Tag Archives: UAE Law

Purchasing a Property in Dubai? All You Need to Know

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

In order to purchase a property, a well-drafted Sale and Purchase Agreement is required which is commonly known as SPA in UAE. It is one of the primary requirements for the parties, and the parties can fail to scrutinize this document for a better understanding of their legal status pursuant to the laws of the UAE. Once both the parties, the buyer and seller agree to buy or sell a specific asset, they enter into a Sale and Purchase Agreement. We advise our readers to review the contents of the SPA carefully before signing and to seek legal assistance to protect their rights as per the laws of the UAE.

Every Emirate of UAE has enforced many laws regulating the real-estate transaction within their Emirate. Accordingly, Dubai has also issued laws to offer protection to buyers, post purchasing the property. Even though prevention is always better than cure. Thus, it is advised to all our readers to review the terms of the agreement or at least carefully investigate the following issues before signing the Sale and Purchase Agreement.

 

  1. TITLE DEED:

It is very important for the buyer to investigate or check properly, who is the real owner of the concerned property. Apart from reviewing the title deed, the buyer must also review the rights awarded to the owner of the property and should verify if there are any restrictions. Because the law comes to the assistance of those who are vigilant with their rights, and not those who sleep on their rights. Thus, reviewing the title deed of the property is compulsory.  

 

  1. RECORD OF PROJECT:

Each real estate project in the Emirate of Dubai is registered with either Land Department or through OQOOD as authorized by Real Estate Regulatory Authority of Dubai (RERA). Through convenient access to the website of either authority, one can ensure if the project is registered or not as the authority has provided a non-exhaustive list of approved projects in Dubai.

 

  1. DEVELOPER’S LICENSE:

Dubai Land Department has provided a list of developers registered with them, through which one can ascertain if the developer is holding a valid license and simultaneously registered with the authority. It is most important for the buyer to make sure that, the developer is registered with the Dubai Land Department.

 

  1. PARTIES IN THE AGREEMENT:

The Investors or buyers some time neglect to check the parties involved in the Agreement as sometimes there are many parties to the contract, i.e. the owner, developer, manager and the seller only refers to one party in the contract. Thus, it must be reviewed carefully.

 

  1. PAYMENT SCHEDULE:

The developers usually offer a lengthy schedule for the payments and the terms of the schedule could be extensive. It is very important to check and make sure that, the schedule for payment is linked to the construction milestones, and clearly sets out the amounts and percentages and due dates.

 

  1. ESCROW ACCOUNT:

The developers or contractors are obliged to maintain an escrow account for their projects in Dubai. All the investments made by them or the buyer’s instalments should be submitted in the same escrow account. Thus, it is essential for the buyers to seek details from the developer or RERA of the escrow account to ensure the security of investment amount.

 

  1. DISPUTE RESOLUTION CLAUSE:

Buyers must carefully study the governing law to ensure if the law regulating the contract is the law of the UAE. In addition, he must check the method for resolving disputes which can be either through UAE courts or independent arbitration centers. In case the contract opts for arbitration, buyers must seek legal advice from Arbitration Lawyers in Dubai.

 

  1. TERMINATION CLAUSE:

Termination provisions in a SPA are the most debatable clause as evident from the numerous cases filed before the competent courts in Dubai. In a general termination clause, the Developer retains the initial investment amount paid by the purchaser in the event of termination of the agreement or if the buyer fails to abide by his financial obligations. Accordingly, the buyer must carefully examine the termination clause allowing him to rescind the contract, upon default of seller’s obligations such as delay in handing over the property or failing to register the property with the authority and similar.

 

  1. COMPLETION DATE OF THE PROJECT:

Every sale purchase agreement has a completion date on which the seller will hand over the unit to the buyer. However, we have witnessed numerous cases, wherein the sellers fail to oblige with the hand over date. On the other hand, buyers being unaware of the completion date lose their right of terminating the property and seeking compensation. Therefore, buyers must determine the completion date of the project and should understand the legal consequences for the seller, if they breach the provision of the contract.

 

  1. AUTHORIZED SIGNATORY:

Sometimes, the developers authorize third parties to sign the contract on their behalf which is commonly known as authorized signatories. Thus, the buyers must carefully review power of attorney granting signatory rights to the authorized signatory.

