Resolving Commercial Disputes Disputes Effectively
The forum for a commercial dispute is settled when the contract is signed, and the damage comes from discovering what that choice meant only after the relationship has broken down.
By the time a claim is filed the forum has usually been chosen already — at signature. Compares onshore litigation, in Arabic with a court-appointed expert and a route running to cassation, with the English-language DIFC and ADGM opt-in, and with arbitration after Dubai Decree No. 34 of 2021 moved the DIFC-LCIA caseload to DIAC. Ends on what a clause must settle once a claim is live.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
Most commercial disputes in the UAE are half-decided before anyone files anything, because the forum was chosen when the contract was signed. A supply agreement that says nothing about jurisdiction will end up in the local courts of the emirate where the defendant is based, in Arabic, before a judge who will probably appoint an expert. The same agreement with a well-drafted arbitration clause ends up somewhere else entirely, with a different evidentiary culture and a different enforcement route. Neither outcome is inherently better. What causes damage is discovering the difference after the relationship has broken down.
This piece sets out the forums actually available for a commercial dispute in the UAE, what each one is good at, and the drafting decisions that determine which one you get. Our corporate and commercial team advises on these questions at the contract stage and after a claim has arisen.
The onshore courts
The local courts of each emirate — Dubai Courts, the Abu Dhabi Judicial Department, and their counterparts elsewhere — hear the great majority of commercial claims in the country. They apply federal law, including the Commercial Transactions Law, Federal Decree-Law No. 50 of 2022, which replaced Federal Law No. 18 of 1993, together with the Civil Code and the Commercial Companies Law, Federal Decree-Law No. 32 of 2021.
Three features of onshore litigation shape how a case should be prepared. Proceedings are conducted in Arabic, so every contract, invoice, email and expert report relied on has to be translated by a legally recognised translator; a document that reads persuasively in English can lose its force in translation, and it is worth reviewing the translation rather than leaving it to the process. Second, the court will commonly refer technical and accounting questions to a court-appointed expert, whose report tends to carry considerable weight with the judge — the real contest in a construction or accounts claim is often before that expert rather than in the courtroom. Third, a case runs through a first instance court, an appeal court and a court of cassation, and the losing party will usually take each step, so a claimant should plan the whole route rather than the first judgment.
Precautionary attachment over a debtor's bank accounts or assets, applied for at or before the start of proceedings, is one of the more effective tools available onshore and is frequently the reason a case settles. It has to be prepared with the same care as the claim itself.
DIFC and ADGM
The Dubai International Financial Centre and Abu Dhabi Global Market are common-law jurisdictions with their own courts, operating in English. They hear disputes connected to their own zones, and they will also hear a dispute between parties with no other link to the centre where those parties have agreed in writing to their jurisdiction. That written opt-in is a real option for parties who want English-language proceedings, documentary disclosure and a published judgment.
Two points are often missed. An opt-in has to be drafted as an exclusive jurisdiction clause with real care, because a clause that gestures at both the DIFC Courts and the courts of Dubai invites a fight about jurisdiction before anyone reaches the merits. And a judgment obtained in one of these courts still has to be enforced where the assets sit, which is a separate step with its own procedure. If the counterparty's only assets are onshore, factor that step in when choosing the forum.
Arbitration after the 2021 restructuring
Arbitration in the UAE is governed by Federal Law No. 6 of 2018, amended in 2023. The institutional map changed significantly when Dubai Decree No. 34 of 2021 abolished the DIFC-LCIA Arbitration Centre and moved its caseload to the Dubai International Arbitration Centre. In Abu Dhabi, ADCCAC was restructured as arbitrateAD from 2024.
The practical consequence is that older contracts still contain clauses naming institutions that no longer exist. If your standard terms were drafted before that change, they should be reviewed now, not when a dispute arises. A clause naming a defunct centre is not automatically fatal, but it hands the other side an argument you do not need.
Note also the distinction between the seat and the institution. Choosing the DIFC as the seat of an arbitration remains available and puts the supervisory court in the DIFC, whichever institution administers the case. Seat, institution, governing law and language are four separate choices, and a clause that leaves any of them unstated is the clause that generates a preliminary skirmish. Our arbitration practice both drafts these clauses and runs the cases that follow from them.
What the contract should settle
The dispute resolution clause is the cheapest part of a commercial agreement to get right and the most expensive to get wrong. At a minimum it should identify the governing law, the forum, and — where arbitration is chosen — the seat, the institution, the number of arbitrators and the language. Where the parties want a negotiation or mediation step first, the clause must say who triggers it, how long it lasts and what happens if it fails, otherwise it becomes a jurisdictional argument rather than a filter.
Beyond the clause itself, the contract should be clear about what a breach looks like: acceptance and inspection mechanics, the form and address for notices, entitlement to interest, and what termination requires. Claims are frequently lost not because the underlying right was weak but because notice was given informally to someone without authority to receive it. The same discipline applies to leases and other standard-form documents, which is why we treat contract drafting as part of dispute prevention rather than a separate exercise.
When a dispute has already started
Once a claim is live, the first questions are about the clause rather than the merits. Read the dispute resolution provision as it was actually drafted, confirm that the institution it names still exists, and check that nothing agreed later — a variation, a renewal on different terms, a purchase order carrying its own conditions — has quietly displaced it. Where the clause makes something a precondition to proceedings, such as a negotiation period or a notice in a particular form, establish whether that step was taken, because an opponent will raise the omission before anyone reaches the substance. Then look at the material you intend to rely on in the light of the forum you are heading for: onshore it has to survive translation, in the DIFC or ADGM it will be disclosed to the other side, and in arbitration it will be read by a tribunal that may know the industry better than a judge does. Get an early, honest view of the recoverable amount as against the cost of recovering it — a claim that is legally sound but economically pointless should be settled rather than fought.
Settlement remains the outcome in most commercial disputes, and the terms available usually depend on how credible the alternative looks. A party that has secured an attachment, has its documents in order and has a clause pointing to a forum it is comfortable in negotiates from a very different position than one that does not.
Related Services: Explore our commercial dispute resolution and contract disputes services for practical legal support in this area.
If you are reviewing a portfolio of contracts, start with the ones that carry the largest exposure and check three things: the jurisdiction clause, the notice provisions, and whether the named arbitral institution still exists. Most of the value in contract dispute work is captured at that stage. We can also review a live matter and advise whether the forum you are in is the one you should be in, which is a question worth asking early in any commercial contract dispute.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.
Nour Attorneys Team
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