Under UAE law, the process of empowering one to make or perform acts on behalf of another must follow the necessary formalities to ensure its legality and accountability. In contrast to many Western practices, the UAE requires a higher sense of formality, and mere agreements or simple representations cannot suffice for this purpose. The following article will take a closer look at Powers of Attorney in the UAE, explaining, amongst other things, the requirement, the process, and the resulting legal implications.
What is a Power of Attorney?
The Power of Attorney is a formal legal document that has been executed by one person, called the principal, authorizing an agent to act for that person. It establishes a kind of agency relationship wherein the agent can do specific acts or make decisions in the name of the principal.
Why is POA important?
In the United Arab Emirates, it is very important that a POA for representation should be available whenever a deal in private transactions or in dealing with any government agency is to be made. Unlike in some Western jurisdictions where less formal agreements might be acceptable, a POA in the UAE must be officially notarized. This is just to ensure that in all dealings, legal clarity is accorded to all parties involved and that whatever actions will be taken are within the ambit of the law.
The Formal Process
1. Notarization Requirement: In the UAE, a POA must be notarized by an official notary. Notaries in the UAE are licensed professionals under the jurisdiction of UAE Courts, which guarantee the authenticity of the document and validity in law. The documents notarized bear official court stamps regarding their authenticity.
2. Legislation that will govern POAs:
• Civil Transactions Law: The present law to regulate and define the formation and its validity. While the law does not dictate detailed formalities, it does provide that as a minimum, notarization is a pre-requisite for legal enforceability.
• Criminally Committed Laws Sanctions. This corresponds to the abuse of POA; agents shall be held liable in case there is an offense against their duties and commitments.
3. Notaries: Each Emirate has its independent notarial centers, but for some, they are linked to either a particular Emirate’s Court or the Federal Court. In Dubai, notaries are accredited under the Dubai Courts. There is also the UAE Ministry of Justice that performs notarization.
Notary Services Today: The facilitation of notarization services has moved from physically visiting a notarial centre. There are also online options through:
• Dubai Courts Portal: An authenticating UAE Pass will be required. Drafts of the POAs submitted online will be verified for their details by the notary over the phone.
• UAE Ministry of Justice: A video link is provided wherein the notary will send an OTP for document confirmation.
Language and Translation Requirements: The POAs should at least be in Arabic, though other languages may be included such as English or Russian. It is no longer stringent to have a legal translation; therefore, it will be easier for the non-Arab speaking nationals.
General Requirements of a POA
1. Eligibility: The principal and the agent should at least be 21 years old and be of full capacity to enter into a contract.
2. Particular Conditions – Article 925, Civil Transactions Law:
• The principal should have the right to delegate the powers.
• The agent shall be legally competent to exercise the powers delegated to him.
• The purpose and scope of the agency are well defined.
• The agency does not need by its nature the personal attendance of the principal.
Types of Powers of Attorney
1. General and Absolute Power of Attorneys: Encompass broad powers in various matters.
2. Special Powers of Attorney: Narrowed to specific, particular transactions or areas of interest, such as:
• Real Estate Transactions: To buy or sell specific properties.
• Corporate Matters: To retain shares or business transactions.
• Geographical Restrictions: The location of representation – example, will be the DIFC.
International POAs
POAs are issued either for actions in and outside the UAE. International usage is increasingly occurring particularly now that multiple language formats have been permitted.
Legal Consequences of Breach
1. Civil Liabilities: In the event of misuse of the POA by the agent, the principal has the right to seek restitution of all damages or compensation for losses incurred. This is stated under Articles 944 and 958, Civil Transactions Law.
2. Criminal Liabilities: Misuse, such as embezzlement or fraud, may give way to criminal charges under the Crimes and Punishment Law, Article 453.
Termination and Cancellation
The agency relationship would be considered terminated upon:
• The completion of the intended tasks.
• When the POA expires or becomes limited by time.
• By death or legal incapacity of either party.
• By mutual agreement, or by unilateral termination by either party.
On the date of execution, cancellation of a POA should be executed by signature through a notary, either in person or online.
Common Abuses and Recommendations
The most frequent problems that one encounters with a POA are the misuse of it by estate agents or the issuance of fake POAs. To avoid those risks:
• It is highly advisable to limit as much as possible the scope and duration of the POAs.
• Bank and authorities must verify the genuineness and particulars of POAs relating to transactions, especially property transfer.
• Grants of POA are precautionary measures, with the use of judicial review.
Conclusion
The Powers of Attorney in the UAE are considered some of the most powerful weapons in the law, allowing a person to pass on authority. While providing ease and convenience, it also contains certain risks when not handled appropriately. Understanding formal requirements and their legal implications can minimize such risks and secure your rights and interests.
Further clarification and specific questions could be sought from lawyers who would lead you through the maze called POAs in the UAE.