A: The claimant is first required to file its claim on the DIFC Courts website. After the defendant acknowledges service, the SCT Registry will schedule a consultation with both parties, with the aim of reaching an amicable settlement. If the parties do not settle the dispute, the case will progress to a hearing before an SCT judge, who will then rule on the matter. Throughout the proceedings, parties are given time to make submissions and provide evidence in favor of their respective positions.
A: SCT judgments are not final and binding by default; there is an appeal process which may grant a party the right to appeal the judgment. If the SCT judgment is not successfully appealed, it becomes final and binding.
A: Regardless of their location, any party can opt-in to the DIFC Courts’ jurisdiction by including the following language in the relevant commercial contract: “Any dispute, difference, controversy or claim arising out of or in connection with this contract, including (but not limited to) any question regarding its existence, validity, interpretation, performance, discharge and applicable remedies, shall be subject to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre (“the DIFC Courts”).” If a party specifically wishes for the SCT to hear the claim, it is best to also mention this in the contract.
A: The SCT is part of the DIFC Courts, which is its own common law jurisdiction. The language of the SCT proceedings, as well as the corresponding documentation, is English. SCT hearings are meant to be conducted by the parties themselves, hence their informality.
A: No; SCT proceedings are, for the time being, conducted entirely online.
A: The SCT typically awards the claimant’s filing fees, if the claim is successful. Generally, other expenses are not recoverable.
A: For employment claims, the filing fee is 2% of the claim value. For all other claims, the filing fee is 5% of the claim value. The minimum filing fee is USD 100.00.
A: SCT proceedings are held in private. SCT judgments are publicly available, though the names of the parties are changed to maintain their privacy.
A: SCT cases typically last around two months, from the date of filing up until the judgement is issued.
A: No, in fact, parties within the SCT are supposed to represent themselves. There are exceptions however, as the SCT may allow parties to be represented by legal counsel.
A: For disputes that are subject to the DIFC Courts jurisdiction by default, the SCT will hear commercial and civil cases that are within the claim amount threshold. For those opting in to the DIFC, the SCT will only hear commercial claims.
A: When opting into the DIFC Courts, a “small claim” is, by default, any commercial claim up to AED 500,000.00. This cap can be increased to AED 1,000,000.00, if the Parties agree to do so in writing.
A: Investing in Off-Plan Properties – Legal Pointers for Sound Investment.
If you are considering investing in an off-plan properties, make sure to do the following:
A: Upon selling the property, the purchase price has to be paid by way of a manager’s cheque, issued in the name of the seller himself. The practical issue of the manager’s cheque is that the Seller must have a U.A.E. bank account in order to cash it. If the seller does not have a bank account, he can give an undertaking to the Transfer Center that he has received the money.
The alternative ways for the Seller to receive the money are: 1) in cash, 2) bank transfer, 3) regular cheque or 4) in the manager’s cheque in the name of someone else. The complications that arise from each one alternative are: there is a form of impracticality that comes with dealing with cash and fund transfers, alongside the risk of fake currency. Bank transfer also cause a time delay between the transfer of property and receipt of the funds through bank transfer. While a personal cheque may bounce after the transaction has taken place. If the aforementioned is not the case, a successfully cashed cheque brings back the first-mentioned complication. Lastly, the fourth option is an immense risk unless the 3rd party’s name is highly trustworthy. If that was the case, there could be good-faith complications with the person who receives the cash on behalf of someone else (e.g. sickness, death).
A: Increasingly, landlords try to evict tenants for alleged reason of “personal use,” a valid reason under the law. They then re-rent the property for a higher amount, which they would not have been able to do with the previous tenant because of the Dubai rental laws restrictions. If the previous tenant has proof that this was the case (e.g. copy of Ejari showing the property has been re-rented to a new tenant), he can pursue action against the landlord in the Dubai Rental Committee (RDC). Under the law, the landlord is not allowed to re-rent the property for either two years (if it is residential) or three years (if it is commercial). The law provides tenants with a recourse in the event they find out that they have been unfairly evicted, by seeking compensation for the “damages suffered.” While the law does not specify the bases for calculating damages, RDC considers elements such as an increase in rent between the new property and old property (but they must be of similar specifications), moving expenses and any other relevant expenses. There have been several RDC judgments in favour of tenants, awarding damages against the landlord, on such bases.
