Drafting a Non-Disclosure Agreement in the UAE: Key Clauses

To draft a non-disclosure agreement in the UAE, you must align it with the UAE Civil Code (Federal Decree-Law No. 5 of 2020), the Electronic Transactions Law (Federal Decree-Law No. 46 of 2021), and any applicable sector rules, ensuring clarity, reasonableness, and enforceability under UAE jurisdiction.

Related Services: Explore our Drafting Contracts & Agreements and Non-Compete Agreement services for practical legal support in this area.

WHAT ARE THE ESSENTIAL ELEMENTS THAT MAKE AN NDA ENFORCEABLE UNDER UAE LAW?

An enforceable NDA in the UAE must contain a precise definition of confidential information, clear obligations of the receiving party, permissible exclusions, a definite term, remedies for breach, and governing law and jurisdiction clauses that comply with the Civil Code and electronic-signature rules.

Definition of confidential information

The definition must specify the forms of information covered (written, oral, electronic, visual, samples) and whether the information needs to be marked as confidential. Under Article 123 of the Civil Code, information obtained during negotiations is protected if the parties agree to treat it as confidential【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】. A broad definition that includes all disclosed material, whether or not marked, strengthens protection, while the receiving party may require written confirmation of oral disclosures within a reasonable period to avoid ambiguity.

Obligations of the receiving party

The receiving party must undertake to (1) use the confidential information solely for the permitted purpose, (2) protect it with at least the same degree of care used for its own similar information, and (3) refrain from disclosing it to any third party without prior written consent. Article 122 of the Civil Code states that a party cannot exclude liability for fraud or the statutory pre-contract disclosure duty; therefore, the NDA must not attempt to waive these obligations【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

Exclusions from confidential information

Standard exclusions recognized by UAE courts are: (a) information already in the public domain through no fault of the receiving party, (b) information lawfully possessed before disclosure, (c) information independently developed without use of the discloser's material, and (d) information lawfully obtained from a third party free of restriction. The burden of proving an exclusion rests on the receiving party【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】. The NDA should expressly state these carve-outs to prevent disputes over what qualifies as confidential.

Term and survival of confidentiality obligations

UAE law does not impose a statutory maximum duration for confidentiality obligations; the parties may agree on any reasonable period. Common practice is to set a fixed term (e.g., three years) after the NDA ends, with an indefinite obligation for trade secrets that remain confidential. Article 340 of the Civil Code allows a court to review agreed liquidated damages for breach, but does not limit the duration of the confidentiality clause itself【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】. The agreement should clarify whether the term starts from the date of disclosure or from termination of the NDA.

Remedies for breach

The NDA should provide for (i) injunctive relief to prevent further disclosure, (ii) compensation for actual losses, and (iii) liquidated damages if the parties wish to pre-estimate harm. Under Article 340 of the Civil Code, a court may reduce excessive liquidated damages【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】. Including a clause that entitles the disclosing party to seek interim measures before the DIFC or Dubai Courts strengthens enforceability.

Governing law and jurisdiction

Parties may choose UAE federal law as applied in Dubai, or opt for the DIFC Courts, ADGM Courts, or arbitration under the UAE Arbitration Law (Federal Law No. 6 of 2018). Article 19 of the Civil Code respects the parties' choice of law, provided the selected law has a reasonable connection to the contract【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】. If arbitration is chosen, the arbitration clause must be signed by an authorized representative and specify the language, seat, and number of arbitrators.

Electronic signatures and counterparts

Federal Decree-Law No. 46 of 2021 validates electronic signatures for contracts, including NDAs, provided they meet the technical standards set out in the law【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-46-of-2021-on-electronic-transactions-and-trust-services】. The agreement should state that counterparts, each signed electronically, constitute a single instrument and that the prevailing language (English or Arabic) will govern interpretation, with a certified Arabic translation required for court proceedings if English is the prevailing language.

HOW SHOULD THE DEFINITION OF CONFIDENTIAL INFORMATION BE TAILORED TO THE DISCLOSING PARTY'S NEEDS?

The disclosing party should draft a definition that captures all forms of information likely to be shared, including oral presentations, electronic data, and physical samples, while avoiding overly broad language that could be deemed unreasonable.

First, list the specific categories of information protected (e.g., business plans, financial data, technical specifications, customer lists, software code). Second, state that the information is confidential whether or not it is marked as such, but require the receiving party to confirm oral disclosures in writing within five business days. Third, clarify that the fact of the negotiations themselves is confidential. This approach aligns with Article 123 of the Civil Code and reduces the risk that a court will find the definition overly vague【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

WHAT OBLIGATIONS SHOULD THE RECEIVING PARTY UNDERTAKE TO PROTECT THE INFORMATION?

The receiving party must adopt protective measures comparable to those it uses for its own confidential data, limit use to the stated purpose, and restrict access to employees or advisors who need to know.

The NDA should oblige the receiving party to (1) store the information in secure locations, (2) implement access controls such as password protection or encryption, (3) prohibit reverse engineering or decompilation of technical data, and (4) notify the disclosing party promptly of any unauthorized use or disclosure. These duties reflect the standard of care expected under Article 122 of the Civil Code, which prohibits waiving liability for fraud or statutory disclosure duties【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

WHICH EXCLUSIONS ARE MANDATORY IN A UAE NDA, AND HOW SHOULD THEY BE WORDED?

