Amicable Dispute Settlement in Dubai: Practical Steps for Parties

How to settle disputes amicably in Dubai?
Amicable settlement in Dubai is a voluntary, confidential process governed by Federal Decree-Law No. 40 of 2023 on Mediation and Conciliation in Civil and Commercial Disputes and Dubai Law No. 18 of 2021 establishing the Centre for Amicable Settlement of Disputes. It allows parties to resolve commercial disagreements through mediation before resorting to court or arbitration.

What is amicable settlement and when is it appropriate?

Amicable settlement is a structured, party-driven negotiation facilitated by a neutral mediator who helps the sides identify interests, explore options, and reach a mutually acceptable agreement without imposing a decision. It is particularly suitable when the parties wish to preserve an ongoing business relationship, avoid the publicity and procedural rigidity of litigation, or achieve a faster, more cost-effective resolution. The process can be launched at any point-before a claim is filed, during court proceedings, or even after an arbitration has commenced-as long as both parties consent to mediation. Under Federal Decree-Law 40/2023, mediation is encouraged for civil and commercial matters, and the law safeguards the confidentiality of all discussions, ensuring that statements made during mediation cannot be used in subsequent litigation unless the parties expressly agree.

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HOW DOES ONE START THE AMICABLE SETTLEMENT PROCESS IN DUBAI?

The initiation of amicable settlement begins with a written request for mediation submitted either to the chosen mediation centre or directly to the opposing party. The request should contain:

• a concise statement of the facts giving rise to the dispute;
• the specific relief or outcome sought;
• a proposal for a mediator (including name, qualifications, and any preferred mediation centre);
• copies of key documents such as the underlying contract, amendments, invoices, payment records, and relevant correspondence.

To settle disputes amicably in Dubai, parties may resort to the Amicable Settlement Centre at the Dubai Courts or to a mediator accredited by the Dubai International Arbitration Centre (DIAC), in accordance with the Arbitration and Amicable Settlement Law No. (6) of 2018 and its amendments, and the proceedings are subject to the jurisdiction of the Dubai Courts.

WHAT DOCUMENTS AND INFORMATION ARE REQUIRED FOR EFFECTIVE MEDIATION?

Effective mediation hinges on a clear, well-organized presentation of the dispute's factual and legal landscape. Essential documentation includes:

• the principal contract or agreement, together with any amendments or side letters;
• invoices, payment receipts, bank statements, and records of performance or non-performance;
• all correspondence (emails, letters, notices) that pertains to the alleged breach or disagreement;
• expert reports, valuation statements, technical assessments, or inspection reports when the dispute involves construction defects, quality of goods, or service performance;
• any internal policies, guidelines, or regulatory approvals that may affect the parties' ability to perform or settle.

Preparing a concise position paper that outlines each party's view of the facts, the legal basis for their claims, and any constraints (such as financing limits or third-party consents) helps the mediator focus the discussion. The confidentiality protections embedded in Federal Decree-Law 40/2023 ensure that information shared during mediation cannot be disclosed or used in later court or arbitration proceedings without the parties' explicit consent.

WHAT ARE THE TYPICAL TIMELINES AND COSTS ASSOCIATED WITH AMICABLE SETTLEMENT?

The duration of amicable settlement varies with the dispute's complexity and the parties' willingness to negotiate. A straightforward commercial claim-such as an unpaid invoice-may be resolved in a single session lasting a few hours, whereas multifaceted disputes involving multiple contracts, cross-border elements, or technical expert evidence often require several sessions spread over weeks. The Dubai Courts' Centre for Amicable Settlement aims to conclude mediation within 30 days of the request, although the parties may mutually agree to extend this period.

Costs consist of two main components:

1. Administrative fees charged by the mediation centre. The Centre's fee schedule is tiered: modest fixed amounts for low-value claims (often a few hundred dirhams) and a percentage-based fee for higher-value disputes.
2. Mediator's professional fees, which depend on the mediator's experience, seniority, and the chosen institution (DIAC mediators typically charge hourly rates that reflect their qualifications).

Compared with court litigation, amicable settlement generally incurs lower overall expenses, avoids prolonged court fees, reduces the need for extensive expert witness testimony, and eliminates the costs associated with potential appeals. Moreover, the process preserves business relationships and maintains confidentiality, which can be valuable in competitive markets.

HOW IS A SETTLEMENT AGREEMENT MADE ENFORCEABLE IN DUBAI?

Once the parties reach a consensus, the mediator drafts a settlement agreement that captures the agreed terms-monetary payments, performance obligations, timelines, confidentiality provisions, and any other conditions. Both parties sign the agreement, and it may be executed in both Arabic and English; the Arabic version prevails for official submission to governmental bodies when required.

To render the agreement enforceable, the parties submit it to the competent court for ratification. Under Federal Decree-Law 40/2023, a settlement agreement authenticated by the court carries the same legal effect as a court judgment and can be enforced through standard mechanisms such as asset attachment, garnishment of wages, or registration of a charge over property. If the subject matter falls within the jurisdiction of a specialised tribunal-such as the Rental Disputes Centre for tenancy issues-the agreement should be filed with that body for enforcement. In cases where the settlement pertains to a DIFC or ADGM matter, the agreement may be submitted to the respective courts for ratification and enforcement under their procedural rules.

FREQUENTLY ASKED QUESTIONS

What happens if one party refuses to participate in mediation?
Participation in mediation is wholly voluntary; a party cannot be compelled to attend. If a party declines, the other party may pursue litigation or arbitration as stipulated in the contract. However, courts may view an unjustified refusal to engage in a court-annexed mediation unfavourably when assessing costs or procedural conduct, potentially influencing cost awards.

Can mediation be used for disputes involving government entities?
Yes. Mediation is available for disputes where a government department or entity is a party, provided the entity consents. Many government agencies maintain internal mediation units or agree to utilise the Dubai Courts' Centre for Amicable Settlement. The same procedural rules apply, and any settlement must comply with applicable administrative regulations and procurement guidelines.

Is legal representation mandatory during mediation?
Legal representation is not mandatory, but parties often elect to be represented to safeguard their rights, ensure that the settlement agreement is clear and comprehensive, and facilitate the drafting of enforceable terms. The mediator remains neutral and does not provide legal advice to either side.

How does amicable settlement differ from conciliation under UAE law?
Mediation focuses on facilitating negotiation between the parties, with the mediator guiding communication and helping the sides generate their own solutions. Conciliation, by contrast, involves a more active role for the conciliator, who may propose specific settlement terms. Federal Decree-Law 40/2023 treats both processes similarly, but the parties' agreement determines whether the process is characterised as mediation or conciliation.

What if the settlement agreement is not honoured after ratification?
If a party fails to comply with a ratified settlement agreement, the aggrieved party may file an execution request with the court that ratified the agreement. The court can issue enforcement orders, including seizure of assets, garnishment of wages, or imposition of penalties, in accordance with the UAE Civil Procedure Law.

Are there any disputes that cannot be settled amicably?
Certain matters fall outside the scope of commercial mediation, including criminal offences, family law issues governed by personal status courts, and labour disputes that require mandatory Ministry of Human Resources and Emiratisation (MOHRE) procedures. Parties should verify the nature of their dispute before initiating mediation to ensure that the chosen process is appropriate and legally permissible.

If your matter involves how to settle disputes amicably in Dubai: practical steps for companies and individuals in the United Arab Emirates, you are welcome to request a consultation with Nour Attorneys. Our team can assess your position under the law currently in force and outline the options available to you. Request a consultation

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