graydon LLP: Ryder Gilliland

74

Sales Support Manager Toni Hayward

11 Chile

Ovalle Ugarte & Letelier Abogados: Esteban Ovalle Andrade & Gianfranco Gazzana Berenguer

82

12 Cyprus

A.G. Erotocritou LLC: Andreas Erotocritou & Antreas Koualis

90

13 England & Wales

King & Wood Mallesons LLP: Greg Lascelles & David Thomas

99

14 Finland

Attorneys at Law Borenius Ltd.: Kristiina Liljedahl & Niki J. Welling

15 France

Latournerie Wolfrom & Associés: Julien de Michele & Chantal Cordier-Vasseur

117

16 Germany

Gleiss Lutz: Michael Christ & Claudia Krapfl

128

17 Ghana

Sam Okudzeto & Associates: Nene Amegatcher & Esine Okudzeto

136

18 Japan

Iwata Godo: Atsushi Izumi & Yuya Masamoto

143

19 Kazakhstan

Dechert Kazakhstan Limited: Sergei Vataev & Roman Nurpeissov

150

20 Liechtenstein

Wolff Gstöhl Bruckschweiger Advokaturbüro: Christoph Bruckschweiger

158

21 Lithuania

Motieka & Audzevičius: Ramūnas Audzevičius & Mantas Juozaitis

165

22 Macedonia

CAKMAKOVA Advocates: Maja Jakimovska

173

23 Malaysia

BON, Advocates: Edmund Bon Tai Soon & New Sin Yew

181

GLG Cover Image Source iStockphoto

24 Mexico

Portilla, Ruy-Diaz y Aguilar, S.C.: Carlos Fernando Portilla Robertson & Enrique Valdespino Pastrana

188

Printed by Information Press Ltd. March 2015

25 Peru

Casahierro Abogados: Javier Lozada Paz

196

Account Directors Oliver Smith, Rory Smith

Editor Gemma Bridge Senior Editor Suzie Levy Group Consulting Editor Alan Falach Group Publisher Richard Firth Published by Global Legal Group Ltd. 59 Tanner Street London SE1 3PL, UK Tel: +44 20 7367 0720 Fax: +44 20 7407 5255 Email: [email protected] URL: www.glgroup.co.uk GLG Cover Design F&F Studio Design

5

110

Copyright © 2015 Global Legal Group Ltd. All rights reserved No photocopying

26 Poland

Kruk & Partners Law Firm: Aleksandra Matwiejko-Demusiak & Jarosław Kruk

204

27 Portugal

Rogério Alves & Associados – Sociedade de Advogados, R.L.: Rogério Alves

214

ISBN 978-1-910083-34-5 ISSN 1755-1889

28 Romania

Zamfirescu Racoţi & Partners Attorneys at Law: Cosmin Vasile & Alina Tugearu

222

Strategic Partners

29 Russia

Quinn Emanuel Urquhart & Sullivan, LLP: Ivan Marisin & Vasily Kuznetsov

230

30 South Africa

Brian Kahn Inc. Attorneys: Brian Kahn & Nicqui Galaktiou

237

31 Spain

Dentons: Julio Parrilla & Arancha Barandiarán

244

32 Sweden

Advokatfirman Vinge: Krister Azelius & Lina Bergqvist

252

33 Switzerland

Bär & Karrer AG: Matthew Reiter & Simone Stebler

259

34 Tunisia

Achour Law Firm: Achour Abdelmonem

267

35 Turkey

Gün + Partners: Beril Yayla Sapan & Asena Aytuğ Keser

275

Continued Overleaf

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720 Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

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The International Comparative Legal Guide to: Litigation & Dispute Resolution 2015 Country Question and Answer Chapters: 36 Ukraine

Zavadetskyi Advocates Bureau: Oleksandr Zavadetskyi & Dmytro Chekavskyi

282

37 United Arab Emirates

International Advocate Legal Services: Diana Hamadé Al Ghurair

291

38 USA – California

DLA Piper LLP: Cedric Chao & Kathleen Kizer

299

39 USA – Connecticut

Shipman & Goodwin LLP: Frederick S. Gold & Diane C. Polletta

310

40 USA – Illinois

Drinker Biddle & Reath LLP: Bennett W. Lasko & Alexius Cruz O’Malley

320

41 USA – New Jersey

Drinker Biddle & Reath LLP: Andrew B. Joseph & Andrew C. Egan

327

42 USA – Pennsylvania

Drinker Biddle & Reath LLP: Michael W. McTigue Jr. & Jennifer B. Dempsey

334

43 Venezuela

Pittier, Almandoz y Eliaz, S.C.: Alfredo Almandoz Monterola & Juan Manuel Silva Zapata

341

Editorial Welcome to the eighth edition of The International Comparative Legal Guide to: Litigation & Dispute Resolution. This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of litigation and dispute resolution. It is divided into two main sections: One general chapter titled Freezing Injunctions in Support of Foreign Proceedings & Arbitration. Country question and answer chapters. These provide a broad overview of common issues in litigation and dispute resolution in 42 jurisdictions, with the USA being sub-divided into five separate state-specific chapters. All chapters are written by leading litigation and dispute resolution lawyers and industry specialists, and we are extremely grateful for their excellent contributions. Special thanks are reserved for the contributing editor Greg Lascelles of King & Wood Mallesons LLP, for his invaluable assistance. Global Legal Group hopes that you find this guide practical and interesting. The International Comparative Legal Guide series is also available online at www.iclg.co.uk. Alan Falach LL.M. Group Consulting Editor Global Legal Group [email protected]

Chapter 37

United Arab Emirates International Advocate Legal Services I.

