United Arab Emirates: Cassation Court Sets Aside Off-Plan Real Estate Arbitration Award For Public Policy

Last Updated: 7 August 2017
Article by Samer Abou Said


Much ink was spilled on the matter of setting aside arbitration awards that deal with cancellation of off-plan sale and purchase contracts before UAE courts. It started with the first Ruling in Cassation Petition No 190/2011 dated 12 February 2012 where the Dubai Court of Cassation set aside the award of the arbitrator on the grounds that reliance on Article 3 of Law No 13/2008 Regulating the Interim Real Estate Register in the Emirate of Dubai to nullify a contract for sale of an off-plan unit for non-registration in the Interim Real Estate Register ("the Register") is a matter of public policy and hence falls under the remit of Dubai courts, and consequently is not subject to arbitration.

The Court reiterated this position later in its Ruling in Cassation Petition No 14/2012 dated 16 September 2012.

However, to the relief of the arbitration circles, the Court sought to limit the application of the principle, or at least to clarify its stance, when it observed later in its Ruling in Cassation Petition No 282/2012 dated 3 February 2013 that an award declaring the cancellation of a contract for sale of an off-plan unit for non-performance of the developer of its obligations can be subject to arbitration.

Nevertheless, in the Ruling in Petition No 230/2013 of October 2013 the Court added a public policy argument.

The Case

The background of the case concerns a purchaser of two off-plan units who obtained an award in his favour against a developer whereby he was awarded the sum of the money he had advanced on the grounds that the developer had failed to deliver the unit. The purchaser applied to the Court of First Instance in Dubai to enforce the award. The Court granted the applicant the relief sought. The developer appealed, invoking the public policy argument, and obtained a decision from the Court of Appeal in his favour which overruled the decision of the Court of First Instance on the basis that the arbitrator had decided on an issue that was not arbitrable because it dealt with a matter of public policy as provided for in Article 3 of Law 13 for 2008.

The applicant appealed to the Court of Cassation, arguing that the Court of Appeal had erred in its appraisal of the factual background when it set aside the award on the basis that the arbitrator had nullified the award for non-registration whereas the correct interpretation should have been that the arbitrator had cancelled the two contracts on the basis of the developer's non-performance of its obligations to commence and complete construction.

The Ruling of the Court of Cassation rectified the erroneous understanding of the facts by the Court of Appeal but it reached the same conclusion as the Court of Appeal, thus upholding the impugned judgment.

It is noteworthy that during the arbitration proceedings the applicant sought relief to annul the two contracts on the basis that they were not registered in the Interim Register (pursuant to Article 3 of Law 13/2008), but the relief was amended later after signing the terms of reference to cancellation of the two contracts for the developer's non-performance of its contractual obligations following the developer's tendering of an official document confirming the registration of the sale contract in the Register. The amendment of the relief was due to the developer's submission of evidence that the two contracts were registered.

In its reasoning the Court of Cassation stated that " ... if the relief of the Claimant includes annulment of the contract for non-registration in the Interim Register, it will render the arbitration clause inapplicable pursuant to Article 203 (4) of the Civil Procedures Code ...".

In respect of the Claimant's argument that the relief was amended at a later stage to become cancellation of the contracts on the ground of non-performance, the Court stated that the arbitrator had discussed the issue of nullification of the two contracts for non-registration and had concluded that the two contracts were registered, which:

"indicates that the issue of nullification of the two contracts was raised before the Arbitrator ... which mandates that the Arbitrator has no jurisdiction to rule over the matter and her award shall be set aside ... [T]he fact that the arbitrator stated in her award that there is no need to discuss the issue of nullification of the two contracts for non-registration has no bearing as long as the issue was raised before her."

The two salient differences between this Ruling and those in Petitions 180/2011 and 14/2012 mentioned above are:

  • in the instant case the contract for the sale of the unit was registered in the Interim Register in compliance with Article 3 of Law No 13/2008, while this was not the case in the previous two rulings;
  • in the instant case the arbitrator cancelled the contract on the ground of the developer's non-performance of its contractual obligations, while in the previous rulings the contract was nullified for non-registration of the sale contract in the Register.


Therefore, the Court of Cassation ruled that the arbitrator's cancellation of a contract without reliance on Article 3 of Law No 13/2008 would not grant his award blanket immunity from court review if the issue of annulment for non-registration was raised and discussed during the proceedings.

This ruling imposes another parameter for arbitrators to adhere to when reviewing similar matters, namely, an arbitrator's cancellation of the sale contract on the ground of non-performance of obligations is not a matter of public policy and can be subject to arbitration; however it will become a matter of public policy if the issue of annulment due to non-registration pursuant to Article 3 of Law No 13/2008 is raised by the Claimant and discussed during the proceedings.

It is submitted that not any argument related to Article 3 will make the arbitration clause inapplicable; rather, it is the reliance of the Claimant on such argument that may render the clause inapplicable; for example, a frivolous defence by a defendant related to Article 3 will not affect the validity of arbitration proceedings.

Therefore, in this Ruling, notwithstanding that the Applicant amended his relief, it would appear that the Court of Cassation took the view the lack of jurisdiction of the Tribunal was not rectified by the applicant's later amendment of the relief sought because the Tribunal did not have jurisdiction from the outset.

Originally published 2016-11-01

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.