Timelines And Procedures For Real Estate Contract Dispute Resolution In Dubai

INTRODUCTION

Dubai’s real estate market has developed into one of the fastest growing and most investment-friendly markets in the Middle East. The Emirate has already developed a robust legal and institutional framework to manage real estate transactions and disputes arising from them. Disputes over off-plan purchases, delays in project completion, non-performance of contractual obligations, and title issues are typical causes of disputes. The resolution of disputes is governed by the UAE Civil Code, Dubai Business Consultant No. 13 of 2008, and the Federal Arbitration Business Consultant, as well as the regulatory authorities including the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA).

MEDIATION AND THE AMICABLE SETTLEMENT CENTRE’S FUNCTIONS

Parties are encouraged to attempt amicable resolution of their disputes prior to taking formal legal action. The parties’ first line of formal intervention is usually through the Amicable Settlement Centre (ASC) which is established under the DLD whereby the ASC acts as a quasi- judicial mediation forum intended to settle disputes as opposed to lengthy litigation.

Mediation is normally completed within 15 business days; however, the time required may last longer depending on the complexities of the case. If the parties are able to agree on a resolution, they enter into a binding agreement which is enforced via Dubai Courts. If the mediation is unsuccessful, the parties may elect to pursue litigation or arbitration, as determined by the existing contract.

LITIGATION THROUGH THE COURTS IN DUBAI

If mediation fails or is abandoned because it is either high-value or urgent, the parties will resolve their dispute through the Dubai Courts. If the sale and purchase agreement (SPA) does not contain an arbitration clause, any dispute will be resolved by the civil courts.

Litigation begins with a Statement of Claim, which includes the SPA, receipts for payment, and various correspondence. A party must first go to the Centre for Amicable Settlement of Disputes unless a certain provision excludes a party, if the amount claimed is less than AED 500,000.

For litigation, the timeline is typically as follows

• There is a preliminary hearing, which takes place within 2–3 weeks.
• There then may be several written pleadings and hearing for the exchange of evidence.
• The court usually provides a judgement within 4 to 6 months for a dispute, depending on the complicated nature.
• The parties then have 30 days to appeal to the Court of Appeal.
• The final judgment may be enforced through the Memorandum of the Execution Court in 15 -30 days.

Litigation is public and may take a long time, especially if appeals are carried on in the Cassation of the Court of Cassation, which is the highest court in Dubai.

ARBITRATION AS THE FIRST CHOICE

If an arbitration clause is included in the SPA, disputes will need to be resolved through arbitration. Arbitration is generally a quicker, confidential process where parties can exercise agency to select tribunal members with subject matter expertise. Institutions receiving the most support are Dubai International Arbitration Centre (DIAC) and the DIFC-LCIA.

The arbitration process will usually include the following:

• Filing a notice of arbitration and appropriate filing of notice and subsequent response within the applicable time frame.
• Appointment of tribunal/members (generally 2–4 weeks).
• Hearings and submissions over a minimum of 6 months, to a maximum of 12 months, unless expedited procedures apply.
• The award made by the tribunal will always be final and binding, open to challenge very limited on procedural grounds only.
• Enforcement will be through UAE courts pursuant to the Federal Arbitration Business Consultant (Business Consultant No 6 of 2018).

Recent changes to DIAC rules (2022) modernized arbitration procedures by including electronic submissions, emergency arbitration, and joinder of parties, in a process that enhances efficiency in resolving real estate disputes.

THE REGULATORY ROLE OF DLD AND RERA.

Apart from dispute resolution, the Dubai Land Department and its regulatory body, the Real Estate Regulatory Agency (RERA), play an important role in overseeing compliance and intervention when there has been a breach of contract. RERA manages important regulations regarding the use of escrow accounts, timely completion of projects, and developer obligations. In the instance of developers who fail to complete projects,

Decree No. 19 of 2020 allows DLD to liquidate the assets and pay any proceeds to impacted buyers, protecting their interests as investors. RERA can also take administrative action like issuing a warning, suspending sales, or cancelling projects. These remedies can sometimes reduce or eliminate the need for litigation, and with RERA’s intervention, there is a compliance issue rather than a pure contract dispute.

TIMELINES AND PROCEDURALLY RELATED DEADLINES

UAE business consultant will typically provide a ten-year limitation period and for contractual disputes in the real estate context the litigant must be cognizant of procedural deadlines, particularly with respect to any notices, responses, and counterclaims. Failure to respond to a court summons or delay in commencing your legal proceedings can with dire consequences including a negative judgment or loss of your rights, and in cannot be resumed later.

 In terms of arbitration, parties must be mindful of the timelines within the chosen institutional rules or the arbitration agreement before the tribunal convenes. If a party obtains a judgment or arbitral award, or resolved an outstanding legal matter in final form (whatever formulation, a final order), timely enforcement of the awarded result in the Execution Court is mandated to avoid being derailed by procedural or timing obstacles.

FOREIGN INVESTOR CONSIDERATIONS

Dubai’s real estate sector attracts significant foreign investment so foreign parties must necessarily be aware of specific procedural requirements at the start that will affect the end results. All filings may only be submitted in Arabic, and all foreign documents, including contracts, identification, or power of attorney on behalf of a foreign party must also be translated and notarized on a legally recognized basis.

 It is also important that foreign parties obtain proper registration of properties bewteen parties in the Oqood system (the interim real estate registry in Dubai), as non-compliance can limit the foreign parties enforceability in disputes. Also, in any proceedings, foreign litigants will be required to engage the services of a locally licensed advocate to represent them – whether voluntarily and at their own costs for legal representation or otherwise via Court order.

CONCLUSION

Dubai offers a holistic and flexible approach to the dispute resolution of real estate contracts. Through mediation, litigation or arbitration, there are options available to remove the ambiguity of the contractual parties, as they have access to legally well-developed and institutionally supported adjudication options available to them. It is important to take the  prompt and informed action  knowing the implications of the clauses in contracts, meeting the requirements of the regulatory regime, initiating any claim within the respective limitation period. The real estate sector continues to evolve as well. Dubai’s dispute resolution structure adapts and advances along with it, resolving disputes in a clearer, speedier and more investor-friendly way at every stage of resolution.