LITIGATION

1 Preliminaries 1.1

What type of legal system has the United Arab Emirates got? Are there any rules that govern civil procedure in the United Arab Emirates?

The United Arab Emirates (the UAE) is a federation of seven emirates comprising Dubai, Abu Dhabi, Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain, and was formed in 1971. The UAE legal system is founded upon civil law principles (most heavily influenced by Egyptian law) and Islamic Shari’a law, the latter constituting the guiding principle and source of law (Public Order). UAE legislation is formulated into a number of major codes providing for general principles of law with a significant amount of subsidiary legislation. The UAE has, over the last 30 years, expanded its legislation to include a comprehensive body of federal legislation being established in the form of federal codes of law. There are federal codes of law which apply in the emirates dealing with the most important and fundamental principles of law. The emirates respectively have laws enacted by their relevant rulers which relate to matters which are more administrative in nature, such as the establishment and operation of government-affiliated entities. Courts in the UAE render decisions through judges rather than juries. Though the system does not operate based upon judicial precedent, a court’s past decisions can be persuasive, particularly where the Supreme Court espouses principles to serve as guidelines for other courts. Additionally, decisions are often based upon established usage and custom as well as the Shari’a, which can also serve as guidelines for a court in the absence of Supreme Court pronouncements. Civil procedure of the courts is governed by the Civil Procedures Federal Law No. 11 of 1992. 1.2

How is the civil court system in the United Arab Emirates structured? What are the various levels of appeal and are there any specialist courts?

Although the UAE federal constitution permits each emirate to have its own judicial authority, all emirates other than Dubai and Ras Al Khaimah have brought their judicial systems into the UAE Federal Judicial Authority. While Dubai and Ras Al Khaimah are subject to the federal laws of the UAE, they do not come under the federal justice system as they retain the right to administer their own courts. Abu Dhabi has also recently set up its own courts and now has two sets of courts, federal and local.

Diana Hamadé Al Ghurair

The Dubai International Financial Centre (DIFC) Courts were also set up in Dubai in 2006 and follow the English legal system. Every emirate in the UAE has its own courts. All UAE courts comprise a Court of First Instance, a Court of Appeal and the Supreme Federal Court based in Abu Dhabi, except for the Dubai Courts, which has its own Court of Cassation. Each of these courts has a civil division, a commercial division, a criminal division and a Shari’a division. There are one or three judges in the Court of First Instance, three judges in the Court of Appeal and five judges in the Court of Cassation. The UAE courts conduct themselves in the Arabic language and so legal representation not only requires advocates who are properly licensed to appear before the courts, but also requires that they are conversant in Arabic. All documents submitted to the courts must also be translated into Arabic to be admissible. The only specialist courts are the Rent Disputes Courts. The DIFC Courts can also be called specialist courts since the type of disputes referred to them are civil and commercial only, they must be within the DIFC Courts’ jurisdiction and they are the only courts which conduct themselves in English and so the legal representation is conducted in English. 1.3

What are the main stages in civil proceedings in the United Arab Emirates? What is their underlying timeframe?

Before filing a case, the litigant should make sure that the court in which the case is to be filed has the jurisdiction to hear the case according to the provisions of the UAE law. Jurisdictional matters can be quite tricky. The first step to file a case in a federal court, whether it is a civil, labour or personal status lawsuit, is to submit a complaint to the Reconciliation and Settlement Committee or the Family Guidance Section, which will try to reach an amicable settlement between the parties involved in the dispute. If an amicable settlement was impossible, the litigating party can apply for a no objection letter from the relevant reconciliation committee. The competent court may not look into the action unless the matter has been presented to the reconciliation committee or a no objection letter has been issued by the committee. The proceedings in Dubai in relation to civil and commercial matters commence at the dispute resolution court, where the parties will be referred to an expert for an expert opinion on the matter which will be submitted to the court to register the case. As to the personal status court in Dubai, it follows the system adopted by the federal courts.

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United Arab Emirates

International Advocate Legal Services The average length of time of civil proceedings before the Court of First Instance when the claim is contested ranges from 6 to 12 months. Given that most cases are subject to two appeals, a final judgment will normally not be made earlier than two years after the initial filing of the claim. 1.4

What is the United Arab Emirates’ local judiciary’s approach to exclusive jurisdiction clauses?

