UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for December, 2009

Registering a Will in the UAE is More Important Than You May Realize



In the case that you may die in the UAE, it is important to leave a will behind, which is notarized in your home country, the UAE Ministry of Foreign Affairs, and further registered with the courts of the UAE.   The applicable law in the case of your death may be the law of your country of citizenship, unless one of your heirs specifically asks the laws of the UAE to apply to the particular estate case, you don’t leave a will behind or intestacy, or if you are Muslim, in which case the Sharia’h law may apply. 

If you leave a will behind, which is properly notarized and registered, then the law of your home country may apply.  Under the UAE Civil Code, Federal Law No.2 of 1987, Article 17(1) states: Inheritance shall be governed by the law of the deceased at the time of his death.’ However, if you die without leaving a will, the laws of the UAE may apply to the estate matter.  In addition, even if you leave a will behind, the laws of the UAE may still apply to immoveable property such as real estate.  According to the Civil Code, UAE Federal Law No. 2 of 1987, Article 17(5): “The law of the UAE shall apply to wills made by aliens disposing of their property located in the UAE.”  Article 1219(2) of the Civil Code provides that transfers of estate shall be subject to the provisions of the Sharia’h law.  Article 1258 of the Civil Code states that the provisions of the Sharia’h law shall apply to wills.  Thus, even if you have written, notarized, and registered a will in the UAE, UAE law may still apply to immoveable property such as your home.  However, a Federal Law was passed at the end of 2005, the Personal Affairs Law (No. 28 of 2005),  which may allow a foreigner to opt for the laws of his own country to apply on the question of inheritance of his or her property. However, it is still unclear if this law applies to immovable assets (real estate property).  Article 11 of this Law states that any inheritance declaration that includes real property rights shall be registered in the real property register.  (However, this does not guarantee that the law of the home country will apply to the matter of real property.)   The law further states that no dispositions by any heir in connection with any such rights shall be valid or effective against third parties, unless such dispositions are registered. Therefore, in any event, it is important to register your interest in real property upon death of the owner.  In order to register the interest in the real property: The relatives of the deceased person must apply to the Court for a declaration that identifies the beneficiaries; The beneficiaries than apply to the Sharia’h Court to commence succession proceedings; and the inheritance declaration is registered on the deceased’s title at the Land Department.   The above-mentioned process must be followed in order for the beneficiaries to be possibly recognized as the owners of the property.

Procedure for Registering the Will at the Court:

  • The applicant  must have a valid residency visa to register the will with the Courts in the UAE.
  • The person making the will needs to visit the court. The presence of two Muslim men as witnesses with him or her to attest the application of the will is required. (even if the applicant is not a Muslim.)
  • Original copies of the ID of the applicant and witnesses have to be submitted.
  • Payment of Dh60 fees for each application is required. (subject to change)
  • The applicant needs to appear before a judge with the witnesses for an examination of the will application.
  • The applicant needs to submit documents which should be authorized by his or her country, regarding the terms of the will.
  • The applicant will later return to court to receive the certificate after submitting all the information.
  • But if the applicant wishes to cancel the will, the applicant will have to return to the court with the witnesses and pay a Dh60 fee  (subject to change) and submit all needed documents to get the will annulled.

Administering the Will:

Upon recognition by the UAE government authorities of the deceased’s representatives and confirmation that the will may be distributed in accordance with the laws of the country to which the deceased belonged, the trustees or executors can administer the deceased’s estate.  In order to get this approval, first an application must be made for a grant of representation in the deceased’s country of domicile. Once probate is obtained, it must be notarized, legalized and/or attested.  Furthermore, in the case of intestacy, a letter of administration, which is notarized, legalized, and/or attested, will also need to be obtained from the country of domicile.


Protect your Immoveable Property:

In order to ensure that your real property passes to the desired beneficiaries, it is recommended to form an offshore company with, for example, husband and wife as equal shareholders in the offshore company.  However, any desired beneficiary could be designated as a shareholder in the company.   US citizens should be cognizant of the fact that if a husband and wife jointly hold an offshore company, the dividends paid to the shareholders may be subject to a 35% tax under US tax law.  (US Citizens seeking further information about their tax obligations in this situation may contact me for further direction)  The memorandum of association of the offshore company would then contain a trigger clause stating that the surviving shareholder becomes the sole owner of the property upon the death of the other shareholder.   As shares are considered moveable property, the issue of Sharia’h law would not enter into the picture and the shares may pass according to the memorandum of association. 

