Arbitration is an alternate independent body to resolve a dispute as an alternative to the court system.

When drawing up a contract, you can specify that in the event of a dispute, arbitration will be the jurisdiction to resolve it. Although it is possible to select more than one arbitrator to hear a case, the default number of arbitrators will be set to unless specified to the contrary. If the parties in a dispute are not able to agree on who the arbitrator will be, the arbitration centre will select one independently. It is possible to appeal that decision if either party has a valid cause to do so. It is also possible to appeal against the selected arbitrator if they are, for example, not independent, impartial or correctly qualified. Any such challenge needs to be made within 5 days of discovering any problem or discrepancy.

Some of the ways to appoint an arbitrator are as follows

a- Through the court,
b- Through the Arbitration center
c- By specific request by name

It is mandatory to appoint the selected arbitrators in odd numbers 1, 3, 5, 7, 9. Under the Civil Procedure Code, Federal Law No. 11 of 1992, Article 206, ensure there can be no ‘stalemate’ in the matter. It goes without saying that any arbitrator appointed should be of sufficient capacity and good standing hence:

a- The arbitrators should not be a minor
b- He/she should not be guilty of a criminal offence
c- They should not be deprived of their legal capacity

A consumer, by definition, is anyone who purchases goods or services for personal use and Consumer Protection Law exists to manage or improve consumer confidence and the relationship between consumers and the business community.

To protect consumers in the UAE from any fraudulent activity and over-pricing, there is a federal law no. 24 of 2006 which clarifies the rights of a consumer.

The rights of a consumer are as follows,

a- The consumer has the right to demand a healthy and non-hazardous environment

b- He or she should be aware of their legal rights with easy access of information and through designated awareness programs

c- A consumer has the right to express and share their opinions to enhance the products or services available in the market place

d- They have the right to choose from multiple goods and service providers available in the market and can demand that they are furnished at a reasonable price and quality

e- They should be provided with detailed knowledge of a product including (but not limited to) expiry and comprehensive listing of ingredients for example

f- To be kept safe from any products or services that may causes harm or damage to their health or person.

Any personal or financial gain that a person obtains through wrongful or criminal deception is known as fraud.

Fraud in UAE is considered a serious crime and a person who is found guilty of committing fraud may receive a jail sentence or a fine. The punishment for fraud can range from 1 month to 3 years in jail although in a case of fraud against a government institution, that punishment could be extended up to 6 years in jail. If a judge was to decide that the punishment will be by way of a fine, that could range from AED 30,000 to AED 60,000, depending on the severity and the judges discretion.

Even in the event both parties agree upon a settlement, the guilty party may still be required to pay a fine. In that case, however, it may be possible to have the fine lowered.

If a person found guilty of committing fraud is convicted of the same crime again, they can be put under surveillance for a period of up to 2 years or even for a period that matches the previous jail sentence.

The punishment for attempted fraud can be up to 2 years in jail with a fine of up to AED 20,000 if that person is found guilty.

The rules change somewhat if a charge of fraud is related to a family member. In that instance, the public prosecutor is not able to pursue the case independently and the charges themselves must be brought by the accuser. In this instance, if the case is settled out of court, there will be no further action by way of fines issued over and above the settlement.

The most frequently asked questions raised about UAE labor law are, am I entitled to end of service pay or gratuity pay? According to UAE labor law, an employee becomes entitled to receiving end of service pay once they have completed 1 year of service.

The actual amount of end of service pay you may be entitled to varies greatly based on the length of service and whether you are employed in a free zone or by a mainland (non-freezone) company. Although Freezones are required to follow UAE labor law, some do have different (slightly more beneficial) calculations for this benefit.

Note: The employer may deduct from the gratuity any amount owed to them by an employee for advanced pay or loans. Expenses such as visa costs and recruitment costs should not be deducted.

The actual calculation can become quite complicated depending on individual circumstances as will include unused leave or holiday and can also include regular commissions. It is also based on your actual current salary rather than the starting salary that may be listed on your original employment contract.

The calculation is also different depending on whether you resign from your position or are terminated by the company (remember that there is also the possibility of compensation if you are terminated for any reason other than work related performance).

As a rule of thumb, the calculations are based on the criteria listed below and there is a useful calculator provided on the Ministry of labor web-site (http://www.mohre.gov.ae/en/end-of-service-calculator.aspx). Some freezones also provide their own calculator on their web-sites to guide you.

