At the heart of this matter is the interpretation of Article 104 of the UAE Constitution, which states that local judicial authorities in each emirate have jurisdiction over all judicial matters not assigned to the federal judiciary by the Constitution. This provision has led to the establishment of independent judicial systems in each emirate, separate from the federal judiciary.

The Committee was tasked with resolving a conflict between two legal principles established by different courts. On one side, the Dubai Court of Cassation had ruled that parties could not agree to violate the jurisdictional rules of courts belonging to an independent judicial authority, as this jurisdiction was considered a matter of public order. On the other side, the Federal Supreme Court and the Ras Al Khaimah Court of Cassation had previously allowed for agreements on jurisdiction even when the elements of jurisdiction were present in another court belonging to a different judicial authority.

The Committee’s decision affirms that the distribution of jurisdiction among federal and local courts is a matter of public order and cannot be altered by agreement between parties. This principle is derived from the constitutional separation of judicial authorities among the emirates.

The Committee emphasized that the application of Article 33/5 of Federal Decree-Law No. 42 of 2022, which allows parties to agree on the jurisdiction of a specific court, must be limited by respecting the jurisdictional authority of courts that are subject to an independent judicial system. This interpretation aims to prevent parties from being brought before incompetent courts and to maintain the constitutional distribution of judiciary among different emirates.

This decision has significant implications for legal practice in the UAE:

It reinforces the principle that each emirate’s judiciary is independent in matters not assigned to the federal judiciary by the Constitution.

Agreements between parties regarding court jurisdiction cannot override the constitutional distribution of judicial authority.

When drafting jurisdiction clauses in contracts, ensure they do not violate the jurisdictional boundaries between emirates.

Courts are now required to consider their jurisdictional competence as a matter of public order, even if not raised by the parties.

The Committee’s ruling seeks to create a balance between respecting party autonomy in commercial agreements and maintaining the constitutional structure of the UAE’s judicial system. It aims to prevent the overburdening of courts with cases outside their jurisdiction and to ensure that the distribution of judicial authority among emirates is preserved as envisioned by the Constitution.

This development underscores the ongoing evolution of the UAE’s legal system as it navigates the complexities of a federal structure with distinct local jurisdictions. Legal professionals and businesses operating in the UAE should take note of this clarification and adjust their legal strategies accordingly, particularly when dealing with cross-emirate disputes or drafting agreements with jurisdiction clauses.

Conclusion

As the UAE continues to establish itself as a major international business hub, such legal clarifications are crucial in providing certainty and stability to the country’s judicial framework, ultimately enhancing its attractiveness for both local and foreign investments.

Having said that, Contact Khairallah Advocates & Legal Consultants and benefit from our free 30-min legal consultation.

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