Take Matters Into Your Own Hands:

It is also important to know that upon death, an expatriate’s residency visa is cancelled and those family members on their sponsorship must vacate the UAE within 30 days.  Furthermore, the local individual and joint bank accounts of the deceased expatriate will be frozen until probate and a court order are obtained, usually within the vicinity of one to two years.  Therefore, it is important for an expatriate married woman to keep cash in an offshore bank account to ensure a cash flow in the event of a tragedy.  It is also advisable to take out an annuity policy in the event that you have a mortgage or you risk having your house re-possessed in the event that you cannot make the mortgage payments during the time which the bank accounts are frozen and probate is being obtained.  Before settling in the UAE as a family, it is important to be aware of the UAE inheritance and wills, trusts, and estates laws.  Make sure to put arrangements  in place which will secure the livelihood of your family in the event of a tragedy.

A Comparison of Unfair and Arbitrary Dismissal Under UAE and Dubai International Financial Center or “DIFC” Employment Law


Although many similarities exist between the United Arab Emirates or (“UAE”) Labor Law, Federal Law No. (8) of 1980[1] and the Dubai International Financial Center or (“DIFC”)  Employment Law, DIFC Law No. 4 of 2005[2], one crucial difference is that there is no enforceable concept of unfair or arbitrary dismissal under DIFC Employment Law.

Under Article 123[3] of the UAE Labor Law, a worker whom has been arbitrarily dismissed may receive up to three months salary based on the last remuneration the worker received without prejudice to the termination notice allowance and the end-of-service gratuity the worker is entitled to under the law. 

According to Article 122[4] of the UAE Labor Law, a worker may be deemed to have been arbitrarily dismissed if  “the reason for the termination is irrelevant to the work and more particularly, if the reason is that the worker has submitted a serious complaint to the competent authorities or has instituted legal proceedings against the employer that has proved to be valid.”  However, in Abu Dhabi Court of Cassation Judgment No. 133/14 dated 8 November 1992[5], the Court of Cassation held that termination of employment based on company reorganization due to falling world oil prices was justified under the UAE Labor Law.[6]  In a more positive light in terms of employee rights, Dubai Court of Cassation Judgment Number 25/98 dated 2 May 1998[7] states that if moving an employee to a less privileged position causes the employee to resign, acceptance of the resignation by the employer is deemed actionable on the basis of arbitrary dismissal.[8]  Although the concept of arbitrary termination exists under UAE Labor Law,[9] the court may apply the law on a case-by-case basis and is not bound by precedent. 

In contrast, the DIFC Courts are bound by precedent, however, the DIFC Employment Law[10] does not recognize the concept of unfair or arbitrary dismissal.  The DIFC Employment Law,[11] however, is equipped with a grievance procedure where in which employees can file complaints, investigations can be conducted, and a wide variety of remedies may be ordered by the Director of Employment.  According to Article 65[12] of the DIFC Employment Law, an employee may file a complaint with the Director of Employment to resolve employment disputes.  Although the Director of Employment can make determinations and orders under Article 68[13] of the DIFC Employment Law including a wide array of remedies including inter alia to hire a person and pay the person any wages lost because of the contravention; reinstate a person in employment and pay the person any wages lost because of the contravention; pay all wages to an employee; pay a person compensation; pay a person any amount the Director determines is owing under any provision of the Law or Regulations; taken within a specified period, any action the Director considers reasonable that eliminates or reduces the adverse effect on the complainant of any matter relating to the complaint; pay an employee, or other relevant person, reasonable and actual out-of-pocket expenses incurred because of the contravention; limit the hours of work of employees to the hours or schedule as specified by the Director, post notice, in a form and location specified by the Director respecting a determination or a requirement, or information about this law or the regulations; or employ, at the employer’s expense, a payroll service for the payment of wages to an employee, currently under the DIFC Employment Law, there is surprisingly no protection for a worker whom has been arbitrarily or unfairly dismissed.   In the case of Rasmala Investments Limited v various Defendants CFI 001-006/2009 under the Judicial Authority of the Dubai International Financial Center,[14] Justice Tan Sri Dato’ Seri Siti Norma Yaakob ruled that the DIFC Employment  Law[15] makes no provision for an employee to claim for unfair dismissal.  Justice Yaakob stated that, “At most, the Employment Law gives power to the Director of Employment Standards to administer the Law by proposing Regulations to be made to include matters not dealt with by the Law.”[16]

Under Clause 63(1)(g)[17] of the DIFC Employment Law, the Director may propose Regulations to the Board of Directors of the DIFC Authority in respect of any matter that facilitates the administration of the Law or furthers the purpose of the Law, including but not limited to: (g) the maximum compensation for discrimination or unfair dismissal.  Thus, the Director of Employment technically possesses the power under the DIFC Employment Law[18] itself to propose to the Board of the Directors of the DIFC Authority to amend the DIFC Employment Law[19] to include a provision for unfair dismissal based on the relevant provisions of the UAE Labor Law[20] in order to make the DIFC Employment Law[21] more balanced in terms of the employer/employee relationship and to make the DIFC more employee friendly in addition to investor friendly.    

