The Strategic Guide to Commercial Litigation in the UAE
Including which arbitration clauses in your existing contracts now need amending.
How commercial disputes in the UAE are shaped by the contract: choosing between the onshore, DIFC and ADGM courts, arbitration clauses that still name the abolished DIFC-LCIA, the documents that decide cases, and where a judgment can actually be enforced.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
Most commercial disputes in the UAE are shaped by a clause somebody drafted years before the argument started. Where the case is heard, under which law, in front of which kind of judge, and how a win is converted into money are all settled at signature by a paragraph that nobody in the negotiation wanted to spend time on. Everything a litigator can do afterwards is done within the boundaries that paragraph set.
Related: We act for foreign investors in commercial litigation across the UAE’s onshore and free zone courts.
Three court systems, and the one your contract chose
A commercial claim in the UAE will normally sit in one of three places. The onshore courts — federal or, in Dubai and a few other emirates, local — apply UAE civil law and hear the great majority of disputes involving mainland companies. The DIFC Courts and the ADGM Courts are separate common law jurisdictions with their own judges and their own procedural rules, serving entities established in those centres and parties who have agreed to go there.
The difference is not cosmetic. Disclosure, the treatment of witness evidence, the role of court-appointed experts and the way a case is managed all vary between the systems, and a strategy built for one can misfire in another. Before a claim is issued, the practical questions are simply: which forum does the contract point to, does that forum genuinely have jurisdiction over this defendant, and where are the assets that would satisfy a judgment?
Substantive law is a separate question from forum. Commercial obligations onshore are governed by Federal Decree-Law No. 50 of 2022 on Commercial Transactions, which replaced Federal Law No. 18 of 1993, alongside the Civil Code and, for corporate matters, the Commercial Companies Law, Federal Decree-Law No. 32 of 2021. Contracts drafted from templates still referring to the superseded legislation are common, and while an outdated citation rarely decides a case on its own, it is a reliable sign that nobody has looked at the document in a long time.
Related: Our team advises expatriate business owners and private clients on contentious commercial matters.
Check what your arbitration clause now refers to
Arbitration remains the default choice in cross-border UAE contracts, and it is governed by Federal Law No. 6 of 2018, amended in 2023. But the institutional map changed under it, and a great many contracts have not caught up.
Dubai Decree No. 34 of 2021 abolished the DIFC-LCIA Arbitration Centre and moved its caseload to the Dubai International Arbitration Centre. Clauses still naming the DIFC-LCIA are sitting in force in agreements signed both before and, carelessly, after that change. They are not automatically fatal, but they invite a preliminary argument about what the parties agreed to, which is precisely the argument an arbitration clause exists to prevent. In Abu Dhabi, the former ADCCAC was restructured as arbitrateAD from 2024, and clauses naming the old body raise the same question.
Two points follow. First, review the dispute resolution clauses in your live contracts against the institutions that currently exist, and amend the ones that do not match. Second, keep the seat and the institution distinct in your drafting: the DIFC remains available as a seat, with the supervisory role that carries, whichever institution administers the reference.
Related: See our commercial litigation and arbitration practice for contract review and dispute strategy.
The case is built from documents, not recollection
The single most consistent difference between claimants who succeed and claimants who do not is the quality of the written record. Not the eloquence of the pleadings: the invoices, the signed delivery notes, the acknowledgment of debt, the correspondence in which the other side accepted a position it now denies.
That has consequences during the commercial relationship, not just after it fails. Confirm oral variations in writing. Keep the counterparty’s stamped and signed copies, not only your own. When performance starts slipping, record the complaint at the time rather than reconstructing it later. Reserve rights in writing before accepting a part payment. Each of these takes minutes while the relationship is still functioning and cannot be replaced once it is not.
Consider also what interim protection may be needed. Where there is a real prospect that assets will be moved before a judgment can be obtained, the application to preserve them is one of the few steps whose value falls away rapidly with hesitation.
A judgment is only as useful as the route to the assets
Deciding where to sue means asking where the defendant’s money is. A judgment from a free zone court against a defendant whose only assets sit onshore has to travel to reach them, and a foreign arbitral award has its own recognition route, with the New York Convention behind it. Each additional step is another opportunity for the defendant to raise a point.
Where the counterparty is a group, identify at the outset which entity actually holds anything worth pursuing, and whether the entity you contracted with is that one. Parent guarantees, security and clear identification of the contracting party in the agreement itself are worth more at enforcement than any amount of skill in the courtroom.
Related: We handle commercial litigation in Abu Dhabi and Sharjah as well as Dubai.
Whether to litigate at all
Litigation is a commercial decision before it is a legal one. Weigh the realistic recovery against irrecoverable costs, the attention it will take from the people running the business, the disclosure the other side will be entitled to seek, and whether the relationship is worth more than the claim. Some disputes should be settled early on terms that feel unsatisfying, and knowing which ones is most of the judgment a litigator brings.
What should not happen is drift: a claim left unpursued while evidence disperses and witnesses leave, or a defence conducted by silence. Take the decision to fight or to settle deliberately, and take it with the contract, the documents and the enforcement route in front of you.
Related Services: Explore our work on contract compliance and dispute avoidance and our commercial litigation services in the UAE.
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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