The UAE courts have jurisdiction to hear actions filed against both a UAE national and foreign persons having a domicile or a place of residence in the UAE.

United Arab Emirates 1.7

There are no provisions pertaining to finance litigation proceedings and insurance of litigation costs is not available in the UAE. Assigning a claim or a cause of action is not possible in the UAE courts and does not exist.

2 Before Commencing Proceedings

Under the Civil Procedure Code, in certain circumstances the UAE courts also have jurisdiction over actions against foreign persons who have no domicile or place of residence in the UAE. If the UAE courts have jurisdiction, they ignore a choice of jurisdiction clause.

2.1

The courts also ignore a choice of jurisdiction clause in certain types of commercial matters, including commercial agencies or distributorship, real property, employment and government contracts.

The claimant must be present in person or through a Power of Attorney to a legal representative. The claim must meet procedural requirements, and include the names and addresses of the parties to the action and details of the claim.

1.5

Documents in support of the claim are usually annexed to the claim and must be translated into Arabic.

What are the costs of civil court proceedings in the United Arab Emirates? Who bears these costs? Are there any rules on costs budgeting?

2.2

The court fee depends on the value of the claim, and has a maximum cap. Generally, the maximum court fee is 7.5% of the claim value, subject to a maximum of AED30,000 in Dubai. If provisional orders are sought, a further fee of 50% of the initial filing fee is payable, subject to a maximum of AED15,000, 4% of the claim for the first AED100,000 and 5% of the amount over AED100,000 (up to a maximum of AED30,000) in the federal courts. This fee is payable either on an application for provisional relief, or on filing the substantive suit. The Abu Dhabi local courts, introduced recently, have set their fees at 3% without a maximum cap. 1.6

Are there any particular rules about funding litigation in the United Arab Emirates? Are contingency fee/ conditional fee arrangements permissible? What are the rules pertaining to security for costs?

There are no rules for funding litigation in the UAE. Fees are not fixed by law. Lawyers usually charge a fee which is calculated as a percentage of the amount of the claim. Additional fees are usually charged for acting in the Court of Appeal and the Court of Cassation. Additional fees are usually charged for acting in relation to a counterclaim. Lawyers sometimes agree to bill based on hourly rates. The law does not permit contingency fee arrangements. Article 24 of the UAE Federal Law No. (9) of 1980 in relation to regulating the legal profession states that a lawyer is not entitled to ask for contingency fees. Contingency fees on a “no win, no fee” basis are, strictly speaking, illegal in the UAE. There is no provision requiring a party to provide security for costs and the courts do not make orders for security for costs. In any event, when giving judgment in a matter, the court generally awards nominal amounts in legal fees, therefore the successful party cannot recover any costs aside from the court fees.

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Are there any constraints to assigning a claim or cause of action in the United Arab Emirates? Is it permissible for a non-party to litigation proceedings to finance those proceedings?

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Is there any particular formality with which you must comply before you initiate proceedings?

What limitation periods apply to different classes of claim for the bringing of proceedings before your civil courts? How are they calculated? Are time limits treated as a substantive or procedural law issue?

Law No. 5 of 1985 regarding civil transactions (Civil Code) contains general rules relating to limitation. In general, a claim is time-barred after 15 years, unless a specific provision states otherwise. However, there are many exceptions to the general rule. Several statutes contain limitation periods, depending on the type of dispute. In addition, there are several specific provisions dealing with time bars under Law No. 18 of 1993 regarding commercial procedure (Commercial Code). Subject to the exceptions, the limitation period is generally 15 years for contract disputes, three years for disputes relating to cheques, three years for insurance disputes and three years for causing harm (tort), 10 years for building contracts (defects), one year for carriage of goods by sea and one year for employment-related disputes. Time limits are treated as procedural law issues.

3 Commencing Proceedings 3.1

How are civil proceedings commenced (issued and served) in the United Arab Emirates? What various means of service are there? What is the deemed date of service? How is service effected outside the United Arab Emirates? Is there a preferred method of service of foreign proceedings in the United Arab Emirates?

Until recently, the court issued a summons with a hearing date endorsed on it for service on the defendant, with a copy of the claim to be served according to the procedures included in the Civil Procedures Law No. 11/1992. Notice to the defendant used to be delivered by a court officer who served the summons, which included the claim and the date of the first hearing. However the said law which governs such process has been amended recently by Law No. 10/2014, which was passed and signed on 20/11/2014 to become effective after three months from the date of publishing it in the official gazette. The new law has replaced 39 provisions and deleted two thereof.

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The new law will be applicable on all cases of both full and restricted jurisdiction; it aims to switch from the traditional method of dealing with cases to an interactive system by reducing the number of procedures and the comprehensiveness of their submission, and also reducing the periods of time that must be met. The previous system, according to the previous provisions, required a delay in the setting of the first hearing date for a period of one month from the date of registration, for another month to investigate the defendant’s address data and for a third month for the date announcement. But now, through a case management department rather than having to wait for approximately three months for the defendant’s verification of notice, the period has been reduced to an immediate action. This will be achieved by entering the required information at the registration desk, after which the defendant will receive an e-mail notification, an SMS and a phone call requesting them to collect a copy of the summons and its annexes in order to be able to respond to the claim. If the proceedings are to be served on a defendant abroad, the summons is served through consular channels. This procedure can be long. The UAE court requires proof of service. Service by registered mail is now permissible at the family courts in the UAE. Foreign proceedings are served as per the requirements of service according to the foreign country’s law, but usually the better way is to serve the foreign proceedings by an attorney to the defendant in person. 3.2

Are any pre-action interim remedies available in the United Arab Emirates? How do you apply for them? What are the main criteria for obtaining these?

Injunctive relief and interim remedies are not generally available in the UAE, but interim attachment orders are granted before a full trial to preserve assets pending judgment or a final order when the court is satisfied that there is both a prima facie case against the defendant and a risk that if the order is not granted the claimant may not be able to enforce any judgment subsequently obtained. The courts can make provisional orders, including provisional attachment of assets to secure a claimant’s claim (attachment orders). The Precautionary Attachment Orders are awarded at the judge’s discretion and evidence must be provided establishing that there is an imminent danger of assets being removed in a way that would negate the effect of any judgment subsequently obtained. If an attachment order is granted, a substantive claim must be started within eight days of the order. If the attachment order secures claims made in proceedings abroad, the substantive claim usually seeks only an order validating the attachment and does not seek a judgment on merits. Another form of interim remedy available in the UAE is the urgent application for the appointment of an expert to examine evidence that might be lost. This is just like the interim attachment order, made ex parte and is usually determined on the day of the application or the next working day. 3.3

What are the main elements of the claimant’s pleadings?

1.

Material facts;

2.

the cause of action;

3.

names, sums and numbers expressed in figures;

4.

a list of witnesses and supporting documents;

5.

law and court precedents;

United Arab Emirates 6.

the signature of the party or his lawyer; and

7.

the lawyer’s Power of Attorney.

3.4

Can the pleadings be amended? If so, are there any restrictions?

The CPL allows the plaintiff to submit an interlocutory application, containing a rectification of the original application or an amendment to the subject matter thereof to deal with circumstances supervening or coming to light after the bringing of the action; being supplementary to the original application or consequent upon it or inseverably related to it; containing an addition or amendment to the cause of action, leaving the subject matter of the application unaltered; seeking an order for a preservatory procedure; and as the court may permit to be submitted, being related to the original application.

United Arab Emirates

International Advocate Legal Services

As far as the time frame set by law for such amendments, it is quite wide as amendments to pleadings are allowed throughout the proceedings right until the close of pleadings.

4 Defending a Claim 4.1

What are the main elements of a statement of defence? Can the defendant bring counterclaims/ claim or defence of set-off?

1.

Material facts;

2.

names, sums and numbers expressed in figures;

3.

a list of witnesses and supporting documents;

4.

arguments raised against the claim on the grounds of law and court precedents;

5.

the lawyer’s Power of Attorney; and

6.

the signature of the party or his lawyer.

The defendant may submit an interlocutory application applying for a judicial set-off and applying for judgment in his favour for compensation for loss sustained by him by reason of the original action or any procedure in it. 4.2

What is the time limit within which the statement of defence has to be served?

The time limit which the statement of defence has to be served is within and during the time frame/interval set by the court for the submission of the defence, usually two weeks. The statement of defence will be submitted to the court upon the court’s order for the said submission to be lodged. 4.3

Is there a mechanism in your civil justice system whereby a defendant can pass on or share liability by bringing an action against a third party?

When a defendant wishes to pass or share liability in relation to a claim filed before the UAE courts, a certain mechanism is available for that purpose. Please refer to section 5. 4.4

What happens if the defendant does not defend the claim?

Procedural fairness is a very crucial aspect of litigation proceedings in the UAE. The courts are keen on allowing the parties to have

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International Advocate Legal Services

United Arab Emirates

a smooth and efficient trial without deliberate obstructions from a non-participating party. As a result, if the defendant fails to respond the judgment will be issued regardless. 4.5

Can the defendant dispute the court’s jurisdiction?

Article 20 of Chapter 1 of the CPL thereof provides that, with the exception of actions in rem relating to real property abroad, the courts shall have jurisdiction to hear actions brought against nationals and claims brought against foreigners having a domicile or place of residence in the State. The remaining articles in relation to jurisdiction provide for the instances where the courts have jurisdiction and lack it.

5 Joinder & Consolidation 5.1

Is there a mechanism in your civil justice system whereby a third party can be joined into ongoing proceedings in appropriate circumstances? If so, what are those circumstances?