For any queries or services regarding Purchasing Property and Reviewing Property Sale and Purchase Agreements in Dubai and the UAE in general, you can contact us at +971 4 3298711 or send us an e-mail on consultants@uaeahead.com . Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Enforcement of UAE Judgments in India – All You Need to Know

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

The Central Government of India, on 17th January 2020 notified an amendment to section 44 of the Indian Code of Civil Procedure (CPC), 1908 wherein the United Arab Emirates (UAE) has been declared as a “reciprocating territory” and accordingly, the civil judgments passed by the Courts of UAE can be directly executed in India.

The amendment provides a fast-track route for the UAE companies providing banking and financial services as they can recover the debts and enforce the UAE Court verdicts against the defaulters who fled to India with significant unpaid debts.

The notification issued by the Indian Ministry of Law and Justice reads as below –

“In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares, United Arab Emirates to be a reciprocating territory for the purposes of the said section and the following Courts in United Arab Emirates to be superior Courts of that territory, namely: –

(1) Federal Court–

(a) Federal Supreme Court;

(b) Federal, First Instance and Appeal Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah;

(2) Local Courts–

(a) Abu Dhabi Judicial Department;

(b) Dubai Courts;

(c) Ras Al Khaimah Judicial Department;

(d) Courts of Abu Dhabi Global Markets;

(e) Courts of Dubai International Financial Center.”

The outcome of the above notified amendment is that the orders passed by the above-mentioned ‘superior courts’ of the UAE can now be executed in India as if they had been passed by the Indian Courts. However, the benefit is extended to civil decrees only.

As per the Indian laws, the decrees passed by the foreign courts has no evidentiary value before the Indian Courts unless they are declared as ‘reciprocating territory’ under section 44 of the Civil Procedure Code of India.

The term “Reciprocating territory” has been defined under Explanation I of section 44A of the Indian Civil Procedure Code as “any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and superior Courts, with reference to any such territory, means such Courts as may be specified in the said notification.”

 

Procedure to be followed for the Execution of Decrees of UAE Courts in India

Section 44A of the Indian Civil Procedure Code, 1908 elaborates the procedure to be followed in order to execute the decrees passed by the UAE Courts in India.

1) A certified copy of the decree passed by the above-mentioned superior Courts should be filed before a District Court in India. The decree may be executed in India as if it had been passed by the District Court.

2) The applicant should, along with the certified copy of the decree, file a certificate from the superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.

(3) The provisions of section 47 of the Indian Civil Procedure Code shall, as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in clauses (a) to (f) of section 13.

The third condition implies that if the decree passed by the UAE Courts fails to fulfil the requirements provided under section 13 of the Civil Procedure Code of India, it cannot be enforced using the benefit of the subject notification.

Section 13 of the Indian Civil Procedure Code provides for a ‘Test for Conclusiveness’, in failure of which, a foreign judgment cannot be treated as conclusive. In simple words, a foreign judgment can be refused by the Indian Courts in the following circumstances;

(a) where it has not been pronounced by a Court of competent jurisdiction;

(b) where it has not been given on the merits of the case;

(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable;

(d) where the proceedings in which the judgment was obtained are opposed to natural justice;

(e) where it has been obtained by fraud;

(f) where it sustains a claim founded on a breach of any law in force in India.

Even though the implementation of the recent notification of the Indian Government is subject to the above procedures and conditions, the declaration of the UAE as a reciprocating territory will have a significant impact as it safeguards the companies here to proceed against the defaulters who fled to India in order to avoid prosecution by the UAE Courts.

Prior to the amendment, executing such judgments in India previously entailed double the cost and time due to filing a fresh suit with the concerned Courts in India; following the standard procedures of acquiring a favourable judgment and then filing an enforcement action against the defaulter. The amendment came up with a solution for all these complications.

For any queries or services regarding Enforcement of UAE Judgments in India, you can contact us at +971 4 3298711 or send us an e-mail on consultants@uaeahead.com . Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Gratuity Benefits and its Calculation under UAE Labour Law

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

The term “gratuity” refers to a monetary benefit given by the employer to his employee in the event of retirement, resignation or termination of services.

The practice of giving gratuity has originated in order to ensure that patrons receive the best service possible. This practice has later evolved as a custom which allows rewards to the service providers for providing good services.

Under Article 133 of the UAE Labour Law, the worker shall be entitled to a gratuity for the served fraction of a year provided that he completes one year of continuous service. In simple words, an employee who has spent one year or more continuous service is entitled to gratuity as an end of service benefit. Therefore, an employee, who served for less than one year is not legally entitled to get gratuity.