Although the concept of arbitrary termination  exists under the UAE Labor Law,[22] it depends on a case by case basis on how the concept is applied.   In addition, although the concept of arbitrary termination and unfair dismissal currently does not exist under the DIFC Employment Law,[23] the DIFC Employment Law[24] itself provides an avenue for the Director of Employment to attempt to amend the law to include such a concept. 

[1] UAE Labor Law, Federal Law No. (8) of 1980.

[2] DIFC Employment Law, DIFC Law No. 4 of 2005.

[3] UAE Labor Law, Federal Law No. (8) of 1980, Article 123.

[4] UAE Labor Law, Federal Law No. (8) of 1980, Article 122.

[5] Abu Dhabi Court of Cassation Judgment No. 133/14 dated 8 November 1992.

[6] Price Richard and Essam Al Tamimi, “United Arab Emirates Court of Cassation Judgments 1989 – 1997”, p. 341.

[7] Dubai Court of Cassation Judgment Number 25/98 dated 2 May 1998.

[8] Richard Price and Essam Al Tamimi, “United Arab Emirates Court of Cassation Judgments 1998 – 2003,’ p. 395.

[9] UAE Labor Law, Federal Law No. (8) of 1980.

[10] DIFC Employment Law, DIFC Law No. 4 of 2005.

[11] Ibid.

[12] Ibid, Article 65.

[13] Ibid, Article 68.

[14] Rasmala Investments Limited v various Defendants CFI 001-006/2009 under the Judicial Authority of the Dubai International Financial Center.

[15] DIFC Employment Law, DIFC Law No. 4 of 2005.

[16] Ibid.

[17] DIFC Employment Law, DIFC Law No. 4 of 2005, Article 63(1)(g).

[18] DIFC Employment Law, DIFC Law No. 4 of 2005.

 [19] Ibid.

[20] UAE Labor Law, Federal Law No. (8) of 1980.

[21] DIFC Employment Law, DIFC Law No. 4 of 2005.

[22] UAE Labor Law, Federal Law No. (8) of 1980.

[23] DIFC Employment Law, DIFC Law No. 4 of 2005.

[24] Ibid.

Guide to handling disputes at the Ministry of Labor – Dubai


If you as an employee have a labor dispute in Dubai, you must first file an application to settle the dispute at the Ministry of Labor (MOL).  You must consult a local lawyer, explain to the lawyer your case, and have the lawyer draft a file for you in Arabic to take to a Ministry of Labor typist.  The typist will then transfer the information which the lawyer has prepared for you in Arabic on an official Ministry of Labor application.  You must take with you a copy of your employment contract issued by your employer and the employment contract submitted by your employer to the Ministry of Labor in addition to your passport and labor card.  After you file the case, you will then appear along with your employer at the Ministry of Labor hearing.  If the matter is not resolved at the hearing, the dispute will be forwarded to the Dubai Courts for settlement.

Application Procedure:

  1. First, the same company the applicant is lodging his/her complaint against must sponsor the applicant.
  2. Submit an Application form.
  3. Submit a Copy of labour card and passport.
  4. Applicant must report complaint at the reception counter in labour relations’ section.
  5. MOL staff re-checks the details on the system.
  6. Appointment date will be made and printed out for the applicant.
  7. Given appointment date will not exceed 7-10 days from date of reporting.
  8. Reporting a complaint does not take more than 2 minutes at the counter.
  9. Complaint submission timing is from 8am- 12 pm.
  10. Eventually all complaints are sent to GM for distribution to inspectors.

 Appointment Procedure:

  • Employee and employer must be present at appointed time.
  • Receptionist will verify attendance.
  • Receptionist will then coordinate meeting with the legal advisor.
  • The legal advisor takes 10 – 30 minutes to go over the case before starting  the hearing.
  • In case of absence of one of the involved parties, 30 minutes extra time shall be granted and a new appointment shall be given.
  • If both parties agree upon a mutual agreement, a legal advisor drafts a document that shall be signed by both parties.
  • If both parties cannot resolve the case then the legal advisor drafts a letter and forwards it to the court, and informs the applicant to return in 2-3 days.