Article 94 of the Civil Procedures Law provides that a party may join in the action any person who could have been joined in it at the time it was brought and the defendant may also claim against a person who is not a party to the proceedings and apply that that person be joined as a party to the action. He may also be joined at a hearing if the party to be joined attends and agrees before the court to that procedure. 5.2

Does your civil justice system allow for the consolidation of two sets of proceedings in appropriate circumstances? If so, what are those circumstances?

Class actions are not allowed under UAE law but consolidation of two sets of proceedings is allowed unless each case is related to a dispute arising from a separate contract. Court-ordered consolidation is a way for the courts in the UAE to resolve associated disputes in a more economic, efficient and expedient way, while at the same time preventing the risk of inconsistent or contradictory awards. Although no provisions allowing consolidation of proceedings or prohibiting it are found in UAE Civil Procedures Law, the courts in the UAE have been exercising this under Articles 97 to 99 of the law. The DIFC Courts’ case management system allows consolidation according to the (Rules of The DIFC Courts) 4.2, in particular RDC 4.2(7), which allows the Court to, inter alia, consolidate proceedings in circumstances in which it considers appropriate. 5.3

6 Duties & Powers of the Courts Is there any particular case allocation system before the civil courts in the United Arab Emirates? How are cases allocated?

The allocation of cases before the courts in the UAE is based on the value of the claim. Cases that do not exceed AED100,000 in worth,

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and counter cases, irrespective of their value, as well as common allocation cases, will be registered as petty (partial) cases. Cases that exceed AED100,000 in worth, and un-estimated valued cases, as well as real estate cases in-kind, whatsoever its value may be, are registered as major cases. 6.2

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Do the courts in the United Arab Emirates have any particular case management powers? What interim applications can the parties make? What are the cost consequences?

Although the procedure and timetable of court hearings are fixed by the CPL, the parties may influence the timetable in some ways, with the consent of the court, as any party may request an adjournment to respond to any submission at any hearing, and the court usually grants such adjournments. The plaintiff may also apply to the court to suspend the hearing of the case for up to six months. The court is in charge of case management, starting from registering the case, managing the service of summons, accepting and modifying the pleadings, controlling the sessions, inspecting the evidence, examining the witnesses, scheduling the hearings, joining third parties to the proceedings, issuing interim and provisional orders, deciding on matters of law and facts and issuing judgments. The Dubai Courts has recently introduced a new case management system which aims to switch from the traditional method of dealing with cases to an interactive system by reducing the number of procedures. The DIFC Courts also has active case management powers as provided in the Rules of the DIFC Courts (RDC). 6.3

What sanctions are the courts in the United Arab Emirates empowered to impose on a party that disobeys the court’s orders or directions?

Article 70 of the CPL provides that the court may impose sanctions on the party who submits at that session a document which should have been submitted within the time limit laid down in Article 45 thereof. The court must, of its own motion or on the application of the opposing parties, pass judgment against the party for a fine of not less than AED2,000 and not more than AED5,000. Article 71 also provides that the court may impose a fine of not less than AED500 and not more than AED3,000 upon any of its employees or litigants who fail to lodge documents or carry out any procedure in the litigation within the time limit laid down by the court. If a party does not submit to a court order, the court will impose a fine, and in the event of a contempt of court charge, the party may be imprisoned for 24 hours. 6.4

Do you have split trials/bifurcation of proceedings?

The UAE Civil Procedures Law does not provide for split trials/ bifurcation of proceedings.

6.1

United Arab Emirates

Do the courts in the United Arab Emirates have the power to strike out part of a statement of case or dismiss a case entirely? If so, in what circumstances?

The courts have no powers to strike out part of a statement of case or dismiss a case entirely. 6.5

Can the civil courts in the United Arab Emirates enter summary judgment?

In the UAE summary judgments are sought through summary court lawsuits and orders on petition. The CPL provides for a summary judgment procedure under Article 28, where the Court of First Instance judge shall be deputed to make provisional rulings in expedited matters where it is feared [that a right will be lost]

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United Arab Emirates

by the passing of time. Article 29 also provides that judges have jurisdiction to make orders imposing judicial custody over moveable property or real estate or a combination of both in respect of which a dispute has arisen or if the right therein has not been established, if a person having an interest in the property has reasonable cause to fear an imminent danger if the property remains in the hands of the person in possession of it.

The concept of “without prejudice” correspondence is not recognised. Any correspondence marked “without prejudice” and brought into existence expressly for the purpose of furthering genuine settlement negotiations can be filed in court and relied on. Any admissions or offers made in this correspondence may be prejudicial to the party making the admissions or offers. Therefore, settlement negotiations are not usually documented.

The trial court shall have jurisdiction to hear those matters if they are raised before it as consequential issues.

7.3

Orders on Petitions are regulated by Articles 140, 141 and 142 where the law provides that in circumstances where a party has grounds to seek an order, he shall submit a petition with an application to the competent judge who shall make an order in writing on one of the copies of the petition no later than one day following the submission thereof. A grievance can be submitted with reasons in respect of the passed order on petition. The defendant has 15 days to apply to have it set aside, setting out the relevant grounds. Once the application to set aside is made, there is what amounts to a full trial on the matter. All arguments are pleaded and the Court of First Instance adjudicates on all defences, including preliminary defences such as jurisdiction, time-bar and so on, in its final judgment. The parties may also make interim applications to the court for granting temporary injunctions to restrain acts of damaging, destruction or wasting of property such until the time the case is judged, such as property attachment orders, appointment of a receiver, or seizure of a passport or a travel ban. Except where the conditions set out above apply, there is no other provision for summary judgment. Injunctive relief and interim remedies are not generally available. 6.6

Do the courts in the United Arab Emirates have any powers to discontinue or stay the proceedings? If so, in what circumstances?

The court can order the cessation of the action if it considers that judgment on its merits is dependent on a decision in another matter upon which the judgment depends. Upon disappearance of the cause for barring, any of the parties may expedite the action.

7 Disclosure 7.1

What are the basic rules of disclosure in civil proceedings in the United Arab Emirates? Is it possible to obtain disclosure pre-action? Are there any classes of documents that do not require disclosure?

There is no process of discovery and inspection of documents. Each party files the documents that it wishes to rely on for its case and there is no obligation on a party to file a document which is damaging to its case. In practical terms, there is extremely limited discovery available. 7.2

What are the rules on privilege in civil proceedings in the United Arab Emirates?

Communications between lawyer and client are privileged. Lawyers must not disclose information provided by the client without the client’s permission.

What are the rules in the United Arab Emirates with respect to disclosure by third parties?

This is irrelevant to the UAE litigation system. 7.4

United Arab Emirates

International Advocate Legal Services

What is the court’s role in disclosure in civil proceedings in the United Arab Emirates?

This is irrelevant to the UAE litigation system. 7.5

Are there any restrictions on the use of documents obtained by disclosure in the United Arab Emirates?

This is irrelevant to the UAE litigation system.

8 Evidence 8.1

What are the basic rules of evidence in the United Arab Emirates?

There is no process of discovery and inspection of documents. Each party files the documents that it wishes to rely on for its case and there is no obligation on a party to file a document which is damaging to its case. In practical terms, there is extremely limited discovery available. There is no pre-trial exchange of evidence. All arguments and supporting documents, together with Arabic translations, are submitted to the court in writing. Hearing witnesses in court is not a normal procedure in the UAE. Only on the request of a party or if the court considers it appropriate may witnesses be called and heard before the court or may a hearing date be scheduled to hear the arguments from a party before the court makes its final decision. Witnesses are more likely to be heard if the case is referred to other forms of evidence (an investigator or expert). 8.2

What types of evidence are admissible, which ones are not? What about expert evidence in particular?

Documentary evidence, witness evidence and expert evidence are all admissible before UAE courts. Law No. 8 of 1974 concerning Expert Evidence before the Courts and the Law of Evidence govern the appointment of experts. The court can appoint an expert at any stage to investigate any matters in which the court considers it requires assistance. The court usually appoints an expert for findings of facts in a variety of issues including financial, accounting or other technical matters. The expert is selected from a list of experts maintained by the court. If the parties fail to agree, the court generally orders that an expert be appointed from the court’s list and the parties do not typically have control over who is appointed.

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International Advocate Legal Services Once the expert has prepared and filed his report in court, a date is fixed for the parties to comment on the report. The expert’s report does not bind the judge. However, the court usually adopts the expert’s findings. 8.3

Are there any particular rules regarding the calling of witnesses of fact? The making of witness statements or depositions?

All proceedings in civil matters are based on written submissions supported by documentary evidence. The court does not usually hear oral argument from the parties’ lawyers. The case is determined on the basis of the written submissions and documentary evidence. If a party wishes to call a witness, an application must be made to the court. When an application is granted, the witness can be crossexamined. However, the judge closely supervises the testimony of the witness, questions the witness and controls both examination and cross-examination. 8.4

Are there any particular rules regarding instructing expert witnesses, preparing expert reports and giving expert evidence in court? Does the expert owe his/her duties to the client or to the court?

The expert must comply with certain procedures set out in the federal laws. These include holding meetings with the parties and their lawyers and keeping minutes of these meetings. The expert provides independent advice to the court and does not represent the interests of any party. As there are no oral hearings, the expert is not questioned by either party or the court. However, once the expert has filed the report, the parties are given an opportunity to comment on the report. This is done by written submissions. If the court considers that the matter requires further investigation, it can refer the matter back to the expert. The court can also order that another expert be appointed to prepare a report if this is deemed necessary. 8.5

What is the court’s role in the parties’ provision of evidence in civil proceedings in the United Arab Emirates?

All documentary evidence has to be submitted to the court in original copies and has to be translated into Arabic by a licensed translator. When making the order for the appointment of an expert, the court also orders one of the parties to pay an amount into court for the expert’s fees. The claimant is usually ordered to make the payment. The court can order further payments. The final judgment of the court contains a determination as to which party must pay the expert’s fees.

9 Judgments & Orders 9.1

What different types of judgments and orders are the civil courts in the United Arab Emirates empowered to issue and in what circumstances?

Civil and commercial judgments, summary judgments and orders on petitions. Please refer to question 6.5.

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What powers do your local courts have to make rulings on damages/interests/costs of the litigation?

The courts have full powers to make rulings on damages, interests and costs according to provisions 133, 134, 135 and 136 of the CPL. 9.3

How can a domestic/foreign judgment be recognised and enforced?

Article 235 of the CPL provides that an order may be made for the enforcement in the UAE of judgments and orders made in a foreign country on the same conditions laid down in the law of that country for the execution of judgments and orders issued in the UAE, provided that the courts of the UAE had no jurisdiction to try the dispute in which the order or judgment was made, and that the foreign courts which issued it did have jurisdiction there over in accordance with the rules governing international judicial jurisdiction laid down in their law, and that it does not conflict with a judgment or order already made by a court in the UAE, and contains nothing that conflicts with morals or public order in the UAE. 9.4

What are the rules of appeal against a judgment of a civil court of the United Arab Emirates?

An unsuccessful party has the right to appeal from the Court of First Instance to the Court of Appeal. It is possible to appeal in relation to findings of both fact and law. The Court of Appeal hears the whole matter again and the parties can file further submissions and evidence. The appeal must be filed within 30 days of the date on which the Court of First Instance delivers its judgment. Further appeal is available in Dubai to the Court of Cassation on a point of law, subject to certain monetary limits (among other things). The time limit for filing the appeal is 60 days from the date judgment was delivered by the Court of Appeal. The Court of Cassation can either give final judgment in the matter or remit the matter back to the Court of Appeal for further findings. Court of Appeal judgments passed in the other emirates are further appealed before the UAE Federal Supreme Court in Abu Dhabi.

II.

ALTERNATIVE DISPUTE RESOLUTION

1 Preliminaries 1.1

What methods of alternative dispute resolution are available and frequently used in the United Arab Emirates? Arbitration/Mediation/Expert Determination/ Tribunals (or other specialist courts)/Ombudsman? (Please provide a brief overview of each available method.)

There is no statutory framework for enforcing decisions of boards set up for the purpose of conciliation, mediation or expert evaluation in the UAE. In practice arbitration is the only method of ADR that is available in the UAE. Other ADR procedures, such as mediation, are not frequently used. Arbitration has become a genuine alternative to court proceedings in the UAE, especially in the context of transactions conducted by the large number of resident expatriate individuals and businesses.

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What are the laws or rules governing the different methods of alternative dispute resolution?

United Arab Emirates 1.4

The only law in the UAE which regulates ADR are 12 provisions found in the UAE Civil Procedures Law No. 11 of 1992 related to arbitration. 1.3

Are there any areas of law in the United Arab Emirates that cannot use Arbitration/Mediation/Expert Determination/Tribunals/Ombudsman as a means of alternative dispute resolution?

Arbitrations in the UAE are governed by the provisions found in Chapter 3 of the Civil Procedures Law (Federal Law No. 11 of 1992). These provisions do not apply in the Dubai International Financial Centre, which has its own arbitration law. Pursuant to Article 203 of the Civil Procedures Law, for an arbitral tribunal to have jurisdiction there must exist a written agreement signed by all of the parties that the dispute be arbitrated. Moreover, even if there exists a contract containing the arbitration clause between each of the parties and duly signed by them, it should still be considered whether the subject matter of the dispute and the claims as formulated are arbitrable. As to what is arbitrable, Article 725 provides that the compromise or settlement of any dispute (an accord) must relate to permissible subject matters for contracts and not contradict mandatory law or UAE public policy. Further, Article 203(4) provides that arbitration is not permissible in matters in which conciliation is not allowed, and the Court of Cassation has on many occasions determined that as a matter of UAE law no conciliation is permitted for matters relating to public policy. The DIFC’s Arbitration Law (No. 1 of 2008 as amended) contemplates fewer restrictions than UAE law on the types of disputes and claims which may be arbitrated in the DIFC. However, DIFC law still requires much the same analysis to be undertaken to determine whether a dispute is suitable for arbitration or instead whether arbitral proceedings might be invalid or an award vulnerable to be set aside on grounds of conflict with UAE public policy. The Federal Law of Civil Transactions No. 5 of 1985 (the Civil Code) is the platform for all civil and commercial laws in the UAE and governs all contracts. It also addresses public policy. Article 3 of the Civil Code states that “Public policy shall be deemed to include matters relating to personal status such as marriage, inheritance, and lineage, and matters relating to systems of government, freedom of trade, circulation of wealth, rules of individual ownership and the other rules and foundations upon which society is based, in such a manner as to not conflict with the definitive provisions and fundamental principles of Islamic Shari’a.” Meanwhile, Article 733 of the Civil Code states that the following potentially usurious transactions are unequivocally not permitted to be the subject matter of an accord or compromise and are thus not arbitrable. The transactions are the cancellation of a debt by another debt, the sale of food by way of commutative contract prior to delivery, the deferred exchange of gold against silver and vice versa, Riba al nasia (usurious interest in consideration of the deferment of the payment of a debt), reducing part of a deferred debt owed by a debtor in consideration of accelerating the date of payment, reducing the amount of a guarantee on a deferred debt owed by a debtor in consideration of accelerated payment with an increase and an advance involving a benefit.

