UAE’s dispute laws are catching up with technology

NM-Law-Blog-UAE's dispute laws are catching up with technology

In recent months, with the slowdown in real estate activity, there – predictably – has been a flurry of queries as clients become more litigious in trying to protect their rights. This happens every single time there is a slowdown in economic activity.

Friends of mine have commented that this is an global pattern that has been documented in journals such as the Harvard Business Review! In particular, brokers as well as other industry middlemen often approach me, talking about their rights in instances where there are little more than emails to indicate the nature of the transaction.

As first principles stand, it is imperative to look at what the law states.

Article 17 of the UAE Law of Evidence (No. 10 of 1992 amended by Federal Law No. 36 of 2006) stipulates the following as Clause 4:

Electronic writings, correspondence, registers and documents have the same probative force given by this Law to formal and informal writings and correspondence, whenever it satisfies the conditions and provisions set out in the Law on Electronic Transactions and Commerce.

Article 2 of the Federal Law on Electronic Transactions and Commerce (No. 1 of 2006) says:

Matters for which no specific provision is laid down in the Law shall be governed by the international commercial laws affecting electronic transactions and commerce and the general principles of civil and commercial practice.

This law applies to electronic records, documents and signatures that relate to electronic transactions and commerce but does not apply to

Transactions and issues relating to personal law such as marriage, divorce and wills;

    • Deeds of title to immovable property;
    • Negotiable instruments;
    • Transactions involving the sale, purchase, lease (for a term of more than 10 years) and other disposition of immovable property and the registration of other rights relating to immovable property;
    • Any document legally required to be attested before a notary public; and
  • Any other documents or transactions exempted by special provision of law.

From Article 2(2)(d), it is clear that electronic documents have limited probative value in certain transactions relating to the sale and purchase of real estate. Nonetheless, it has been a clear practice of Dubai Courts to increasingly rely on electronic communication as means of evidence, at times even when the middlemen bringing forth the evidence have themselves not been duly certified by the relevant authorities.

Clear means of proof

In other words, the practice of the courts has been to look at electronic communication as a clear means of proof. It has repeatedly gone out of its way to protect the intent of the transaction documented in the emails, even in cases where developers have pointed out the limitations of the articles of the law and its probative value.

This brings into sharp focus how the city has continued to develop as a centre for regional and international commerce. In point of fact, the city continues to pioneer new forms of technology such as blockchain, and firms continue to flock to the city.

They do so in large part because of the increasing transparency that the law now provides, which by its very definition, creates comfort for the entrepreneur who is always seeking to exploit new ways of conducting business.

In today’s world, it is not of any surprise that laws continue to lag behind the rapid changes in technology and commerce. However, in the ultimate analysis, the success of any regulatory regime is not only the minimization of incidences of malafide abuse of the law, but the rapid adoption of technology that enables maximum creation of new business activity.

If this yardstick is to be the benchmark, then it would come as little surprise to see Dubai, and the UAE, right up there among First World jurisdictions, as the amount of confidence and foreign investment flows surge, regardless of the stage of the business cycle.

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