Further, as per Article 135, the employer may deduct from the end of service gratuity any amounts due to him by the worker.

 

Computation of Gratuity

Under the UAE Labor Law, the method of calculation of gratuity is different according to the nature of the employment contract, whether limited or unlimited.

Further, as per Article 134 of the UAE Labour Law, the calculation is based on the last wage due to monthly, weekly and daily – paid workers. In case of the workers getting paid by the piece, the calculation would be on the basis of average daily wage.

For this purpose, the term ‘wages’ shall not include allowances for housing, transport and travel, overtime pay, representation allowances, cashier’s allowances, children education allowance, allowances for recreation and social services, and any other bonuses or allowances.

With regard to the calculation of gratuity,

1. Under Limited Contract (contract with limited term)

On termination of a limited contract, the amount of gratuity shall be calculated as follows:

  • If the period of service is less than one year, no gratuity is payable
  • For an employee whose period of service is 1 to 5 years, he is entitled to 21 calendar days’ basic salary for each year of the first five years of work.
  • If an employee has served more than 5 years, he is entitled to 30 calendar days basic salary for each additional year, provided the entire compensation does not exceed two years pay.

2. Under Unlimited Contract (contract with unlimited term)

The computation of gratuity, under an unlimited contract is different on termination by the employer and the employee.

On termination of the employment contract by the employer,

  • If the period of service is less than one year, no gratuity is payable
  • If the period of service is 1 to 5 years, the employee is entitled to 21 calendar days’ basic salary for each year of the first five years of work.
  • If an employee has served more than 5 years, he is entitled to 30 calendar days basic salary for each additional year, provided the entire compensation does not exceed two years pay.

On resignation of an employee under an unlimited contract,

  • If the period of service is less than one year, no gratuity is payable
  • If the period of service is between 1 and 3 years, the employee is entitled to one third (1/3) of 21 days basic salary as gratuity pay.
  • If the employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days basic salary as gratuity pay.
  • If an employee has served more than 5 years, he is entitled to full 21 days basic salary as gratuity pay.

 

Persons Ineligible for Gratuity

As per Article 139 of the UAE Labour Law, the employees are not eligible for gratuity from their employers under the following circumstances:

1. On dismissal by the employer by invoking any reasons mentioned under Article 120 of the UAE Labour Law which allows summary dismissal of an employee on eleven exhaustive grounds mainly considered as instances of gross misconduct on part of the employee. An employee who resigned from his employment in order to avoid such dismissal also is not eligible for gratuity.

2. On resignation from the employment without notice except for the reasons mentioned under Article 121 of the UAE Labour Law as per which the employee can abandon his work without notice if the employer fails to honour his obligations towards him or if he is assaulted by the employer or the employer’s legal representatives, and such with regards to unlimited contracts, or prior to the completion of five years of continuous service with regard to limited contracts.

The UAE Labour Law provisions are more advantageous to the employee and its prime objective is to ensure the welfare of the employees. As per Article 141, if the establishment has a retirement system, an insurance or any similar scheme, the employee has an option to chose between the more beneficial retirement scheme or severance pay.

For any queries or services regarding Labour matters, you can contact us at +971 4 3298711 or send us an e-mail on consultants@uaeahead.com . Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Divorce in UAE under the Federal Personal Status Law

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

Ending a marriage is never going to be easy. There is no doubt about that, divorce will take its toll on you emotionally and financially. In this article, we will guide you to better understand the legal process which is followed in family disputes.

The first stage of the legal process for divorce is the Family Guidance Committee. The purpose of the Family Guidance Committee is to try and reconcile between the parties before separating them under Article 98 of the Personal Status Law of the UAE.

In family matters, the local Courts cannot be approached directly. As a prerequisite, the case has to start with the Family Guidance Committee prior to approaching the courts. This is considered as an important step as they try to resolve any matters amicably between the husband and the wife due to the importance of family in the social context.

  1. While approaching the Family Guidance Committee, the claimant needs to take the following documents with him/her:
  • Emirates ID
  • Original Marriage Certificate/ Contract

If the marriage has been contracted outside the UAE, then the documents should be legalized by the Ministry of Foreign Affairs and UAE Embassy of the issuing country. The same document then must be attested by the Ministry of Foreign Affairs in the UAE, translated into Arabic and stamped by the Ministry of Justice.

