Study of Various Laws used in the UAE Courts - Coursework Example

Study of Various laws used in the UAE Courts By Mohamed Sultan Almarar 2- Mohamed Ahmed Almansoori [Mr. Nadeem Ahmed] [Commercial law] 11-25] Table of Contents Study of Various laws used in the UAE Courts 2 Introduction 2 Methodology 3 Section 1 3 Civil Law 3 Criminal Law 7 Sharia Laws 10 Section 2 The UAE Labor Law 13 Wages 13 Leaves 14 Conclusion 16 Works Cited 17 Study of Various laws used in the UAE Courts Introduction This paper focuses on an extensive discussion of the legal system of the United Arab Emirates. The United Arab Emirates is as a country with civil law jurisdiction, heavily influenced by laws originating from the French, Romans, Egyptians, and even the Islamic Religion (Price & Al Tamimi). While many consider submission of cases to the courts for resolution as the most effective way to resolve a dispute, it is undeniable that arbitration is currently gaining popularity in the country in view of the capacity of the United Arab Emirates to establish itself as a regional hub for international business (Price & Al Tamimi). The United Arab Emirates’ legal system follows three main laws, which are civil law, criminal law, and lastly, Sharia law. To address the traditional or conventional law and Sharia law, there are two types of courts in the UAE. The first type is the traditional or conventional courts, which hear civil and criminal actions. Civil laws pertain to commercial matters and other issues relating to maritime disputes (Price & Al Tamimi). On the other hand, criminal laws focus on the discussion of those that deal with people accused of the commission of certain felonies. The second is the Sharia or Islamic courts (Price & Al Tamimi). Sharia Laws are those that work hand in hand with the civil and criminal law, governing the civil matters between the Muslims and Non-Muslims. Generally, Sharia laws focus on issues regarding divorce, inheritances, child custody, child abuse, and guardianship of minors. The importance of the Sharia Laws is that they traditionally apply the same laws in the absence of codified provisions as traditional court systems (Price &Al Tamimi). Methodology In order to obtain pertinent information for this particular research, the focus is on the use of the literature search method to search, obtain, and analyze pertinent cases and laws in the United Arab Emirates concerning the topic at hand. Section 1 Civil Law Civil Laws in the United Arab Emirates, focuses on issues pertaining to commercial matters such as the promulgation of contracts and even to maritime disputes. The primary source of law in the UAE is the statutory code, where both local and federal courts apply the federal laws for dispute resolution (Brendel, Barrette, & El-Riachi, 311). The Federal Law number 5, 1985 Promulgating the Civil Transaction Code of the UAE addresses issues facing contractors seeking assistance for non-payment (Brendel, Barrette, & El-Riachi, 310). In the event a problem arises pertaining to a contract, where there is a lack of “specific legislation to the contrary and where specific legislation is silent on a point in issue” the civil code provisions will apply (Brendel, Barrette, & El-Riachi, 311). This provides a backup measure to cover the holes in the federal statutory codes when resolving a dispute. In the UAE, courts do not keep an accounting of cases gone to trial or decisions from those cases for building on previous case law. Building on case law benefits the person seeking relief from the courts as there is at least one other person who in a similar situation received a ruling in their favor. Case law would then support the argument made in the new case and provide a standard of proof necessary to make the original argument. In the UAE, this does not happen so every case must present with sufficient evidence and on its own merits before a judge. Judges have no expectation to render a decision based on previous decisions, meaning there is no precedent set outside of relying on the civil codes. Simply put, a judge can base his decision solely on the facts of the case in front of him and make a decision that is contrary to other decisions he or other judges have made in similar situations. For a contractor seeking relief in the UAE, understanding the civil codes and the federal laws is the best manner of protecting oneself. In the UAE Civil Law no. 2 of 1987 (the “civil code”) articles 870 to 896 specifically, provides the legal framework for the construction industry (Beamish, 2). The codes explain the expectations of both parties and the manner to find resolution without relying solely on a decision from the courts. In commercial transactions involving a contract, it is necessary for all parties to understand the significance this document has in their business dealings including the limitations of their agreement (Coburn). More importantly, both parties must understand what course of action is valid for them to undertake to ensure fulfillment of the contract including when one party will not pay for services rendered or materials provided. The UAE Commercial Transaction Law no. 18 of 1993 (the “CTL”), articles 6 and 11spell out the criteria required to become a party to a construction claim (Al Tammi & Company, 1). By familiarizing oneself with the statutes is the best manner to understand the elements a contract