Tim Elliott
Welcome to Lawgical, the UAE’s first and only legal podcast. My name’s Tim Elliott. Lawgical comes to you from the Dubai-based legal firm, HPL Yamalova & Plewka. And as ever, here is Ludmila Yamalova, the managing partner. Good to see you.
Ludmila Yamalova
Good to see you, Tim.
Tim Elliott
This time, and I’m fascinated by this, Ludmila. I’m a—or was—not so much these days, an avid watcher of auction shows on TV. And there are many of them.
But auction houses in the UAE—it’s not something I know much about. I’ve never really seen much on auctions here, but these days, you’re starting to see more and more. It was never something that factored much into UAE life, but it’s starting to change.
Ludmila Yamalova
Indeed, with one exception: we’ve had Emirates Auction. That’s a company and a service that has existed for quite some time. In fact, Emirates Auction is, at a high level, a government business—or at least a government-affiliated company—through which all auctions related to court proceedings take place.
So, anytime there are enforcement proceedings through the courts, all properties, assets—whatever is subject to the particular case—are auctioned through Emirates Auction.
Emirates Auction has existed for at least 10 years. I even remember when it was set up; it’s been in the UAE that long. It’s actually quite nifty, and there’s a special app where you can list your own items as well. You don’t necessarily have to go through the court process.
That said, for the most part, Emirates Auction relates to court or judicial proceedings. It’s not a portal people feel very comfortable using casually or daily. Not one that, as you said, Tim, you’d necessarily watch for fun because it has more of a judicial feel and application.
Tim Elliott
Now, I’m a sad, watching-afternoon-TV kind of guy, as you well know, Ludmila. But it’s interesting because I recently sold a car through one of these websites—something like “Sell Your Car and Give You No Money.com” or something like that—I forget the name.
Essentially, they bought the car, and they then sold it at auction. I was able to track that process, and it was auctioned at that level. So, is it easier now to get licensed to host auctions as part of your business model?
We’ll look at where you can do that in a moment, but first, from a legal perspective—and I think this is important—how are auctions defined in the UAE?
Ludmila Yamalova
An auction is ultimately just another type of business and therefore requires a specific type of license.
So, for example, when we talk about auctions, what we typically think of are art auctions, right? Sotheby’s or Christie’s, for instance—this is what often comes to mind when we think of auctions, particularly relating to art.
Now, Emirates Auction is not for this type of activity. Art-related auctions fall under the purview of Sotheby’s and Christie’s auction houses.
Putting Emirates Auction aside, anyone can set up an auction house in the UAE. It doesn’t have to be government-owned, government-related, or government-sponsored. Setting up an auction house is like starting any other business activity.
There’s a licensing activity called “auction activities” or “auction house license.” Several places in the UAE allow businesses to conduct auctions under this license. At a high level, there are a number of auction houses.
Ludmila Yamalova
For example, Sotheby’s and Christie’s are already established in the UAE and have been operating here for some time. These companies didn’t set up solely due to any special connections—or wasta as we call it in the UAE—but rather because the legal framework for auction houses exists.
There are several licensing options for auctions. Sotheby’s and Christie’s, for instance, are set up in the DIFC—the Dubai International Financial Centre, a free zone authority. This means the DIFC offers licenses for auction activities.
Additionally, the Dubai Department of Economic Development (DED), which governs mainland activities, also offers auction-related licenses. Other Emirates’ DED departments offer similar licenses.
Tim Elliott
So, these licenses allow flexibility for different types of auctions, correct?
Ludmila Yamalova
Exactly. Both the DIFC and DED offer similar classifications for auction licenses. For instance:
- Auction Hall: A commercial license for buying and selling goods like luxury cars, jewelry, or real estate. Unlike Emirates Auction, this caters more to luxury items and doesn’t go through the court system.
- Auction Organizing Activity: A professional license for organizing public auctions, obtaining permits, or leasing venues. This is more of a supporting service rather than conducting auctions directly.
- Authentic Artifacts and Antique Auction Houses: A commercial license for auctioning genuine artifacts, antiques, and artwork, subject to strict regulations.
You can combine these classifications into one license by paying additional fees. This flexibility allows businesses to cater to multiple auction-related activities.
Tim Elliott
And the procedures? Are they the same as traditional auctions—registering, bidding, and paying once the gavel falls?
Ludmila Yamalova
More or less, yes. Auctions are legally binding when the gavel falls. However, in the UAE, there’s often additional oversight to ensure commitments are honored. For example, Emirates Auction requires preregistration, identity verification, and financial guarantees before bidding.
Auction houses here have some flexibility to implement their own protocols. Still, government oversight ensures no illegitimate activities occur.
Tim Elliott
Why is this topic particularly relevant now?
Ludmila Yamalova
Recent geopolitical events, such as the Russian-Ukrainian conflict, have increased interest in auction houses. Many artifacts, luxury items, and art associated with Russia are now looking for alternative markets outside Europe.
While Sotheby’s and Christie’s dominate, there’s growing interest in setting up smaller auction houses in the UAE. The legal framework and regulations have existed for some time, but the demand for these platforms is now increasing.
Tim Elliott
It’s a fascinating topic—auction houses in the UAE, the what’s, where’s, and why’s, and how they work. Ludmila Yamalova, managing partner at Yamalova & Plewka, thank you, as always.
Ludmila Yamalova
Thank you, Tim.
Tim Elliott
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