  1. Once the claimant has filed the above documents, the Family Guidance Committee gives a date for the hearing to the other party. At this stage of the process, the husband and the wife are required to appear in person before the Committee and cannot be represented by family members or lawyers.
  2. However, it should be noted that the Family Guidance Committee is not authorized to issue any judgment without the consent of both parties and force the other party to accept any solution. At this stage, the parties are well within their rights to refuse any settlement offered by the committee.
  3. Care should also be taken regarding the moral and cultural codes of the UAE, while approaching the family guidance committee or any court in the UAE. Both men and women should dress appropriately and in keeping with the cultural norms of the UAE. The Family Guidance Committee and the Courts have complete discretion to disallow inappropriately dressed person(s) from entering the court.
  4. If both parties attend and no amicable solution is reached, the Family Guidance Committee shall issue a No Objection Letter or Transfer Letter to the claimant. This NOC allows the claimant to file the case in Court and start the legal process of divorce.
  5. If the Parties reach an amicable solution and are willing to sign a settlement agreement to that effect, it is strongly advised that they seek the assistance of a lawyer at that point. The settlement agreement in this case is signed before the judge from the Family Guidance Department and kept in their file for all future references and two copies are given to the Parties. Both parties must abide by the terms of this settlement agreement, so any terms agreed between the parties should be reviewed by competent lawyer to ensure that, such terms are in their favor and not detrimental to their interest.

 Knowledge of Law

In the UAE, divorce decree may be obtained under Sharia Law for Muslim expats and non-Muslims may apply provisions of Article 1(2) of the Federal Law No. 28 of 2005 concerning personal status (the ‘Personal Status Law’), which allows them to apply their own personal laws.

This is in accordance with Article 1(2) of the UAE Personal Status Law which states: “The provisions of this law shall apply to the citizens of the United Arab Emirates unless non-Muslims among them have special provisions applicable to their community or confession. They shall equally apply to non-citizens unless one of them asks for the application of his law.”

It ought to be noted however that Article 13 of the UAE Civil Transactions law provides that the law of Nationality of the husband at the time the marriage was contracted shall apply to the effects of such marriage on personal status and property, while divorce shall be governed by the laws of nationality of the husband at the time the proceedings are initiated for divorce.

The Party seeking application of his law of nationality shall provide the Court with a notarized, legalized version of such law translated to Arabic by a sworn translator as approved by the UAE Ministry of Justice.

 

For any queries or services regarding Divorce or Family Law matters, you can contact us at +971 4 3298711 or send us an email on consultants@uaeahead.com. Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Arbitrary Dismissal of Workers under UAE Labour Law

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

The UAE labour laws are very much lenient to the workers. When an employer dismisses an employee without a notice or warning letter or forces him to resign from the job without any reasonable grounds, such dismissal would amount to an arbitrary dismissal. Article 122 of the UAE Labour Law defines that when a worker is dismissed by his employer for a reason irrelevant to the work, it is ‘arbitrary termination’.

According to Article 123 of the UAE Labour Law, if arbitrary dismissal is proven, the Court can order the employer to pay an additional compensation to the employee.

As per the UAE Labour Law, there can be two types of employment contracts between the employer and the employees. They are (i) Limited Term Contracts and (ii) Unlimited Term Contracts.

In case of a limited contract, there is no notice provision under the UAE Labour law for the termination of limited term contract. Such contracts simply expire at the end of the term or on the date specified in the contract (unless terminated earlier by either party).

In case of an unlimited contract, it can be terminated by either the employer or employee at any time subject to serving a notice to the other party for a period of at least 30 days, unless the Employment Contract provides for a longer notice period.

It is an obligation of the employer under Article 46 of the UAE Labour Law to give a trainee enough time to acquire theoretical knowledge. He should also give the trainee a sufficient time to learn the principles of the occupation and the skills for which he is recruited.

Further, the Labour Law allows summary dismissal of an employee by the employer on eleven exhaustive grounds under Articles 88 and 120 of the UAE Labour Law.

