United Arab Emirates

Committee for the Unification of Federal and Local Judicial Principles

Session of Thursday, December 21, 2023

Presided over by Judge / Mohammed bin Hamad Al Badi "President of the Court"

And the membership of Judges / Shihab Abdul Rahman Al Hammadi, Mohammed Abdul Rahman Al Tunaiji, Abdulaziz Yaqoubi, Al Mubarak Al Awad Hassan, Saad Mohammed Zuwail, Omar Younis Jarour, Ahmed Mustafa Abu Zaid, and Esmat Bakhit Abu Zaid.

Request No. (2) of 2023

"Committee for the Unification of Federal and Local Judicial Principles"

(1-5) Organization of judicial relations between federal and local judicial authorities "Committee for the Unification of Federal and Local Judicial Principles: Competencies of the Committee." Criminal procedures "Litigation before courts: Territorial jurisdiction of courts: Impermissibility of agreeing to violate it." Public order "Rules of territorial jurisdiction for courts are of public order."

(1) Accepting a request to resolve a contradiction between two final judicial principles on a single issue. Its basis. That one of the principles be issued by one of the country's high courts, whatever its name, and the other be issued by another of the same courts. Its reason: For the two principles to conflict in a way that makes it impossible to favor one over the other, which requires the Unification Committee to resolve the conflict. Issuance of the two principles by a single judicial body. Its effect. The basis for accepting the request is negated. Its reason and foundation.

(2) Issuance of a judgment from the Dubai Court of Cassation and another from the Federal Supreme Court, and what agrees with it from a judgment of the Ras Al Khaimah Court of Cassation, containing conflicting judicial principles on a single issue related to the permissibility or impermissibility of individuals agreeing to violate the rules of territorial jurisdiction. The result is the establishment of jurisdiction for the Committee for the Unification of Federal and Local Judicial Principles to consider the Attorney General's request regarding this conflict.

(3) The judiciary in each emirate is a judicial body independent of the judicial bodies in the other emirates. Its implication. Each judicial body is territorially competent within its geographical scope, and it is not permissible to agree to violate it. This relates to public order, which the court must rule on of its own accord. The exception. That the Constitution entrusts the federal judiciary with specific matters. Its basis. Article 104 of the Constitution.

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(2)

Committee for the Unification of Federal and Local Judicial Principles

(4) Jurisdiction to hear lawsuits between federal courts and local courts. Territorial jurisdiction that cannot be agreed upon to be violated. Its implication. An agreement on the jurisdiction of a specific court according to the text of Article 33/5 of the Civil Procedure Law is not absolute, as it is restricted by the territorial jurisdiction related to public order. Arguing otherwise. Its effect.

(5) Agreement to violate the rules of territorial jurisdiction of courts that belong to a judicial body other than the judicial body to which the agreed-upon court belongs in civil and commercial matters. Impermissible. Its implication. Overturning the principle established by the Federal Supreme Court and the Ras Al Khaimah Court of Cassation permitting it, and affirming the principle concluded by the Dubai Court of Cassation of its impermissibility. Its reason. The rules of territorial jurisdiction are related to public order.

1- Whereas the Committee initially notes that the text of Article (15) of Federal Law No. (10) of 2019 concerning the organization of judicial relations between the federal and local judicial authorities states that "The Committee is competent to unify conflicting judicial principles issued by two or more of the country's high courts, and is also competent to consider requests to overturn a principle it has previously established in accordance with the procedures specified in Article 16 of this law." It is also established by the text of Article (16) that "Requests for the unification of judicial principles shall be submitted to the Committee with a reasoned report from any of the heads of the high courts in the country, or the Federal Attorney General or local attorneys general, either automatically or based on a request submitted to them by federal or local government entities....", which means that the basis for accepting a request to resolve a conflict between two final judicial principles on a single issue is that one of the principles must be issued by one of the country's high courts, whatever its name, whether a court of cassation, review, or supreme court, and the other issued by another of the same courts or more, such that the two principles have clashed at the time of submitting the request in a way that makes it impossible to favor one over the other and for them to be enforced together, which requires the Committee to resolve this conflict by weighing the principles or reconciling them in terms of the legal effect on disputes related to the conflicting principles. The basis for accepting the request is negated if the two principles are issued by a single judicial body, in which case the high court of that body alone has the authority to resolve the conflict in accordance with the procedural rules applicable in its jurisdiction, whereby that court undertakes to affirm one of the conflicting principles or to overturn an established principle and issue another principle that contradicts it.

2- Whereas this was the case, and it is established from the judgment issued by the Dubai Court of Cassation in Appeal No. 213 of 2017 Commercial, the judgment issued by the Federal Supreme Court in Appeal No. 670 of 27 Q Commercial, and the judgment issued in Appeal No. 16 of 2023 Commercial Cassation Ras Al Khaimah, that these judgments contained conflicting judicial principles regarding a single issue as explained in the preceding context - the permissibility or impermissibility of the litigants agreeing on...