 Documents required to transfer case to Dubai Courts:

  • Copy of labour card and passport
  • Copy of the complaint
  • Copy of the labour contract (2)
  1. When the applicant returns, he or she takes the letter from the reception counter and signs a receipt of the letter.
  2. The applicant goes to the court and registers the complaint.
  3. The labour file will be transferred to the archives to enter the details and the results of the complaint.
  4. If the applicant does not attend the court within 2 weeks, the complaint will be transferred to the archives.
  5. If the applicant retracts the case, the case will be transferred to the archives.

 Absentee Procedure:

  • In case the accused does not show up, after being informed three times, the case will be transferred to the inspection department and this department will take the appropriate action.
  • In case of absence, the management transfers the case to the labour relations department to be investigated.
  • In case the employer cannot be reached, the inspection department sends a report to labour relations management to take the appropriate actions.

It takes two weeks to one month to contact the employer.


Resolving a Dispute involving Rent or a Lease in Dubai



Location of DMRC or Dubai Municipality Rent Committee
Dubai Municipality Rent Committee
Third Floor, Dubai Municipality Building
Baniyas Road, Al Rigga, Deira,
Telephone:+971 (0)4-221 5555

Working Hours: 7:30 a.m. – 2:30 p.m. (Sunday – Thursday)
Location map


If either a tenant or the landlord has a dispute over rent based on the U.A.E. Civil Code or the Lease Contract which cannot be settled amicably amongst themselves, either party may bring the case to the Dubai Municipality’s Rent Committee (DMRC). The decisions of the DMRC are final and binding and cannot be appealed.  DMRC decisions are executed through the Execution Department of the Dubai Court of First Instance.

In order to file a dispute with DMRC, you must first ensure that your rent contract is registered with RERA.  (Register your rental contract in Dubai).  The Real Estate Regulatory Authority (RERA) of the Land Department has made it mandatory for all rental contracts to be registered through Ejari.  Rental contracts can be registered by the landlord or the tenant through Ejari online and the required sample lease contract form can be found at  You must fill in information such as inter alia your passport, ID, and visa number, DEWA consumer number, plot, and community address.  You can also register the lease contract in person at Ejari on the Ground floor of the Land Department in Dubai. 

After you file the case with DMRC, a hearing date will then be granted. On the hearing date, both parties must attend or appoint lawyers to attend to argue the facts of the case with the Rent Committee.  The final and non-appealable written judgment shall be issued by the Rent Committee in an average of one to two weeks. 


In order to file a case with the DMRC, the Plaintiff shall pay 3.5% of the annual rent with a minimum of AED 350.00 and a maximum of AED 20,000.00    Appointing experts may cost 1.5% of the annual rent amount but shall not exceed a maximum of AED 1000.00.  Other fees may be levied on the plaintiff by the DMRC to finalize the case.

  1. Facts of Dispute;
  2. Lease Contract; (Note: For plaintiffs who are tenants, but cannot submit the original tenancy contract with the new rent terms due to refusal from the landlord, you can fax a request to the landlord and submit the fax receipt as proof to DMRC.);
  3. Dubai Municipality Affection Plan if the Defendant is the Tenant  (Title Deed if the premises is located in free zone areas if the defendant is the tenant; Passport Copy for the tenant and landlord; Copy of Valid Trade license for the tenant and landlord;  Authorization to the person in charge to attend; Notarized POA (Power of Attorney) in favor of person authorized to represent the plaintiff; Premises type, Number and street number)
  4. Plot six digit number and zone number;
  5. Other documents (if any) such as correspondence, all prior subpoenas, electricity, water bills, fines, etc.;
  6. In case an owner requests the tenants to vacate the residency for diminishing property for renovation purposes, he/she must obtain the all the approval documents from the concerned departments;
  7. The property owner must present a current tenancy contract or the management contract to prove the relationship with the lease office;
  8. Address of Plaintiff including: – Fix line No., Mobile No., Fax No., E-mail and P.O. Box No.;
  9. Receipt of payment, 3.5% of the value of the lease;
  10. Original lease contract certified by Dubai Land Department;
  11. Copies of cheques that were submitted to the landlord;
  12. A copy of the legitimate heirs.

A Developer can Terminate a Defaulting Purchaser through the Real Estate Regulatory Authority of Dubai (RERA)



A developer may attempt to terminate a defaulting purchaser through RERA as it may be a lucrative business decision for the developer or the project may have been cancelled openly or in secret.

