The Strategic Guide to Commercial Disputes in the UAE
Start with the question most people ask last: if you win, what do you collect?
A working guide to commercial disputes in the UAE, arranged around enforcement: which law governs the contract, what onshore courts and the DIFC and ADGM courts each do differently, how to keep an arbitration clause current, and where the evidence comes from.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
The most useful question at the start of a commercial dispute in the UAE is the one usually asked last: if you win, what do you actually collect, and from where? A judgment or an award is a piece of paper until it meets an asset in a place where it can be enforced. Working backwards from that point tends to produce better decisions about forum, about strategy and about whether to fight at all.
What follows is arranged in that order — the law that governs the bargain, the forum that will apply it, the evidence that decides it, and the enforcement that makes it worth having.
Related: Our corporate and commercial team advises on the contracts before the argument and the claims after it.
The law that governs the bargain
Commercial dealings on the UAE mainland sit under the Commercial Transactions Law, Federal Decree-Law No. 50 of 2022, which replaced Federal Law No. 18 of 1993, alongside the Civil Code and sector-specific legislation. The approach is civil law: the written contract and the codified rules do the work, and there is no system of binding precedent in the sense a common lawyer would recognise.
The DIFC and the ADGM are different jurisdictions rather than different courtrooms. Each has its own body of commercial legislation built on common-law principles, its own courts and its own regulators. A contract between two entities established in one of them is likely to be governed by that jurisdiction's law and heard by its courts, and the reasoning will look familiar to anyone used to English commercial practice.
Parties can generally choose a governing law, and many do without much thought. Choosing a foreign law that nobody involved will need to prove in evidence is one thing; choosing it for a contract to be performed and enforced entirely onshore is another, because the law then has to be established before the court that applies it. Make the choice deliberately.
The forum, and what the choice costs
Onshore, proceedings before the local courts of the emirate are documentary. The judge, not the parties, controls the expert evidence, and in technical disputes — construction, accounting, technical valuation — a court-appointed expert's report frequently shapes the outcome more than the pleadings do. There is limited scope for obtaining documents from the other side, which puts a premium on what you already hold.
Before the DIFC and ADGM courts the procedure follows common-law lines: pleadings, disclosure of documents, witness statements, cross-examination, and reasoned judgments in English. That is a genuine advantage where the facts are contested and the documents are in the other party's hands. It is also a longer and more document-heavy process, which is not always what a straightforward debt claim needs.
Some categories of commercial dispute are directed to a specialised body rather than the ordinary courts. Check whether the subject matter has a dedicated forum before assuming the contract's chosen court will hear it.
Related: Our commercial disputes practice handles claims onshore, in the DIFC and ADGM courts, and in arbitration.
Arbitration: the clause is most of the case
Arbitration seated in the UAE is governed by Federal Law No. 6 of 2018, as amended in 2023. Where the parties are from different countries, or where confidentiality matters, it is often the right answer — and awards travel, because the UAE is a party to the New York Convention on the recognition and enforcement of foreign arbitral awards.
The clause has to be current, and a great many are not. The DIFC-LCIA was abolished by Dubai Decree No. 34 of 2021 and its caseload passed to the Dubai International Arbitration Centre. In Abu Dhabi, ADCCAC was restructured as arbitrateAD, which has operated under that name since 2024. Contracts still naming the old institutions are signed regularly, and while a defunct name is not necessarily fatal, it is an argument the other side will run before anyone reaches the merits.
Three drafting points beyond the institution's name:
- Seat is not venue. The seat fixes which court supervises the arbitration and which procedural law applies. The venue is only where hearings happen. The DIFC remains available as a seat, with the DIFC Courts supervising, whatever institution administers the case.
- Match the tribunal to the money. Three arbitrators on a modest claim is a decision to spend a large share of the value on the process. Say what the tribunal looks like, and consider an expedited procedure for smaller claims.
- Say who can be joined. In a project with a main contract and several subcontracts, separate arbitrations produce inconsistent findings on the same facts. If consolidation or joinder matters, it belongs in the clauses when they are written, not when the dispute arrives.
Our arbitration team drafts and repairs these clauses as well as running the references.
Cases are won with documents created during performance
By the time a dispute is live, the evidence exists or it does not. The recurring failures are the same across sectors.
Variations agreed in a meeting and never confirmed in writing. Notices sent by email when the contract required a different method and a different address, or sent to an individual who had left the company. Invoices issued on terms nobody approved. A course of dealing that has drifted a long way from the signed document, so that the party relying on the contract is the one behaving inconsistently.
Two habits prevent most of it: confirm in writing anything agreed orally, in the form the contract requires; and when performance starts departing from the written terms, either document the change or stop and address it. Contracts that are written to be operated — with notice provisions someone can actually follow, defined deadlines and a clear record of who may agree what — make all of this easier. Our contract drafting team works on that side of it.
Enforcement, which is where you started
A favourable outcome is worth what can be recovered under it. Foreign judgments and awards are recognised in the UAE through the treaty framework and the applicable procedural rules, but recognition is a step, not an event, and it has to be planned for.
The practical work is identifying, early, what the counterparty owns and where: bank accounts, receivables from customers, real estate, shares in group companies, and whether those sit onshore, in a free zone, or abroad. Where there is a real risk of assets moving, interim measures — attachment, freezing relief, security for a claim — are available in the relevant forum, and applications of that kind are far more effective before a counterparty has had time to react than after.
Where a counterparty is heading towards insolvency, the calculation changes again. A judgment obtained against a company entering a formal restructuring may deliver a place in a queue rather than payment, which is a reason to take a commercial view of a settlement offer while there is still something to settle with.
Before it becomes a dispute
Most commercial disagreements here are resolved by negotiation, and the ones that settle well tend to settle early, while both sides still want the relationship to continue. Two things help. First, know your position properly before opening negotiations — a party that has read its own contract carefully negotiates from a different footing than one working from memory. Second, write every letter on the assumption that a judge or a tribunal will read it: measured and specific, with any contractual deadlines checked before it goes out rather than afterwards.
Mediation is available and increasingly used, including through frameworks attached to the courts. It suits disputes where the commercial relationship has value and the legal question is narrow, and it suits them best before positions have hardened into pleadings.
Related Services: Explore our Commercial Disputes services for practical legal support in this area.
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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