should contain and what course of action to take, such as arbitration and a mechanics lien when the other party refuses to pay for services and materials (Al Tammi & Company, 1). The Civil Procedure Law of 1992 (the “CPL”) articles 203-219 specifically discusses the use of arbitration and the manner in which the arbitral awards are authenticated (Al Tammi & Company, 1). Case Summary The amount of unpaid contractors in the UAE has increased in recent years costing “hundreds of millions of dirhams to hundreds of millions of US dollars” (Delmar-Morgan). These cases had been clogging up the court systems when arbitration of these cases became popular. Now, the arbitration cases have increased to a point where it is difficult to tend to the client’s needs in a timely manner. These are not cases of a couple hundred or thousands of dollars or dirhams but millions. One case involving British consultants and engineers who were never paid equaled $636 million (Delmar-Morgan). WS Atkins, a company that designed Burj Al Arab waited for payment of $39.7 million (Delmar-Morgan). Judgment Through the arbitration process, WS Atkins expected payment by the first quarter of the next year, yet WS Atkins continued to wait for payment to occur. When threatening a lawsuit or forcing arbitration does not bring payment to the contractors and engineers, there is another option that is effective but not as widely used and that is a mechanics lien. A mechanics lien is an important option with respect to the Civil Laws of the United Arab Emirates. A mechanic lien offers protection to contractors seeking payment for failing or troubled projects in an effort to avoid the rising number of lawsuits and arbitrations in the courts (Coburn). A mechanics lien is easier, quicker in resolution, and nearly guarantees payment. This option applies to contractors, engineers, consultants, and architects seeking relief under the UAE Federal Law Number Five, offering a manner to secure payment for completed work or materials supplied (Coburn). The lien attaches to the property making it impossible to sell the property without paying the contractors with liens first. In many cases, a mechanics lien forces a judicial foreclosure to occur on the property. The lien removes the property from the owner’s sole possession, sold and the profits from the sale return to the creditors with first priority going to satisfy the mechanics lien. This is a better option than a lawsuit as contractor has the evidence of purchasing materials and completing service in or on the property. To illustrate, if the building has electricity or has the ability to use electricity, it provides evidence that the electrician completed his part of the contract. The electrician has satisfied the requirements necessary to file a lien against the property. A lien does not involve the debating of the issues in the court with other counter-suits and accusations towards the contractor as a method of shifting blame (Lawyers Monthly, 2). However, this federal law only applies to non-governmental contracts; it does not apply to contracts from the government (Brendel, Barrette, & El-Riachi). One question that arises when discussing the non-payment to a sub-contractor is whether the owner or contractor handling the construction is holding payment for poor quality workmanship or no future issue arises in the construction. The contract should address how the contractor and sub-contractors handle these types of situations including fixing any problems that arise within a specified and reasonable period. This is where the courts and arbitration apply for both parties to resolve the differences. However, a mechanics lien addresses the issue of failure to pay through ‘no fault’ of the sub-contractor. In the UAE, contractors seeking relief in a non-payment situation, working on non-government contracts begin the lien process by filing a lien against the entire project. The lien type is a priority lien, which gives the process a sense of urgency requiring immediate action. The lien filed against only the contractor by a sub-contractor limits their ability to obtain full restitution as the owner or owners may control the funding. To file against the entire project opens up the responsibility of repayment to everyone involved. The contractors may not have access to all the funds necessary to pay the sub-contractors as the owners of the property may hold the funds for a number of reasons. The two main reasons, the owners hold the money until the last moment often referred to as ‘tight-fisted’ or they do not have all the funds available to them for a number of explanations. The mechanics lien considers this allowing an opportunity to address this issue with everyone controlling the money and approval process. Opinion Filing for mechanics liens is relatively new and that makes venturing into this unfamiliar area difficult at times. There are many who are not aware of the legal support of this type of action in the federal laws. With the combination of ineffective arbitration and the priority placed in a mechanics lien, the recovery of unpaid money is increased. As mentioned previously, WS Atkins won in arbitration but the other party failed to deliver the money failed by the due date. If WS Atkins used a mechanics lien, it would have forced the payment through judiciary foreclosure. If the owners of Burj Al Arab did not want to lose the property, it would have encouraged quick payment. Criminal Law Law Criminal law is also another branch of the legal system in the United Arab Emirates, which aims to provide protection to the victims of a number of types of crimes (Price & Al Tamimi). One area that required drastic attention is the theft from business through checks that did not have funds in the banks to cover the amount written. The protection of businesses and businesspersons is of paramount importance in the United Arab Emirates given the growth and development the state is experiencing. Possibly one of the most important laws passed in the country, which aimed towards the protection of business interests, is the Bouncing Checks Law. These checks are often termed bounced checks, worthless checks, non-sufficient funds, or insufficient funds. All of these names describe checks written without sufficient funds to cover the cost written for, had the attention of the Highest Court in the country. The growth of Dubai and subsequently, the United Arab Emirates as a business hub is an important phenomenon in recent times to the economy. In this regard, the government must afford protection to those individuals that are engaged in businesses within its borders. A common business practice in the country is to allow undated, or postdated checks used as a security measure for their transactions. Unfortunately, various problems arise due to this practice, including most of the undated or postdated checks bounce because of the lack of funds to cover the amount written (Price & Al Tamimi). When a check returns unpaid, the business faces numerous consequences. This includes their inability to pay their creditors and employees, and paying any fees that occurs because of the returned check, which can add up to a significant amount over time. In this respect, it has become of paramount importance to adopt stringent rules in order to prevent bouncing checks and at the same time, prevent fraud, which could endanger further ensuring growth and stability in the country (Price & Al Tamimi). The problem becomes even more of an issue when foreigners in the UAE write a check and leave the country before the business owner cashes the check. If the money is not available to cover the cost of the check, the business owner can do little even with such protection the law affords them. Yet, as the example of Amber Allen, the law was able to convict her for writing a worthless check. Unfortunately, if a considerable time passes between the time the business owner received the check and subsequently cashed it, the foreigner could be out of the country. Without a doubt, it is easier for foreigners to evade responsibility or liability for the worthless checks that they issue in the United Arab Emirates by simply leaving its jurisdiction and returning to their home countries (Price & Al Tamimi). As a result, there is a greater chance of fraud on their part, which in turn could negatively affect the businesses in Dubai. Summary Under the Bouncing Checks law, the issuance of a bounced check is a criminal offense regardless of one’s intent. The same has been the subject of a controversy recently, which posed serious repercussions for British Citizens in the United Arab Emirates. The case involved Amanda Allen, a British expatriate who bought a property in Abu Dhabi (Ratcliffe). In this case, Allen received a loan from a local bank in May of 2008 (Price & Al Tamimi). To secure the transaction, she signed an undated check. Unfortunately, she defaulted on the loan and the check subsequently bounced. Judgment The ruling was to sentence Amanda Allen to three years of imprisonment. The United Arab Emirates Court held that undated or postdated checks, which the UAE businesses commonly use in the country as security for most transactions must comply with the law on Bouncing Checks. Through this law, once a check bounces, the situation becomes a criminal offense rather than civil whether or not the accused exhibits criminal intent with respect to the same (Price & Al Tamimi). This means, if at the time of writing the check, even years prior, the check must have funds to pay for it in the account with or without prior notice of cashing the check. In this context, the ruling of the Court with respect to Amanda Allen is crucial and is an important precedent that requires observation and implementation in the country. The Courts in the United Arab Emirates must continue to effectively prosecute those who issue worthless checks that can damage businesses in the country, most especially if they are foreigners (Price & Al Tamimi). Opinion The problem with worthless checks is the loss that occurs to the business owners and while the worthless check requires restitution, there is another side of this issue one must consider. The question to ask is if it is good business practice to take undated or postdated checks as a manner of securing a business transaction. There is better protection for a business by using secured collateral in a business transaction. Yet this is not the common practice in the types of transactions to have something to secure the intended debt other than an undated or postdated check. The flaw with this philosophy is the individual leaving the check is already stating that he or she may not be able to pay the debt back. However, when one views the use of checks