A. The issue of utility expenses, between landlord and tenant, is up to the parties’ agreement. Under most rental agreements, utilities (including DEWA) are the responsibility of the tenant. Most agreements do not address extraordinary expenses, such as an increase in water usage when the pipe bursts. Therefore, it is arguably the responsibility of the tenant to pay for the utility bill. But the landlord would be responsible for the payment of the repair of the pipe (unless parties agreed otherwise). Under Law No. 33 of 2008 Article 16, “unless otherwise agreed by the parties, the Landlord will, during the term of the Tenancy Contract, be responsible for the Real Property maintenance works and for repairing any defect or damage that may affect the Tenant’s intended use of the Real Property.” Therefore, in the absence of a prior agreement to the contrary, the tenant should try to negotiate with the landlord to split the difference in the increased DEWA bill, but be prepared to have to settle the invoice in full, should the landlord refuse. The focus moving forward, however, has to be to repair the pipe, to avoid further expenses. The repair of the pipe will then be the responsibility of the landlord.
A. If a large number of non-Emirati investors (20) wish to collectively buy a real estate property and designate one person to manage it, the best way of doing so is to set up a free-zone corporation. This corporation would be owned by the 20 investors, in which their ownership interest would be represented in terms of a number of shares. The company would then designate a manager, prescribing the manager’s roles and roles of the other officers of the company through corporate documents, e.g. articles of incorporation, memorandum of association, board resolutions, etc.
A: An employee will be automatically confirmed upon expiration of the probation period, unless terminated. This is irrespective of what may be stated in the employment contract and/or offer letter. Furthermore, probation period cannot be extended, for any reason.
A: There is no default provision in the UAE Labour prohibiting employees from joining a competitor. The non-competition limitation must be contractually agreed. If there is no non-competition clause in the employment contract, then there is no restriction on joining a competitor. If, however, there is a non-competition clause in the employment agreement, it will be valid if it is reasonable in its scope. Furthermore, a non-competition claim requires proof of actual damages.
A: For the purpose of calculating the end of service benefits under Article 132 of the UAE Labour Law 8 of 1980 (as amended), the salary used for the calculation includes everything, except allowances and occasional bonuses. This means that any regular payments, such as commissions and regular bonuses (regardless of their description), other than allowances, are considered as part of the salary used for the end of service calculation. This principle was established by the Dubai Courts of Cassation more than twenty years ago and has been regularly applied by the courts ever since.
A: Yes, if the following conditions are met:
1. The employee has a valid labour card.
2. The employee’s visa’s sponsor gives a No Objection Certificate (“NOC”) permitting the additional employment.
3. You obtain a part-time work permit from the Ministry of Labor/ Free zone authority for the employee.
A: As a general rule, the UAE does not monitor whether or not a UAE resident was working while outside the UAE. However, should the resident spend more than six consecutive months (180 days) outside the UAE, their UAE residence visa will be canceled.
A: No. Your end of service benefits becomes due upon the termination of your UAE employment contract.
A: When an employee breaches a limited contract, she or he can be held liable for damages incurred by the employer as a result of the early resignation. These damages may not include visa-related expenses and may not exceed the value of one-and-a-half months’ of the employee’s salary. If the employee has less than three months left in the employment contract, the maximum penalty is the value of half a month of the employee’s salary for every month remaining on the employee’s limited contract. If the early termination penalty exceeds one-and-a-half months’ of the employee’s salary, it will not be enforced. The aforementioned compensation requires a Court order. It should not be applied automatically.
A: No. It is illegal to require an employee to pay for visa expenses, regardless of how long the employee has been employed or the circumstances of the employee’s termination.