2021: A Year in Review – UAE Law 2021

Big developments have been executed across the UAE in the past 12 months.  Legislators and regulators have continued to refine nearby law to enhance and employ intercontinental most effective apply across the UAE.  We have highlighted some of the big developments together with a variety of predicted modifications. 

Work Legislation

UAE Labour Law 

In November 2021, the UAE Cabinet accredited the Federal Regulation No. 33 of 2021 (the New Labour Legislation) which will be productive as of 2 February 2022. The New Labour Regulation supplies a radical overhaul of the current UAE Labour Law which will implement throughout the 7 emirates as well as the cost-free zones, besides for DIFC and ADGM. 

The New Labour Law delivers improvements to work contracts as mounted phrase contracts, adaptable doing work arrangements, amendments to termination provisions, conclusion of assistance gratuity and prohibits discrimination and harassment together with several other adjustments. 

Applying Rules are referenced during the New Labour Legislation and these Rules are nonetheless to be issued by the Ministry of Human Sources and Emiratisation.  It is anticipated that these Laws will present further depth as to the supposed procedure of the New Labour Law.  While it is not clear when these Polices will be issued, we anticipate that they will be issued on, or shortly prior to, the efficient day, 2 February 2022. 

Operating Week 

Lately it was declared that from 1 January 2022, all UAE federal authorities entities will go to a 4 and a 50 percent day performing 7 days.  In addition, the performing 7 days would start on Monday and close on Friday. Importantly, all educational facilities will also change to a Monday to Friday functioning 7 days.  In light-weight of these changes, it is unavoidable that private sector companies, both equally onshore and offshore, will mirror these modifications and shift to a Saturday and Sunday weekend. 

Businesses that intend to change the performing week should really make certain that their staff members are adequately educated of any proposed adjustments.  In addition, work contracts and insurance policies should be reviewed, and thing to consider should really be taken as to the arrangement for staff who want to attend Friday prayers. 

Amendments to the DIFC Work Law 

Early into 2021, the DIFC Authority announced a consultation interval on the DIFC Regulation No. 2 of 2019 (as amended by DIFC No. 4 of 2020).  On 21 September 2021, the amendments have been mirrored inside of DIFC Regulation No. 4 of 2021 (the New DIFC Legislation) along with the Work Restrictions 2021. 

The key facet of the amendments was to ensure that the DIFC Work Law operated as it was intended and to restrict any opportunity abuse of the policies.  As this kind of, the New DIFC Law narrowed the scope of the “Additional Payments” definition to assure that only these payments could be excluded from the calculation of the DEWS contribution and that any settlement to limit the employee’s regular monthly wage would be null and void. 

Another important modify was that the New DIFC Law prolonged safeguards to secondees as very well as quick-time period personnel providing them with security from discrimination and harassment. 

ARBITRATION 

Dubai Arbitration Reforms  

This 12 months brought considerable alterations to the Dubai Arbitration Centres.  

In January the new DIFC-LCIA Arbitration principles were being published but by September the introduction of the Decree No. 34 of 2021 about the Dubai Global Arbitration Centre (the Decree) altered the landscape for arbitrations in Dubai.  

The Decree abolished the Emirates Maritime Arbitration Centre (EMAC) as very well as the Dubai Global Finance Centre Arbitration Institute (the DAI). 

The DAI offered the administration for the regional notion of the London Court docket of Global Arbitration, the DIFC-LCIA Arbitration Centre.  The DIFC-LCIA operated below the DIFC-LCIA Arbitration Procedures which mainly mirrored the LCIA’s. 

The intent of the Decree was to generate a single consolidated arbitration centre in Dubai regarded as the Dubai Intercontinental Arbitration Centre (DIAC).  While the dissolution of the EMAC and the DAI was helpful as 20 September 2021, Article 9 of the Decree delivers DIAC with a 6-month grace interval to regulate the centre in accordance with the new Decree.  Report 2 of the Decree delivers that the headquarters shall be situated onshore in Dubai with a department inside the DIFC (offshore). 

These variations are of specific relevance for events now concerned in arbitration but also to these with agreements to take care of disputes under the procedures of both DIFC-LCIA or EMAC. 

As such, it is anticipated that new DIAC Rules shall be revealed in accordance with the Decree and shall update the present 2007 DIAC Guidelines. 

LITIGATION

Dubai Courts: Applicable Interest 

The correct to assert interest was recognised in 1993 less than the Federal Legislation No. 18 of 1993 establishing the Business Transactions Regulation.  In the absence of a contractually agreed fascination fee, Short article 76 of the Industrial Transaction Law furnished that a creditor could declare up to 12% curiosity for every annum right up until whole settlement was received.

In observe, the onshore courts have utilized fascination at a amount of 9% for each annum exactly where events had been not certain by a mutually agreed contractual price.  

On 9 June 2021, the Court docket of Cassation issued a unanimous determination to revise its longstanding apply.  Resolution No. 1 of 2021 (the Resolution) was issued, binding the Dubai Courts to apply an fascination rate of 5% per annum wherever functions have been not bound by an agreed level.  Although this Resolution applies to the Dubai Courts only, we can count on that the Courts of the other emirates will implement a very similar fascination price. 

Payment Order 

2021 has clarified the scope for lenders to recuperate money owed through a quick-monitor method recognized as a payment purchase.  This will allow creditors to attain a monetary judgment as opposed to boosting a substantive claim at the Dubai Courts.  

This year, the Courtroom of Cassation clarified that these statements demanded to be supported by composed evidence confirming that the financial debt had been recognized, or acknowledged, as staying owing by the debtor.  

In addition, the UAE Civil Procedure Code was amended in August 2021 to offer that the Dubai Courtroom experienced jurisdiction to listen to a financial debt circumstance, even if the problems for issuing a payment get were fulfilled.  This removed the chance of the Court docket dismissing the scenario and provided reassurance to litigants.  

UAE Penal Code

A new UAE Penal Code is anticipated in the new year which will type aspect of various new reforms launched in 2022.  

The new UAE Penal Code shall modernise the present laws.  A quantity of amendments relate to bounced cheques which is a felony offence in the UAE.  The Federal Decree No. 14 of 2020 amended the Professional Transaction Regulation No. 18 of 1993 and the new amendments shall be helpful as of January 2022.  

The amendments primarily target on the decriminalisation of bounced cheques and partial payment of a cheque.  These amendments present a restricted standards for a bounced cheque to have a criminal sanction and will minimize the huge number of actions at the legal court.  In addition, a payee can present consent in creating for the bank to challenge any sum out there to the drawer of a cheque wherever there are insufficient funds.  In essence, this delivers consent that the harmony is due and a civil motion could be raised for the stability. 

Company & COMMERCIAL 

The New Corporations Legislation

In an work to produce the nation’s authorized framework, the UAE government has issued Federal Legislation No 32 of 2021 (the New Firms Legislation) which is to come into pressure on 2 January 2022. The New Organizations Regulation replaces Federal Legislation No. 2 of 2015 (the 2015 Organizations Regulation) which has been the most important legislation guiding commercial transactions considering the fact that its inception.

The New Businesses Law will consolidate and repeal the 2015 Companies Legislation and its amendments, as perfectly as implement crucial changes in industrial governance and transactions. To give a transient summary of the expected changes, the New Businesses Regulation addresses mergers and acquisition transactions with the recognition of two new company autos, (i) the exclusive intent acquisition company, and (ii) the exclusive goal vehicle. The New Companies Law also provides for many governance and administration provisions relating to Confined Liability Companies and Public Joint Stock Providers.

Utilizing regulations and more direction are predicted to be issued in the new yr.

The New Factoring and Assignment Legislation

Federal Regulation No. 16 of 2021 on Factoring and Transfer of Accounts Receivables (the Factoring Regulation) which was entered into force on 8 December 2021, delivers the very first regulatory framework to address distinct transactions concerning factoring and assignment of receivables. Previously, the only guidance obtainable for these transactions was Federal Law No. 5 of 1985 on Civil Transactions Regulation which tackled features of governing the assignment of financial debt, and Federal Law No. 4 of 2020 on Securing Desire with Moveable House which resolved areas of assignments more than receivables taken by way of stability. 

The implementation of this law unifies the polices which implement to assignments in the UAE and presents a foundation for the enhancement of a new authorized routine. The Factoring Legislation addresses the needs for assignments and transfers of receivables in the region, as very well as provides guidance on how to figure out the validity and precedence of competing statements over assigned receivables.

SUMMARY

2021 has seen sweeping variations throughout several sectors effecting the UAE and freezones as reforms align to international criteria.  The speed of authorized and regulatory change will keep on well into 2022 with even further reforms and laws predicted.  It will be intriguing to see how these improvements unfold in apply during 2022. 

For further more data, or to go over in additional element any of the higher than modifications, you should get in touch with Joanna Stewart ([email protected]) or on 04 343 8897 the place our workforce will be delighted to support you.

December 2021