What are multi-tiered clauses for dispute resolutions?

Uncategorized

Multi-tiered clauses are dispute resolution clauses which includes a escalating-step system to resolve differences, which starts with a number of alternative dispute resolution steps (negotiation between senior managers, mediation, dispute boards, etc.), and ends with arbitration if the first alternative steps result unsuccessfully. In my experience, these clauses work as a filter only letting the most entrenched disputes go through to arbitration. On their nature, much has been discussed as to whether they are genuine arbitration agreements or something different. It is increasingly common in complex commercial contracts to see “multi-tier” ADR clauses.
It is important that these clauses are carefully considered. Clauses that simply say, for example, the parties are to engage in “good faith negotiations” before proceeding to arbitration, leave a number of issues open.

What to consider while drafting the clauses?

How long can the parties take in the negotiating process? If negotiations are futile, how does a party escalate the matter to the next level of ADR? When has a party not acted in “good faith” in a negotiation process? Generally in drafting, it is preferable to:

1. Specify how the ADR process is initiated. For example, it may be initiated by one party serving the other party with a notice setting out brief details of the dispute.

2. Set time limits on the various stages of the ADR process.
For example, the clause could provide that in the negotiation stage of ADR, the parties must make representatives with authority to settle the dispute available for the purpose of meeting in an effort to resolve the dispute and that such meeting must take place within 30 days of service of a notice of dispute. If the negotiation turns out to be fruitful and not enough time has been allocated, the parties can always agree to extend the time period. By setting a time limit, the parties eliminate the risk that either party will cause undue delay by declining to participate in the negotiation.

3. Spell out how a dispute is moved from one stage of the ADR process to the next.
This should be triggered by an indisputable event, e.g. expiry of a time period. In the example above, if the dispute is not settled by the authorized representatives in the 30 days, make it clear that the dispute shall proceed to be determined in accordance with the remainder of the ADR clause. Avoid the use of terms which may cause a dispute in themselves. For example, a requirement that negotiations be conducted in good faith adds nothing, other than an invitation to a dispute about whether one party acted in good faith.

4. Avoid the use of terms which may cause a dispute in themselves. For example, a requirement that negotiations be conducted in good faith adds nothing, other than an invitation to a dispute about whether one party acted in good faith.

Among the key issues that parties to an arbitration clause should consider is the place of the hearing for domestic contracts, and the place of arbitration for international contracts (i.e., contracts where the parties reside in different jurisdictions). Where the contract is a wholly domestic one, the location for the hearing may not be an issue if both parties reside in, say, DIFC (the parties would invariably designate the DIFC as the place for the hearing). However, if the parties reside in different cities and the contract does not designate a hearing location, unless the parties can agree, this will be up to the arbitrator to decide (adding time and cost to the process while this issue is being determined). The issue is very simply avoided by, for example, a clause specifying: “The arbitration will be held in DIFC, United Arab Emirates.”

It is worthwhile to mention effective ADR clauses mandate ADR (whether it is negotiation, mediation, expert determination, arbitration or a combination of all of them (i.e. a multi-tier clause). Ineffective ADR clauses unintentionally provide an option of ADR or litigation, for example providing that any disputes which cannot be settled by negotiation “may” be submitted to arbitration (not “must” or “shall”). Another error I have experienced is for a contract to contain, in successive clauses, both a consent to the jurisdiction of certain courts and a consent to arbitration, leaving it uncertain whether the parties intended arbitration to be the exclusive dispute resolution process. These errors are avoided by careful drafting and word choice.

Who will get the custody of the child as per the UAE law?

Family Law

A breakdown of marriage is always a sensitive matter. It can be even more complicated if children are involved.
So if this happens, who will get the custody of the children as per the UAE law?
With the experience of working with many families for over the years, it is apparent that child custody is one the hardest and emotional thing that the couple’s faces when they are decide to end a marriage.
When people get into the conflict of the custody dispute or a nasty divorce, they tend to choose hatred which can lead to worsening the situation and increases conflict. If they choose to deal with it with hatred, the problem cannot be resolved.
This is the time when to decide to consult with a lawyer to get to know their rights and entitlements for custody.
When I start mediation to reconcile between the parties, my aim is not to come out of that meeting to win but to but to hear from the parties and to decrease their conflict as much as possible. My first advice to them is not to split the children and secondly to look after their best interests. 90% percent of the cases are resolved amicably but we have also a number of cases where the parties choose not to agree to write the settlement agreement or does not work due to other reasons such as a party being outside of the country. In this article, I want to share a few things I know:-

1. First of all, UAE courts are accepting the cases and application from citizens and residents or if the marriage has been registered here in UAE courts.
2. We have a Muslim and non-Muslim category for family case registrations.
3. The parties can agree if they do not want the Sharia ’a law to apply and insist to proceed according their home country law. While if the father has a different nationality than the mother, in this case the court can decide whether Sharia law will apply or the law of the father’s home country.
4. In accordance to Sharia’a law, the mother shall have the right of her children‘s custody in case of dispute over the custody unless the judge decided otherwise for the child’s interest. The guardianship over the minor children is granted to the Father which shall include safekeeping, managing and investing his property. It shall be the duty of the child’s father to handle his affairs, correct, guide and educate him.
5. As per Article no. 146 of Federal Law No. (28) of 2005 On Personal Status; the right of the child’s custody shall be awarded to his mother, then to mahram women, provided that maternal relatives shall have precedence over paternal relatives, that the closest relative on the two sides shall be considered except the father in the following order, and that the judge shall consider the child’s interest when he decide his right;

a) The mother.

b) The father.

c) The grandmother, from the mother’s side, and upwards.

d) The grandmother, from the father’s side and upwards.

e) The sisters, giving preference to the full sister, then to the stepsister from the mother’s side, then the stepsister from the father’s side.

f) The daughter of the full sister.

g) The daughter of the stepsister from the mother’s side.

h) The aunts from the mother’s side, in the same order as the sisters.

i) The daughter of the stepsister from the father’s side.

j) The daughters of the brother in the same order as the sisters.

k) The aunts from the father’s side, in the above order.

l) The mother’s aunts from the maternal side, in the above order.

m) The father’s aunts from the maternal side, in the above order.

n) The mother’s aunts from the paternal side, in the above order.

o) The father’s aunts from the paternal side, in the above order.
6. If parents are not exist and the persons entitle to custody reject it, the judge shall choose a suitable person from the child’s relatives or others or a qualified institution for such purpose.

For any further information, please feel free to comment here in below or email us.
N.rahmannejadi@araalaw.com

What does the law say about late rent payment?

Civil Law

While tenants are struggling to pay their rent during the COVID-19 pandemic, the landlord’s rights are still secured to claim the rent cheques from the tenants unless the landrod agree to defer the rent temporarily.

In the current situation, it is genuinely encouraging to be witness many developers taking this situation into consideration and considering their commercial profit secondary to their humanitarian concern. They have provided the tenants with more flexibility for their payments. For example, a 2-month grace period which can be further extended or to split the payments into more separate PDC.
Properties investment (PI)- a Dubai Investments joint-venture company engaged in the investment and development of real estate – has announced a 3-month rent relief for all retailers within ‘The Market’ – a dedicated retail avenue, located in the Green Community, Dubai Investments Park.

Meanwhile Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and Chairman of the Dubai Judicial Council, temporarily suspended all eviction judgements related to residential and commercial facilities in the UAE during March and April, according to a Wednesday 25th of March statement from the Dubai Media Office. The directive also stopped all “imprisonment judgements” linked to rental disputes. However, the ruling does not apply to abandoned homes.

With that said, “While landlords have a robust list of rights to protect them if a tenant cannot pay their rent, under rental laws facilitated by the Real Estate Regulatory Agency,
“their priorities right now are to the well-being and safeguarding of tenants”, the Dubai land department said.

The situation changes by the hours so it’s best to keep a close eye on any development and updates on our page or website.

Validity of the online signature on contracts in courts or legal cases.

General UAE Law

In accordance to the Article (17) of Federal Law No. (1) of 2006 On Electronic Commerce and Transactions;

1. A signature shall be treated as a Secure Electronic Signature if, through the application of a prescribed Secure Authentication Procedure or a commercially reasonable Secure Authentication Procedure agreed to by the parties involved, it can be verified that an Electronic Signature was, at the time it was made:
a) unique to the person using it;
b) capable of identifying such person;
c) was, at the time of signing, under the sole control of the Signatory in terms of the creation data and the means used; and
d) linked to the Electronic Record to which it relates in a manner which provides reliable assurance as to the integrity of the signature such that if the record was changed the Electronic Signature would be invalidated.

2. Absent proof to the contrary, reliance on a Secure Electronic Signature is deemed reasonable.

In addition, It is also important to consider the following:
1. The jurisdiction by which the agreement or document will need to be recognized and/or enforced. If another jurisdiction than the UAE is involved, it is important to consider their own laws regarding e-signatures;
2. Where an e-signature is being relied on (other than pursuant to Article 17 of the E-Commerce Law), whether such reliance would be considered reasonable by the courts (factors the courts would consider are set out above); and
3. Whether the type of document with respect to which the e-signature is used may be signed by way of e-signature under the e-commerce law.

The use of e-signatures also imposes additional duties on a signer, set out under Article 19 of Federal Law No.1 of 2006. There may be repercussions if these duties are not fulfilled. These duties include notifying concerned persons, without any unjustifiable delay, in the instance of finding out the signer’s signature tool was or may have been exposed to safety risks based on circumstances or facts made known to him/her.

As long as the requirements set out above are fulfilled, there should be no significant risk that the UAE courts not consider the e-signatures valid and the Signatory shall bear the legal consequences.

Salary Cuts Aimed Corona-virus Outbreak

Employment Law

In accordance to the Ministerial resolution No. (279) of 2020 on Employment Stability in privet sector during the period of Application of Precautionary Measures to curb the spread of Novel Coronavirus ; All the establishments affected by such precautionary measure and wishing to recognize their work shall progressively with their actions. In agreement with non-national workers as follows:
1. Implement remote working system.
2. Grant paid leave,
3. Grant unpaid leave.
4. Temporary salary reduction during the referenced period.
5. Permanent salary reduction.
Establishment wishing to temporally reduce the salaries of non-national workers during the said period shall;

1. Make a temporarily supplement to the employment contract between the parties thereto, using the template attached hereto, provided that the same expires by the expiry of its term or validity period of this Resolution, whichever is earlier.
2. Renew the supplement mentioned in paragraph ((1) of this article by agreement of both parties
3. Execute the supplement mentioned in paragraph (1) of this article in two copies, one copy for each party, provided that the employer provides such supplement to the Ministry, when so required.