According to Law No (9) of 2009 Amending Certain Provisions of Law No (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai, the amount the developer is entitled to retain upon termination depends on the construction status of the project.  For instance, if there is 1-59% of construction completed, the purchaser may be required  to pay 25% of the entire purchase price upon termination of the contract.  If the developer completed 60% of the project, the purchaser may forfeit 40% of the purchase price.  If the developer completed 80% of the construction, the purchaser may be required to pay the full purchase price and lose the unit(s).  If no construction has commenced, the purchaser may forfeit 30% of the amount already paid. 

Indications that the developer may intend to terminate a purchaser include  inter alia the fact that the developer has been fulfilling the requirements of terminating through RERA.  These requirements include but are not limited to: registering units at the Interim Registry of the Land Department and sending out  revised payment  plans linked to construction milestones.   Furthermore, if a developer has suddenly commenced round the clock construction, a developer may be trying to attain a certain percentage of construction before terminating a purchaser in order to ensure the most lucrative outcome for the developer.  Another clue which may indicate that a developer would like to terminate a purchaser includes ultimatums to move to another project with simultaneous threats to cancel the purchaser if the offer is not accepted.  Keep in mind that moving a purchaser to a new unit/project without purchaser consent is a breach of  UAE contract law.

Therefore, if a purchaser has clued into a possible termination,  it is advisable to take pre-emptive and swift action to get the sale and purchase agreement cancelled based on developer breaches in order to ensure the best possibility of receiving a refund of  the monies paid towards the purchase price.  The first step a purchaser can take includes filing a case for an expert report in the Dubai Courts which costs 750.00 AED plus lawyer fees.  The report will among other things reveal the status of construction.  If the purchaser would like to go ahead with filing a case for cancelling the contract, the purchaser can then amend the expert report case in the Court of First Instance in the Dubai Courts, which would require the payment of an additional 30,000.00 AED plus lawyer fees.  Upon winning the case, the 30,000.00 AED court fee is refundable.   However, the jurisdiction of the  Dubai Court is subject to the dispute resolution clause contained within the sale and purchase agreement.

Dubai Property Dispute Guide


Is your money stuck in a property investment which seems perpetually in limbo? Having a problem navigating your way through Dubai’s property law and dispute mechanisms? Are you wondering what is the most recent updated version of the law and how it applies to your dispute? Would you just like to get the dispute settled?

The first step to resolving a property dispute is to examine the reservation form and sale and purchase agreement. What are the terms and conditions of the sale? What is the governing law of the contract and what court or arbitration center has jurisdiction to settle the matter? For example, many sale and purchase agreements designate either the Dubai Courts or the Dubai International Arbitration Center (DIAC) as the dispute resolution mechanism.

If the Sale and Purchase Agreement has an arbitration clause designating the Dubai International Arbitration Center as having jurisdiction to settle the matter, the party filing the case must follow the procedure as set out in the arbitration clause in the sale and purchase agreement and according to DIAC rules. One should hire a local law firm to run the case through DIAC. The process usually takes about six months after which DIAC issues an arbitral award resolving the matter. After the Claimant files the Request for Arbitration and Statement of Claim, the Respondent has thirty days to respond in writing. The Respondent must produce an Answer to the Request, a Statement of Defence, and any Counterclaims which the Respondent may have. The Claimant will then be given a chance to comment on any objections or pleas advanced by the Respondent. During the proceedings, the DIAC arbitral tribunal may require inter alia hearings and/or expert opinions and/or evidence in order to complete the proceedings.

Whether running a case through the Dubai Courts or the Dubai International Arbitration Center, the plaintiff purchaser may want to run through several initial questions in order to identify breaches of contract or law by the developer.

Questions to Ponder:

1. Is the project and developer registered with the Real Estate Regulatory Authority or RERA on the RERA website?
2. Is the unit registered in the RERA interim registry?
3. Is an escrow account being used and is it registered with RERA?
4. Was the land which the developer is developing 100% purchased before construction started?
5. Did the developer have the required marketing license before construction commenced?
6. Has construction commenced?
7. Did the developer change the terms and conditions of the contract in any material way without your consent?
8. Was there any misrepresentation involved in inducing you to enter into the contract at the point of contracting?
9. Examine the default and pre-estimated liquidated damage clauses. If too harsh, they may be struck down by the Courts.
10. Has the handover date requirement been met?
11. Were you ever given a reservation or sale and
purchase agreement?

Handing the matter over to experienced local real estate lawyers is the next step to resolving your property dispute. The ability to identify breaches from the developer’s side combined with experience of running property disputes through the Dubai Courts and the Dubai International Arbitration Center will ensure the best chances of obtaining a successful outcome for your property matter.

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance