Tim Elliott
Welcome to Lawgical, the UAE’s first and still the only regular legal podcast. My name is Tim Elliott. Our expert is the Managing Partner of the Dubai-based legal firm, Yamalova & Plewka, Ludmila Yamalova. Good to talk to you.
Ludmila Yamalova
Good to be here with you, Tim, as always.
Tim Elliott
This episode covers everything you need to know, should know, and want to know about powers of attorney. So, Ludmila, how do you empower someone else to act on your behalf in the UAE? Is it a formal process? Is a simple representation or agreement sufficient proof? How does it work?
Ludmila Yamalova
Yes, the UAE requires a formal process to empower someone to act on your behalf. This is done through an official, notarized power of attorney (POA). The use of POAs is quite common here, more so than in many other countries. It’s crucial to understand how they work because, unlike in some places, a simple agreement or representation of authority is not sufficient in the UAE.
To effectively authorize someone, you need a notarized POA issued by a notary or government agency. Whether dealing with government entities or private parties, the first thing they will request is a valid POA. It’s a common practice for agents or representatives to present a POA as proof of their authority to act.
One relevant example is for lawyers. When a client retains a lawyer, they typically issue a POA, whether it’s for legal consultants like us or local advocates representing clients in court. This is distinct from countries like the US, where a simple engagement agreement between lawyer and client suffices, even for court representation. In the UAE, without a POA, legal representation cannot proceed.
Tim Elliott
That’s fascinating. So, for lawyers, having a POA is a mandatory part of representation?
Ludmila Yamalova
Yes, absolutely. For instance, a local advocate representing a client in court must register the POA with the court. The case cannot progress without it. The advocate must upload the POA to the court system or physically present it to establish their authority to represent the client.
This is not just unique to lawyers but applies across various aspects of life and business in the UAE. Real estate transactions are another common area where POAs are frequently used. Because POAs are so integral to daily business and legal operations, they can be extremely helpful—or extremely dangerous—depending on how they are managed.
Tim Elliott
What do you mean by “dangerous”?
Ludmila Yamalova
A POA grants someone the authority to act as you. Any action they take under the scope of that POA is legally as if you took it yourself. So, it’s critical to ensure that the person you empower is trustworthy and that the scope of the POA is clearly defined.
For instance, if I issue a POA to you, I’m the principal, and you are the agent. If you misuse that authority, intentionally or unintentionally, it could lead to significant consequences for me. Hence, the scope of authority granted under a POA must be limited and specific.
Tim Elliott
What does a POA look like, and who executes it? Can you, as a lawyer, sign a POA?
Ludmila Yamalova
No, lawyers in the UAE cannot notarize POAs. For a POA to be valid, it must be signed and notarized by a licensed notary public. Notaries in the UAE operate under the jurisdiction of the courts. For example, in Dubai, notaries are licensed by Dubai Courts, and any notarized document will bear the court’s official stamp.
This process ensures that POAs are formal, official documents. Unlike in some countries, such as the US, where notaries are often less formal, UAE notaries are government-authorized professionals, and the POA issued is akin to a court-issued document.
Tim Elliott
Is there specific legislation in the UAE governing POAs?
Ludmila Yamalova
Yes. Two primary sources of legislation govern POAs: the UAE Civil Transactions Law and the UAE Criminal Code (Crimes and Punishment Law).
The Civil Transactions Law defines the relationship between principal and agent and outlines the conditions and limitations of POAs. For example, certain powers, such as selling property or company shares, have specific conditions attached under this law.
The Criminal Code addresses potential misuse or abuse of POAs. It includes provisions for penalties in cases of fraud, breach of trust, or misrepresentation.
Tim Elliott
Where can someone find a notary in the UAE?
Ludmila Yamalova
Each emirate has its own notary centers, as notarial services operate under the courts’ jurisdiction. For example, Dubai has multiple centers under Dubai Courts, while Abu Dhabi has its own system under Abu Dhabi Courts. The other four emirates operate under the federal system governed by the UAE Ministry of Justice.
In recent years, the number of notary centers has increased to accommodate the growing reliance on POAs. Additionally, the introduction of private notaries and digital notarization services has made the process even more accessible.
Tim Elliott
What are the steps to notarize a POA online?
Ludmila Yamalova
The process varies slightly depending on the emirate and whether the principal is a UAE resident. For example, Dubai residents can use the Dubai Courts portal via their UAE Pass. Non-residents can utilize the UAE Ministry of Justice’s online services.
Once the draft POA is submitted, the notary will verify the principal’s identity, often through a video call or an OTP verification system. Once confirmed, the notarization is completed, sometimes in as little as an hour.
Tim Elliott
Does a POA have to be in Arabic, or can it be in other languages?
Ludmila Yamalova
Historically, POAs had to be in Arabic, with translations certified by a legal translator. Today, POAs can include multiple languages, such as English, Russian, or Chinese, without requiring separate legal certification. This evolution has significantly streamlined the process, especially for those using POAs internationally.
Tim Elliott
What are the general requirements for granting a POA?
Ludmila Yamalova
The principal must be at least 21 years old, of sound mental capacity, and have the legal right to delegate the powers outlined in the POA. The agent must also be eligible to exercise the delegated powers.
The scope of the POA must be clearly defined. For example, a POA to sell property must specify the property and conditions. Certain matters, like managing bank accounts or representing someone in criminal cases, may not be enforceable under a POA due to additional legal requirements.
Tim Elliott
How is an agency relationship terminated?
Ludmila Yamalova
A POA can be terminated in several ways:
- Completion of the task for which it was issued.
- Expiration of the POA’s validity if it has a time limit.
- The death of the principal.
- Cancellation by the principal or renunciation by the agent.
To cancel a POA, the principal can visit a notary or use online services. It’s also essential to notify the agent and relevant parties of the cancellation to prevent unauthorized use.
Tim Elliott
What are the key lessons from today’s discussion?
Ludmila Yamalova
- Always limit the scope and duration of a POA.
- Be cautious about granting broad or delegation powers.
- Monitor and regularly review issued POAs, canceling those no longer needed.
- Understand the risks and ensure you trust the person you empower.
- Take advantage of the UAE’s improved notary systems, including digital services, to make the process secure and efficient.
Tim Elliott
That wraps up this episode of Lawgical, exploring the ins and outs of powers of attorney. Thank you, Ludmila Yamalova, for sharing your expertise.
Ludmila Yamalova
Thank you, Tim.
Tim Elliott
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