The grounds on which an employee can be dismissed without a notice are:

  1. Use of false identity or nationality and submission of forged certificates or documents.
  2. If an employee is engaged on probation and is dismissed during or at the end of the probationary period.
  • On committing a fault due to which a substantial loss was caused to the employer. In such cases, the employer should have notified such an incident to the labour department within 48 hours of becoming aware of its occurrence.
  1. On disobeying instructions on the safety of work or workplace. This is subject to a condition that such instructions are in writing and posted at a conspicuous place and are communicated verbally to an illiterate worker.
  2. On breach of his basis duties under the employment contract and fails to redress such default despite a written interrogation and a warning that he will be dismissed if such default is repeated.
  3. On revealing any confidential information of the firm for which he works.
  • On conviction by a competent court of a crime against honour, honesty or public morals.
  • If he was found in a drunken state or under the influence of a narcotic drug during working hours.
  1. If he assaults the employer, the manager in charge or any of his workmates during working hours.
  2. If he is absent from work without a valid reason for more than 20 non-successive days in one single year, or for more than seven successive days.

Alternately an employee may validly resign prior to the expiry of the contract under the provisions of Article 121 of the law as per which, he can abandon his work without notice in the contract or in this Law (a) if the employer fails to honour his obligations towards the worker or (b) if he is assaulted by the employer or the employer’s legal representatives.

The concept of Arbitrary dismissal under the UAE law is very much similar to the concept of unfair dismissal under the UK Law where natural justice principle is strictly followed. After an employee is terminated from the employment, he may pursue claim for arbitrary dismissal by the employer. Therefore, it is compulsory for the employer to strictly follow the statutory norms in case of termination of an employee.

The established jurisprudence and practice in the UAE is that the Courts will not deem a termination as ‘arbitrary’, if it is found that either (i) the employee is guilty of one of the specified (and exhaustive) gross misconduct type reasons listed in Articles 88 and 120 of the UAE Labour Law, or (ii) the employee is a poor performer (and there is documentary evidence supporting the poor performance or misconduct).

 

Compensation for Arbitrary Dismissal

According to the UAE Labour Law, the maximum additional compensation that can be awarded for an ‘arbitrary dismissal’ of an employee is three months’ remuneration, calculated based on the last pay received by the employee prior to dismissal. 

For determining the amount of compensation, the Court will consider the type of work, the extent of damage incurred to the employee and the total period of the employment. The amount, however, should not exceed three months wages.

In addition to the aforementioned compensation, the employee can claim his gratuity, notice period dues, payment in lieu of untaken leave or any other unpaid dues and post-termination entitlements he is entitled to from his employer under UAE Labour Law.

For the purpose of computation, the term ‘remuneration’ refers to an employees’ full pay (basic salary plus any monthly allowances).  In addition, where the employee receives regular or guaranteed bonus or commission payments, these may also be considered by the Court while determining the employee’s remuneration.  The actual amount of the award, if any, is ultimately determined by the Court.

For any queries or services regarding labour law, you can contact us at 043298711 or send us an email on consultants@uaeahead.com. Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Online Defamation – Punishment under UAE Law

Court Representation by Top Dubai Lawyers Experts on Dubai Law and the UAE Legal System

A human being is entitled to have reputation and dignity without which he cannot live a peaceful life. This is the reason why the law treats defamation as a serious crime as it harms a person’s reputation.

Reputation is the state of being held in high esteem and honor or the general estimation that the public has for a person. According to Jurist Blackstones, “Every man is entitled to have his reputation preserved inviolate”.

“The typical form of defamation is an attack upon the moral character of the plaintiff attributing to him any form of disgraceful conduct,” Salmond said.

With the advent and rapid growth of the information technology in every fields including the communication platform, there is an increase in the number of high profile defamation cases. These are mainly because of the wide use of social networking sites and online portals among the common people.

The UAE Penal Code recognizes defamation as a criminal offence. Under Cyber law, the crime is considered to be more serious and the punishment too, is severe.

Under the UAE law, any commentary posted through the digital media may lead to criminal charges for defamation. Apart from criminal proceedings, there are civil remedies available for the aggrieved person through which he can claim for compensation from the offender for the loss of his reputation.

Generally, there are two kinds of defamation, i.e. libel and slander. Defamation in some permanent forms such as written or printed is called as libel. Slander is defamation in transient forms like spoken words or gestures.

As per Article (20) of the UAE Federal Law No. (5) of 2012, slander is a crime for which the offender can be punished by imprisonment or a fine up to AED 500,000 or either of these two penalties.

In order to attract the provisions of Article (20), the offender should have insulted or accused another person of a matter of which he shall be subject to punishment or being held in contempt by others, by using a computer network or an information technology means.

If a slander or insult is committed against a public official or servant in the course of or because of his work, this shall be considered an aggravating factor of the crime.

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts