United Arab Emirates: New Property Dispute Resolution Forums In Dubai

Over the past couple of years Dubai has seen the establishment of various property dispute resolution forums. In this article we briefly outline each of the dispute resolution forums that have been established in Dubai in relation to property disputes and bounced cheques.

Dubai Property Court

The Dubai Property Court was established pursuant to Decree No. 28 of 2008 Cancelling Decree No. 30 of 2007 "Appointing a Special Judicial Committee on Property Dispute Resolution for the Emirate of Dubai".

The Dubai Property Court has authority to consider disputes regarding properties located in the Emirate of Dubai including the areas specified in the Regulation where non-locals can own properties.

The Dubai Property Court commenced taking cases in September 2008 and is active in hearing disputes between developers and purchasers, especially applications for contract termination and damages.

Centre for Amicable Settlement of Disputes

The Centre for Amicable Settlement of Disputes was established pursuant to Law No. 16 of 2009 "Establishing the Centre for Amicable Settlement of Disputes" (hereinafter referred to as the "Centre").

The Centre is affiliated to the Dubai Civil Courts and shall examine such disputes as may be defined by a resolution of the Chairman regardless of their value or nature, excluding:

• Summary and temporal orders and cases;
• Cases to which Government is a party;
• Cases beyond the jurisdiction of the Courts; and
• Cases registered with the Courts before the provisions of the Law comes into force.

Any case falling within the jurisdiction of the Centre may be registered with the Courts only after it has been submitted to the Centre which resolved to refer the dispute to the Court of competent jurisdiction. Therefore the parties to the dispute will not be able to proceed directly to Court without having first attempted an amicable settlement of the dispute through the Centre.

The procedure the Centre shall follow in the settlement process shall be for the Centre to summon the respective litigants or their representatives to a meeting. The Centre shall review the documents and relevant evidence pertaining to the dispute and attempt to reach an amicable solution to the dispute in question.
The legal terms prescribed for dismissing a case as well as the prescription periods provided for in the applicable laws shall be suspended from the date of registration of the dispute before the Centre.

The Centre will amicably settle any dispute within a period not exceeding one month from the date on which the respective litigants appeared before it. Such period may be extended for similar periods by a resolution of the competent judge.

The Centre may seek the assistance of any expert and jurist it deems eligible to provide opinions on technical matters submitted before it.

In case a conciliation is reached, the same shall be evidenced by a conciliation agreement signed by the parties to the dispute and approved by the competent judge. Such agreement shall have the authority of a writ of execution.

Where a dispute is not amicably settled through conciliation for whatsoever reason, then such dispute shall be referred to the Court of competent jurisdiction.

The Centre is not yet operational, however same is expected to be in operation within the second quarter of 2010.

Special Committee to Settle Cheques of Real Estate Transactions

The Special Committee to Settle Cheques of Real Estate Transactions is an ad hoc judicial committee formed pursuant to Decree No. 56 of 2009 (hereinafter referred to as the "Committee").

The purpose of the Decree can be summarised as follows:

• To counteract the ever increasing number of criminal cases before the Courts involving bounced cheques related to property transactions that have resulted in the detention of many of those involved in the property sector;
• To limit the arbitrary use of cheques that are issued to property developers by tying their due dates to the percentage of completion of projects that are planned or underway in the development zones;
• To address the situation where cheque issuers have been detained on account of debts that are not owed to the claimants particularly in cases where the reason for the bounced cheque is attributable to the developer's failure to complete or deliver the property on time;
• To facilitate the process of determining issues involving bounced cheques in property transactions with rules of procedure that is different from the rules of procedure of the Public Prosecution and the Courts
• To boost confidence in a vital and important sector – the property sector, which is the mainstay of the economy in the Emirate by dealing fairly with all the parties involved in the sector.

The Committee is a three member Committee consisting of:

• A judge of court of Dubai Appeal Court (Chairman);
• A judge of court of Dubai First Instance Court (Member);
• A representative of Dubai Land Department (Member).