to pay for common items purchased and then consumed, this type of law is beneficial and provides businesses security in knowing that the theft of the customer receives proper addressing. Sharia Laws The third and last law to consider in the discussion of the legal system in the United Arab Emirates is the Sharia Law. As a Muslim country, the United Arab Emirates adheres to the Sharia Laws (Price & Al Tamimi). As previously mentioned the importance of the Sharia Law is the application of the religious based laws in the absence of codified provisions pertaining to the matter. Generally, the Sharia law is one that governs the relationship between the parties, whether or not they are Muslims. In this regard, the Sharia Law often addresses issues with respect to marriage, family relations, guardianship of minors, and the like (Price & Al Tamimi). However, in a recent decision of the Court in the United Arab Emirates, the judge expounded on the importance of applying Sharia laws even if the same does not involve relations amongst people given the fact that the legal system of the country follows a dual tract. This therefore means that when the laws of the government and the Sharia law function side by side, the judges have the discretion as to which of the two should take precedence (Price & Al Tamimi). Law In a decision made by the Supreme Court about the interpretation of Sharia laws, “judges in a capital murder case must follow Sharia law without exception” (Hassan). However, this ruling may cause court cases to continue indefinitely if the judge follows the letter of the law. The law at question is the Sharia requirement stating “the victim’s relative must accept or decline blood money in court” (Hassan). The problem develops when the courts cannot find the victim’s relatives, the victims does not have relatives, or the relatives are unable to attend court for a number of reasons. It may take a number of years to find the relatives or settle this issue of the blood money. Summary The Supreme Court ruling is an important decision concerning the interpretation of Sharia Laws. The case involved an illegal immigrant identified only as SSS convicted of by the Sharia court and sentenced to death (Hassan). The decision appealed in the appellate court and changed to sentence from death to life imprisonment. The problem in this case identified as neither court followed the requirement contained in the Sharia laws regarding the presence of the victim’s family in the courts for sentencing (Price & Al Tamimi). Judgment Due to the decision, the prosecutors appeared before the Federal Supreme Court, which held that only Sharia laws apply in this case. The Supreme Court decided that the family’s decision about the blood money issue requires consideration in all cases. Until the family makes such a decision, this case remains in continuance. Furthermore, the Supreme Court expounded that in cases of premeditated murder, it is necessary for the cases tried in accordance with Sharia law. The only provision is that the cases must meet the Islamic conditions set forth. In the case of SSS, which the courts duly proved he intentionally killed the victim, meeting the Islamic conditions for trial under Sharia law (Price & Tamimi). Opinion Without a doubt, the case presented to the Supreme Court is an important precedent in the legal system of the United Arab Emirates. Confusion as to which of the various laws that govern in the UAE should take precedence, given the dual track of the legal system remains a problem in the country. Traditionally, the Sharia Law remained confined to only those cases that pertain to relations between people. However, with the promulgation of such decision, it is without a doubt that the Supreme Court defined the proper application of the Sharia Law. The decision of Sharia Laws as the prevailing law in those cases governing murder is of paramount importance to a Muslim nation. A Muslim nation should have the religious teachings governing a case of premeditated murder as it goes against the very nature of Islam. Section 2 The UAE Labor Law Wages Law The provision of gratuities is one contained under the title “wages” in the Labor Law of the United Arab Emirates. According to Article 123 of the labor law, a dismissed employee is entitled to gratuity pay. The interpretation of the labor laws addressed in a recent case, involved the manner of calculation of the gratuity pay. In the said case, the Court of Cassation in the United Arab Emirates has pointed out that the gratuity payment is not a basic payment. Rather, it based on the total salary of the employee. Summary An employee sued his employer for an arbitrary suspension and demanded three months’ salary, his accrued leave allowance and a ticket to his home country as his end of service guaranty. The Court of First Instance rejected the lawsuit and ordered the employer to pay only Dh 54000. The employee dissatisfied with the judgment appealed in the Court of Cassation. Judgment The Court of Cassation rejected the case turning it back to the appellate court to revisit the case. The Court of Cassation ratiocinated that the case deserves another review as the law states gratuity pay stems from the total salary of the employee and not just his or her basic payment (Price & Al Tamimi). Opinion This case is without a doubt, a decision of paramount importance in order to ensure the proper computation with respect to the gratuity payment of the dismissed employees. If the dismissal of the employee is not his fault, he ought to have some manner of surviving until obtaining new employment. The decision to uphold a standard practice in calculating gratuity provides support to the individual no matter what the employer want to do. This is necessary to maintain consistent standards for the employees and employers. Leaves Law The Labor Laws offer numerous types of leaves for employees; one of which is maternity leave. Article 30 of the Labor Law states a woman is entitled to full pay for 45 days after the delivery of her child. Article 30 also further determines an extension of the maternity leave in the event of illness. “A working woman, on the expiry of the maternity leave, may discontinue work without pay for a maximum period of 100 consecutive or intermittent days if such absence is due to illness which does not enable her to resume work. Such illness shall be evidenced by a medical certificate issued by a medical authority attested by the competent health authority or endorsed by such authorities to the effect that the illness resulted from pregnancy or delivery leave provided for in the preceding two paragraphs shall not be computed as part of other leaves” (Khaleejtimes). The law is clear that the paid maternity leave allowed only after the delivery. This is not clear if there are considerations regarding poor health of the mother prior to delivery causing the doctor to order bed rest. Summary A recent case involving a pregnant woman who was nearing her eighth month of pregnancy where travel is restricted for the health of the mother and baby brought questions of whether she could claim maternity leave prior to the delivery. She held an immigrant Canadian card and wanted to deliver her baby in Canada. She asked her employer previously and was still waiting for the answer to the question as her pregnancy was progressing. Judgment The court held that such a request, not confined to a strict 45-day rule, as the management could either increase or decrease the time. This provides flexibility in the employers decision based on the condition of the employee and the workplace needs. Opinion There are few situations involving a medical issue that can follow exact rules of law. Doctors are unable to determine which mother to be will have an easy pregnancy or those who will have complications before birth. There are no guarantees during delivery and immediately afterwards that the mother and child will be healthy. In fact, many employers do not wish to have an employee close to her due date working because of the risk of early delivery or delivery in the work place. Expectant women cannot be expected to fulfill their duties prior to their delivery date and immediately after the birth. There must be some flexibility in these situations where it is fair to both the employee and the employer. With the current laws, maternity leaves are crucial to afford full protection to labor. Conclusion The legal system in the United Arab Emirates receives influence through three distinct areas: Civil law, Criminal law, and Sharia law. Of these three areas, Civil and Criminal laws subjected to regular courts while Sharia is a separate court system, yet all three areas generally function simultaneously with one another. Recent court decisions in the UAE demonstrated Sharia Law takes precedence over Civil and Criminal Law when codified laws cannot supply missing provisions. Judges also find it necessary to decide which, Sharia law, Civil, or Criminal law shall govern. This decision based on the judge’s discretion because of the dual nature of the legal system in the country can vary from case to case even if similar facts presented linking the cases together. This is a concern in each of the areas of law as demonstrated throughout this paper. As more decisions come from the Supreme Court, there will be significant clarification of the issue of which law to use providing a more consistent application throughout all the courts in the state. Works Cited Al Tammi and Company. United Arab Emirates Construction Law and Dispute Resolution. DocStoc. 2011 Web. 6 January 2013. Beamish, Gary. Welcome Cices 20 February 2012 – Dubai UAE Constitution Contracts Formation. Cices. 20 February 2012. Web. 6 January 2013. Brendel Neal R., Amy L. Barrette, and Wadih El-Riachi. “The Availability in the UAE of Liens to Secure Payment under Construction Contracts.” Arab Law Quarterly 24 (2010): 309-317. Print. Coburn, Thompson. Managing Mechanics’ Liens. Nuwire Investor. 27 September 2012. Web. 6 January 2013. Delmar-Morgan, Alex. Legal firm sees sharp rise in UAE contract disputes. Arabian Business. 25 May 2009. Web. 6 January 2013. Hassan, Hassan. Murder Trials must follow Sharia Law, Supreme Court Rules. The National. 16 July 2010. Web. 7 January 2013. Khaleejtimes. Maternity Leave. Khaleejtimes. 14 May 2012. Web. 7 January 2013. Price, Richard and Essam Al Tamimi, E. United Arab Emirates Legal System. California: Sage Publications. 2005. Print. Ratcliffe, Verity. Amanda Allen bounced cheque case could affect UAE expats. The Telegraph. 07 Aug 2012. Web. 7 January 2013. Saher, Shoeb. United Arab Emirates: End of Service Gratuity under the UAE Labour Law: Time to be more practical. Mondag. 8 April 2012. Web. 7 January 2013. Read More