Can local courts provide any assistance to parties that wish to invoke the available methods of alternative dispute resolution? For example, will a court – pre or post the constitution of an arbitral tribunal – issue interim or provisional measures of protection (i.e. holding orders pending the final outcome) in support of arbitration proceedings, will the court force parties to arbitrate when they have so agreed, or will the court order parties to mediate or seek expert determination? Is there anything that is particular to the United Arab Emirates in this context?

No, they cannot. 1.5

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How binding are the available methods of alternative dispute resolution in nature? For example, are there any rights of appeal from arbitration awards and expert determination decisions, are there any sanctions for refusing to mediate, and do settlement agreements reached at mediation need to be sanctioned by the court? Is there anything that is particular to the United Arab Emirates in this context?

There is nothing particular to the UAE in this context except for the fact that arbitral awards will be appealed while being enforced by the local courts. There are no sanctions in place for refusing to mediate.

2 Alternative Dispute Resolution Institutions 2.1

What are the major alternative dispute resolution institutions in the United Arab Emirates?

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Dubai International Arbitration Centre (DIAC).

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DIFC Arbitration Centre.

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Abu Dhabi Arbitration Centre (Abu Dhabi Chamber of Commerce).

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Sharjah Arbitration Centre.

3 Trends & Developments 3.1

Are there any trends or current issues in the use of the different alternative dispute resolution methods?

Despite the fact that the UAE is a party to the Washington Convention and is also party to other multilateral treaties providing for the protection of foreign investments, the UAE government’s reluctance to embrace arbitration as an ADR method is quite evident from the number of drafts of the UAE federal arbitration law that have been circulated since 2008, combined with much discussion within the arbitration community in the UAE surrounding a new federal arbitration law to supplant the provisions of the CPL, without a clear indication of when the UAE plans to pass any of the said drafts as a federal arbitration law.

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Diana Hamadé Al Ghurair International Advocate Legal Services 1st Flr, K Bldg., Airport Road, Umm Ramool Rashidiya, Dubai UAE Tel: +971 4284 4733 Fax: +971 4284 4663 Email: [email protected] URL: www.ialsblog.com Diana Hamadé is the founder of IALS, with right of audience before all UAE courts, and concentrates her practice in commercial, corporate, real estate and family law matters. She is also actively engaged in arbitrations as counsel and arbitrator. Diana’s admission to the lawyers’ register of the Ministry of Justice in the UAE was affected in 2008. Since then, she has been appearing before the courts in all emirates. Since 2013 she has had right of audience before the Court of Cassation and the UAE Federal Supreme Court. Diana contributed to the “The National” on UAE Legal Affairs and to the “Brief”, a Thomson Reuters ILB Publication, where she wrote on local legal issues. She also joined as a trainer of Dubai Government staff on Corporate Governance and is invited to speak at conferences and forums on many legal matters concerning family law. In addition, she is the author of numerous publications. Diana received her LL.M. degree in Commercial Law from Kings College, Aberdeen University, United Kingdom and an LL.B. from the UAE University in Shari’a & Law. Selected professional achievements: ■■ Finalist for the Most Influential Female Lawyer by the “Brief” for 2012. ■■ Best Local Writing Talent on Legal Affairs in the UAE by “The National”.

The International Advocate Legal Services (IALS) is a boutique law firm focusing on high-end cross-border litigation in corporate, civil and family law matters for a variety of national and international clients. IALS draws on the experience of its founder, Diana Hamadé Al Ghurair. In addition, the firm comprises five lawyers specialised in diversified areas of the law who are capable of providing advice on their specific areas of expertise. Litigation practice: The firm represents and acts for clients in corporate, commercial and labour matters before UAE courts. It has also experience in litigating before the Rent Disputes Courts. Arbitration practice: IALS is already engaged in arbitration cases and matters related to arbitration in Dubai as counsel and party nominated arbitrator. Advisory services: The firm regularly advises clients with respect to general corporate issues, and routinely handles employment and real estate matters. Family law practice: IALS is the leading law firm in family law in the UAE. It is one of the few law firms that specialises in Shari’a and expatriate family law matters. Diana is the only lawyer registered as a fellow of the International Academy Of Matrimonial Lawyers in the Middle East.

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