Generic Guidance for End of Service Calculations

Limited contract if terminated,
– Must serve at least one year for gratuity pay
– For service of more than 1 year but less than 5 year, the employee will get 21 days basic salary for each year
– For service of more than 5 year , the employee will get 30 days basic salary for each year

Unlimited contract if terminated,
– Must serve at least one year for gratuity pay
– For service of more than 1 year but less than 5 year, the employee will get 21 days basic salary for each year
– For service of more than 5 year , the employee will get 30 days basic salary for each additional year but must not exceed 2 years pay

Resigned under unlimited contract then,
– Must serve at least one year for gratuity pay
– For service of between 1 year to 3 year, the employee will get 1/3 of 21 days basic salary for each year
– For service of between 3 year to 5 year, the employee will get 2/3 of 21 days basic salary for each year
– For service of more than 5 year , the employee will get 21 days basic salary for each year

The introduction of VAT scheduled for January 2018 is going to have an impact on construction and consultancy contracts already in place and will be a pertinent point for consideration in new contracts being drawn up in the UAE. Those well ahead of the game may have already included articles to deal with the direct and indirect costs associated with VAT but it is highly likely that a great number have not. For those that have not included such clauses, the additional costs will most probably have to be absorbed under the existing payment terms which will have a knock-on effect to profitability. Those that have included the relevant clause will have the ability to add these costs over and above the contract rates or will at the very least have the grounds to take effective action to do so. As the time for implementation is fast approaching, having your contracts reviewed is something not to be put off any longer.

For many contracts across the construction sector in the UAE, the FIDIC standard forms are commonly used, particularly the FIDIC Conditions of Contract for Construction 1999 (Red Book). The Red Book specifically states that the contractor is obliged to pay all taxes as required under the law hence the contract price is understood to include such taxes based on the applicable rates in force at the ‘Base Date.’ That being said, there are also sections in the same book that state a contractor is able to claim additional costs that arise as a result from a change in the laws of the country where the works are being carried out.

Clause 14.1 (b) of the General Conditions of the Red Book states:

“the Contractor shall pay all taxes, duties and fees required to be paid by him under the Contract and the Contract Price shall not be adjusted for any of these costs except as stated in Sub-clause 13.7 [Adjustments for Changes in Legislation].

Clause 13.7 of the General Conditions the Red Book helpfully provides,

“The Contract Price shall be adjusted to take account of any increase or decrease in Cost resulting from a change in the Laws of the Country (including the introduction of new Laws and the repeal or modification of existing Laws) or in the judicial or official government interpretation of such Laws, made after the Base Date, which affect the Contractor in the performance of obligations under the Contract.”

The Base Date is defined as “the date 28 days prior to the latest date for submission of the Tender.”

What is particularly important to note is that Clause 14.1 includes the phrase “Unless otherwise stated in the Particular Conditions…” That translates to mean if the conditions do not impact clause 14.1 (b) or clause 13.7, a contractor may be permitted to claim amendments to the Contract Price because of the introduction of VAT. For a contractor to make such a claim for extension of time and/ or costs, the contractor should consider the notice requirements under clause 13.7. When looking carefully at additional conditions you should also be wary of sub clause 13.8 which refers to Adjustments for changes in cost and whether such a claim for changed costs has already been dealt with to ensure such a change is not doubly applied.

This standard clause is not included in contracts for Dubai Municipality and the costs of VAT will need to be absorbed in the contract price.

Construction contracts post January 2018
It is safe to conclude that the introduction of VAT will have an impact on the contract price of construction contracts. Specifying whether VAT is to be paid on top of the tender price or if it is included in the Contract Price will be necessary to avoid any misunderstanding or confusion.

Any action that goes against the implicit trust granted by an agreement between the trustor (the person giving the trust) and the trustee (the person entrusted) is known as breach of trust

For a breach of trust to have taken place, some specific elem Mrs should exist.

1- The person in breach must obtain possession of an object either on the basis of trust, usage, lease or mortgage for breach of trust to happen

2- A breach of trust can only apply to a moveable object such as money or a document.

3. To be classed as a breach of trust, the object in question needs to be obtained, damages or wasted or lost without proper authority having been granted. This is a specific difference to theft or fraud as an actual physical damage must be suffered.

4- Where a shareholder prevents other shareholders from exercising their rights for personal gain, a clear breach of trust exists.

Theft is considered as the removal or taking of someone else’s property or assets with the intention of retaining possession without their permission.

This is considered a serious crime in the UAE and the punishment available to a judge can range from a fine to a jail sentence. A jail sentence would usually be between 6 months and 3 years but can be even higher in specific circumstances. The sentence can rise as high as 7 years for theft in the workplace by an employee or even higher if a lethal weapon is used in carrying out the crime. Some common examples of theft cases and typical penalties are:

• Using a vehicle without the permission of the owner – jail sentence of one year or AED 10,000 fine.
• Employee theft, stealing from their employer’s office – jail sentence of 5 to 7 years.
• Grazing. Eating food in a store or supermarket without paying.
• Failing to pay for a meal consumed in a restaurant can be treated as a crime but will be up to the judge to determine if the refusal to pay is valid. A valid reason might be that the food was not as ordered by the person or that it was of poor or inedible quality.
• If a bank or money exchange accidently hands over a higher amount of money than the person is entitled to (such as a counter withdrawal or cheque encashment) it would be considered theft if the person deliberately keeps the additional money.

The unconditional and immediate transfer of property without any consideration (payment or reservation) by one person to another is known as Heba, under muslim law.

In other countries, the term GIFT may be similar to what is known as HEBA but for the purpose of this article, we are referring to the donation of property to another person without the expectation of anything in return.

Once Heba has occurred, the transaction is final. In the event Heba was granted during a period of sickness, however, this could be contested by the potentially rightful heirs of the property in question. Similarly, if the donation was made under threat or duress, it can be revoked which also applies to cases where the gift was granted because of dishonest or deceitful action. For his to be revoked it must be by court order

There are 2 conditions whereby Heba can be granted at a future date which relate to death and birth. Heba can be granted whereby the transfer of the property occurs on the death of the current owner. It is also possible to enact Heba for the benefit of an unborn child provided that the child is born within 6 months of the Heba being given.

As with most aspects of law, it is strongly advisable to have any Heba you wish to grant clarified in writing and to have a witness to further authenticate its validity. In principal, Heba can be given verbally but has a strong possibility to be contested later if this cannot be verified clearly.

An important point to note. Heba can be refused by the person it has been granted to so may be advisable to ensure the intended recipient is happy to receive it.

Arbitration is an alternative dispute resolution court in the UAE and has been increasingly used as the chosen jurisdiction to settle matters that require a legal path to be followed. The fact that arbitration is on the rise and more commercial companies are inclined towards it’s use may be largely attributed to the fact that proceedings may be conducted in English. With a very high percentage of the population being expatriate who conduct much of their business in the English language, it follows that they may be more inclined to seek legal remedies in the same language.

Moreover, in arbitration a special body can be established to handle certain types of dispute which can result in quicker judgments (without appeal and cessation proceedings) making them cost effective overall when compared to broader and full UAE courts process.

Recent years have continued to see both local and international investors attracted to investing in the construction sector which has enhanced Dubai’s reputation as an important international real estate investment market. The recent slump (decline or correction depending on your view) that has impacted the real estate market since 2008 did not halt a continuous influx of investment in the construction sector. For this reason, there are a growing number of disputes concerning many aspects of the delivery and release of such properties with the documentation having specified arbitration proceedings as the jurisdiction for any legal remedy.

New laws were introduced to the UAE in June 2016 relating to the abuse of children and protection of childrens rights. For the first time, individuals responsible for the care of a child were made accountable for their actions and the safety of the children under their care.

The law is often referred to as Wadeema’s Law in memory of the late young Emirati girl who died as a result of the type of abuse the legislation was put in place to prevent.

Two child protection centers have been set up in Dubai whereas in Abu Dhabi, social workers are made available at the child affairs prosecution service to assist in cases related to children. They have the authority to remove a child if their life is in danger.

There is a hotline number to call to report incidents involving possible abuse of a child. You can call 116111 to register a complaint or concern of this matter.

If a parent reports child abuse, they will be connected to a lawyer for free advice whereas, if a child reports a case, action will be taken against those taking care of the child. The punishment for abusing or mistreating a child may vary from financial measures such as a fine or possibly jail.

As a general guide, the penalty for serious offences relating to child abuse can typically be a fine of Dh50,000 and 10 years in jail.

Local officials are already trying to persuade schools to hire specialist child psychologists and hospitals are being urged to implement a suitable reporting structure. This will help doctors and teachers recognize the signs of child abuse which many children suffer in silence and assist them in knowing the correct actions to follow.