The four statutory exclusions must appear verbatim or in substance: public domain, prior lawful possession, independent development, and lawful receipt from a third party.

A typical clause reads: "Confidential Information does not include information that (a) is or becomes publicly available through no fault of the Receiving Party; (b) was lawfully possessed by the Receiving Party prior to disclosure; (c) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information; or (d) is lawfully obtained from a third party without restriction on disclosure." The Receiving Party bears the burden of proving any exclusion, a point reinforced by UAE court practice【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

HOW LONG SHOULD CONFIDENTIALITY OBLIGATIONS LAST, AND WHAT SURVIVES TERMINATION?

Parties may agree on any duration that is reasonable under the circumstances; there is no statutory cap.

A common structure is: (i) a fixed confidentiality period of three years after the NDA ends for general information, and (ii) an indefinite obligation for trade secrets and personal data that remain confidential. The agreement should state that the obligation to protect trade secrets continues for as long as the information qualifies as a trade secret under applicable law. This mirrors the approach in the firm's NDA playbook, which notes that trade secrets stay protected indefinitely【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

WHAT REMEDIES ARE AVAILABLE FOR BREACH OF AN NDA IN THE UAE?

The disclosing party may seek (a) interim injunctive relief to halt further disclosure, (b) compensation for proven losses, and (c) liquidated damages if stipulated.

Under Article 340 of the Civil Code, a court may reduce liquidated damages deemed punitive. The NDA should therefore set a reasonable pre-estimated amount, perhaps based on the value of the information or the cost of remedial measures. Additionally, the agreement should expressly allow the disclosing party to apply for urgent precautionary measures before the Dubai Courts or DIFC Courts, which is consistent with the Civil Code's provision for interim relief【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

HOW SHOULD GOVERNING LAW AND JURISDICTION BE SELECTED FOR AN NDA INVOLVING FOREIGN PARTIES?

Parties may elect UAE federal law as applied in Dubai, or choose a neutral forum such as the DIFC Courts, ADGM Courts, or arbitration.

If the counterparty is foreign and the dispute likely concerns injunctive relief, selecting the DIFC Courts (which apply a common-law framework) may be advantageous. The arbitration clause must comply with Federal Law No. 6 of 2018 on Arbitration, specifying the language, number of arbitrators, seat, and that the award is enforceable under the New York Convention. The NDA should state that the prevailing language for interpretation is English, with a certified Arabic translation required for any court proceeding【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

WHAT ROLE DO ELECTRONIC SIGNATURES AND COUNTERPARTS PLAY IN MODERN NDAS?

Federal Decree-Law No. 46 of 2021 confirms that electronic signatures have the same legal effect as handwritten signatures, provided they meet the technical standards outlined in the law.

The NDA should include a clause stating that the agreement may be executed in counterparts, each signed electronically, and that all counterparts together constitute a single instrument. It should also specify that the prevailing language governs interpretation, and that a certified Arabic translation will be furnished if needed for litigation. This aligns with the firm's NDA boilerplate, which validates electronic signatures and clarifies language precedence【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-46-of-2021-on-electronic-transactions-and-trust-services】.

FREQUENTLY ASKED QUESTIONS

What law governs the enforceability of an NDA in the UAE?
The primary statute is Federal Decree-Law No. 5 of 2020 on Civil Transactions (the Civil Code), which sets out rules on contractual obligations, confidentiality, and remedies. Electronic signatures are validated by Federal Decree-Law No. 46 of 2021 on Electronic Transactions and Trust Services【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-46-of-2021-on-electronic-transactions-and-trust-services】.

Can an NDA exclude liability for fraud or the statutory pre-contract disclosure duty?
No. Article 122 of the Civil Code expressly states that a party cannot exclude liability for fraud or the duty to disclose material information during negotiations. Any clause attempting to do so is void to that extent【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

How should the term of confidentiality be drafted to protect trade secrets?
The agreement may provide a fixed period (e.g., three years) for general confidential information, while stating that the obligation to protect trade secrets continues for as long as the information remains a trade secret under applicable law. This approach reflects the firm's NDA playbook, which notes that trade secrets stay protected indefinitely【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

Is it necessary to mark information as confidential for it to be protected?
Marking is helpful but not strictly required if the parties agree that all disclosed information is confidential regardless of markings. However, the receiving party may request written confirmation of oral disclosures within a reasonable period to avoid disputes. This practice aligns with Article 123 of the Civil Code concerning information obtained during negotiations【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

What jurisdiction should be chosen if the parties want enforcement in Dubai courts?
The NDA should specify that UAE federal law, as applied in Dubai, governs the agreement and that the Dubai Courts have exclusive jurisdiction. If the parties prefer a common-law forum, they may elect the DIFC Courts or ADGM Courts, provided the clause complies with the respective laws【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

Can liquidated damages be included in an NDA, and are they enforceable?
Yes, liquidated damages may be stipulated, but Article 340 of the Civil Code allows a court to reduce amounts deemed excessive. The clause should therefore reflect a genuine pre-estimate of potential loss, not a penalty【https://uaelegislation.gov.ae/en/legislation/federal-decree-law-no-5-of-2020-on-civil-transactions】.

This article provides general information about drafting NDAs under UAE law and does not constitute legal advice for any specific situation.

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