The Committee has exclusive jurisdiction to settle complaints of returned cheques issued by the purchaser to a real estate developer or cheques issued by beneficiaries and tenants of long-term leased properties whose rights are governed by the provisions of Law No. 7 of 2006, i.e. not short term tenancies registered at the Real Estate Regulatory Authority, but leases registered in the Real Property Register maintained by the Dubai Land Department

In order to settle cheque complaints the Committee may:

• Cancel a bounced cheque issued to the developer if he is not entitled to the amount of the cheque due to the fact that the developer has not commenced construction of the project or if the purchaser's payments are disproportionate to the value of the work completed;
• Compel the issuer of the cheque to write a new cheque to replace the cheque in question, payable on the date specified by the Committee, if it appears that the developer's entitlement relative to the amount of the cheque is significantly less than the value of the work completed. In order to exercise this authority, the Committee must tie the dates and amounts of the issued cheques with the percentage of completion of projects that are planned or underway in the development zones;
• Refer the bounced cheque to the competent judicial body to take legal action against the cheque issuer if it is found that the developer is entitled to the amount of the cheque;
• In discharging its role under the Decree, the Committee is empowered to seek the assistance of suitable experts and consultants in the property sector in evaluating percentage of completion of projects involving contracts between developers and purchasers.

Judicial control bodies, including police stations, shall refer all complaints of cheques stipulated under this Decree to the Committee. The Public Prosecution and Courts may not investigate bounced cheques matters under this Decree or resolve any dispute in connection therewith before the same are referred to and considered by the Committee. They shall also suspend the consideration of any complaint or penal claim related to such cheques and refer the same to the Committee for consideration pursuant to this Decree.
The rulings of the Committee are final and cannot be challenged, and shall be enforceable through the enforcement department of the Courts.

The Committee shall exercise its powers by virtue of:

• The laws applicable in the Emirate of Dubai;
• Islamic Sharia principles;
• Customs and practices, unless they infringe the law, public order or public ethics;
• Normal equity principles and rules of justice and equality.

Dubai World Tribunal

On the 14th December 2009, the Ruler of Dubai issued Decree No. 57 of 2009 "Establishing a tribunal to decide the Disputes Related to the Settlement of the Financial Position of Dubai World and its Subsidiaries" (the "Decree") in terms whereof a special tribunal (the "Tribunal") was established with the power to supervise the financial reorganisation of Dubai World and its subsidiaries (the "Corporation") and with jurisdiction to hear and determine disputes relating to the restructuring of the debt of the Corporation.

The Decree was issued to provide a comprehensive legal framework, consistent with international standards, to govern any future formal reorganisation and restructuring of the Corporation and to deal with the settlement of disputes related to the Corporation. The Decree is based on the insolvency laws, rules and regulations of the Dubai International Financial Centre ("DIFC") as varied by the Decree.

Underpinning this legal framework, the Decree established a Tribunal composed of the following three senior international judges from the DIFC Courts:

• Sir Anthony Evans, Chief Justice of the DIFC Courts;
• Michael Hwang, SC, Deputy Chief Justice of the DIFC Courts;
• Justice Sir John Murray Chadwick, Judge of the DIFC Courts.

The Decree affects all creditors of Dubai World and its subsidiaries.
The Tribunal has jurisdiction to:

• Hear and decide any demand or claim submitted against:

- The Corporation, including hearing and deciding any demand to dissolve or liquidate the Corporation; and

- Any person related to the settlement of the financial obligations of the Corporation, including the Chairman and members of the Board of Directors, as well as the employees and workers of the Corporation.

• Issue interim and interlocutory orders and decisions, including injunctions to any person to act or not to act, or other order as the Tribunal considers appropriate.

The Tribunal may assign or appoint as experts persons having expertise and competence in the matters submitted to it.

The Tribunal shall decide the demands and claims submitted to it by virtue of:

• DIFC Law No. (3) of 2009 Concerning the law of Insolvency, according to the amendments stated in the Schedule to the Decree;
• The Regulations Issued by the Board of Directors of the DIFCA Concerning DIFC Insolvency Regulations, according to the amendments stated in the schedule attached to the Decree;
• DIFC Law No. 10 of 2004 Concerning the Court of DIFC, according to the amendments attached to the Decree;
• Legislation in force in the Emirate of Dubai;
• Commercial custom; and
• Principles of justice, and rules of righteousness and equity.

The Tribunal shall have its seat and hold its hearings in the DIFC and all hearings shall be open to the public unless the Tribunal decides otherwise for considerations relating to the conduct of justice or to protect confidentiality of information.
The decisions and orders of the Tribunal are final, irrevocable and not subject to any appeal or review. The decisions and orders shall be executed by a competent execution judge. The execution judge shall not take any action that may hinder the execution of the decision or order issued by the Tribunal.

Neither the competent Courts in the Emirate of Dubai or the DIFC Courts shall hear or decide any demand, claim or other matter which is within the jurisdiction of the Tribunal by virtue of this Decree.

Special Judicial Committee to resolve disputes related to Amlak Finance PJSC and Tamweel PJSC

The special judicial committee to resolve disputes related to Amlak Finance PJSC and Tamweel PJSC was established pursuant to Decree No. 61 of 2009 (hereinafter referred to as the "Committee").

The Committee shall consist of the following members:

• Judge, Mohammed Khamis Basiouni (Chairman);
• Judge, Jihad Mhammed Kasawna (Member);
• Judge, Abdullatif Mhammed Al Ulama (Member).

The Committee has jurisdiction to adjudicate the following

• To consider and adjudicate any request or claim submitted against:

- Amlak Finance PJSC or Tamweel PJSC or any of their subsidiaries, including liquidation and dissolving requests;

- Any person linked to the settlement of the financial position of any of these two companies, including their respective Chairman, Board Members and all employees and workers.

• To issue temporal and preliminary orders and decisions, including binding any person to take an action or refrain from action or any other procedure the Committee may deem fit.

The Committee may avail of the assistance of any experts and

consultants in matters presented to the Committee.

The Courts are prohibited from considering and adjudicating any request or claim that falls under the Committee jurisdiction in accordance with this Decree. Courts are also obligated to stop considering any cases or claims submitted to the Court before the enforcement of this Decree and transfer the same to the Committee.

The judgments issued by the Committee are final, definitive and non-appealable in any way. Such judgment shall be executed through the execution department at the Courts.

The Committee shall exercise its authorities in accordance with:

• Applicable laws in the Emirate of Dubai;
• Islamic Sharia provisions;
• Custom, unless it is against the law, public order or public morals;
• Principles of public justice and rules of right and equity.

Additional dispute resolution forums

We have briefly discussed the various property dispute resolution forums that have been established in the Emirate of Dubai over the past couple of years to deal with property disputes and bounced cheques, however the picture would not be complete without also referring to the following additional existing dispute resolution forums:

• Dubai International Arbitration Centre ("DIAC")

The Centre was first created in 1994 and was known as the "Centre for Commercial Conciliation and Arbitration". Today the centre is known as the "Dubai International Arbitration Centre" (the "DIAC"), and is an autonomous, permanent non-profit institution.

• DIFC LCIA Arbitration Centre

The DIFC entered into a joint venture with the London Court of International Arbitration (LCIA) to establish the DIFC LCIA Arbitration Centre, which offers dispute resolution services to all business and commercial sectors, providing a cost-effective and timely alternative to the Courts.
The DIFC LCIA Arbitration Centre is established in the Dubai International Financial Centre and its mission is to promote more effective resolution of international business disputes through arbitration and mediation.

• The Judicial Committee authorised to settle disputes between landlords and tenants

The Judicial Committee was established pursuant to Decree No. 2 of 1993, and has exclusive jurisdiction to hear all landlord and tenant disputes in Dubai. Their decisions are final and binding and cannot be appealed at Dubai Courts.

Conclusion

Dubai has therefore developed a comprehensive property dispute resolution forum which deals with all types of property disputes and bounced cheques. Also once the Centre for Amicable Settlement of Disputes is fully operational, if the Chairman resolves that property disputes fall within the jurisdiction of the Centre, then we would expect more matters to be amicably settled without the need of proceeding to the Dubai Property Courts for determination which will have the effect of further alleviating the burden of the existing judiciary resulting in court time periods improving even further.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.