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(3)

Committee for the Unification of Federal and Local Judicial Principles

violating the rules of territorial jurisdiction by assigning it to a specific court - which thus confers jurisdiction upon the Committee for the Unification of Federal and Local Judicial Principles to consider the Attorney General's request regarding this conflict.

3- It is established that the text in Article 104 of the Constitution, stating that "The local judicial bodies in each emirate shall handle all judicial matters not assigned to the federal judiciary by virtue of the provisions of this Constitution," indicates that each emirate has its own judiciary, independent of the other emirates, except for judicial matters assigned to the federal judiciary by the provisions of the Constitution. Therefore, the jurisdiction of each of these judicial bodies is limited to a specific geographical area, which is the territory of the emirate where it exercises its authority, and it does not extend beyond it to other emirates. Thus, the judiciary in each emirate constitutes a judicial body independent from the judiciary in the rest of the emirates. Since the determination of jurisdiction in this manner is derived from the Constitution, it is considered a matter of public order, and it is not permissible to agree to violate it, and the court must rule on it of its own accord.

4- It was established by the judiciary that the distribution of jurisdiction to hear lawsuits between federal and local courts, and those independent in their judiciary from the federal judiciary, is a territorial jurisdiction that is not permissible for individuals to agree to violate its rules as it relates to public order. The application of the text of Article 33/5 of the Federal Decree-Law No. 42 of 2022 issuing the Civil Procedure Law regarding agreement on local jurisdiction is not absolute, but rather restricted by observing the territorial jurisdiction related to public order. To argue otherwise would mean dragging litigants to an incompetent court and disrupting the distribution of judiciary among the various emirates in a manner different from that prescribed by the Constitution, and burdening courts with cases that are not within their jurisdiction.

5- Since this is the case, and the issue presented does not admit more than one solution, which is the matter that the Committee sees fit to overturn the principle established by the Federal Supreme Court in Appeal No. 670 of 27 Q Commercial and the principle established by the Ras Al Khaimah Court of Cassation in Appeal No. 16 of 2023 Commercial Cassation Ras Al Khaimah, which stipulated the necessity of applying the agreement on jurisdiction even if the elements of jurisdiction are available to another court belonging to a different judicial body than the one to which the agreed-upon court belongs, and to affirm the legal principle concluded by the judgment issued by the Dubai Court of Cassation in Appeal No. 213 of 2017 Commercial, which states that as long as the subject matter of the dispute is civil or commercial, it is not permissible to agree to violate the territorial jurisdiction of courts that are subject to a judicial body independent of the federal judiciary, as the jurisdiction here is related to public order.

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(4)

Committee for the Unification of Federal and Local Judicial Principles

The Committee

Whereas the facts, as they appear from the request and all other documents, are that the plaintiff company "... D.M.M." filed lawsuit No. 1020 of 2016, Dubai Commercial Full Court, against the defendant company "... D.M.M." seeking a judgment appointing an arbitrator according to the rules of the Dubai International Arbitration Centre to resolve the dispute between them. This was based on the grounds that it had contracted with the defendant as a subcontractor for the fabrication and installation of aluminum and glass works for a project (building ......) and that it had completed all the agreed-upon works, but the defendant did not pay its dues. Since the contract between them included an arbitration clause, it filed the lawsuit. The court ruled that it lacked territorial jurisdiction to hear the case. The plaintiff appealed this judgment in appeal No. 1571 of 2016 Commercial, dated 11/1/2017. The court ruled to overturn the appealed judgment and decreed anew the jurisdiction of the Dubai court to hear the case and returned the papers to the court of first instance to decide on the merits. The defendant challenged this judgment before the Dubai Court of Cassation under No. 213 of 2017 Commercial Appeal. In the session of 21/5/2017, the Dubai Court of Cassation ruled to dismiss the appeal and ordered the appellant to pay the costs and a sum of one thousand dirhams for lawyer's fees, and confiscated the security deposit. The court based its decision on the principle established in Article 104 of the Constitution that "The local judicial bodies in each emirate shall handle all judicial matters not assigned to the federal judiciary by virtue of the provisions of this Constitution," which means that each emirate has its own judiciary, independent of the other emirates, regarding matters beyond those assigned to the federal judiciary by the provisions of the Constitution. Therefore, individuals cannot agree to violate the rules of this jurisdiction because it relates to public order. It is also established, according to Article 31/3 of the Civil Procedure Law - corresponding to Article 33 of the current law - that jurisdiction in commercial matters lies with the court in whose circuit the defendant's domicile is located, or the court where the agreement was made or wholly or partially performed, or the court where the agreement must be performed. Whereas this was the case, and it was clear from the facts that the respondent (the defendant) is in the Emirate of Abu Dhabi.

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(5)

Committee for the Unification of Federal and Local Judicial Principles

submitted a bid for an aluminum contracting job and the bid was awarded to the appellant (the plaintiff) via fax at its headquarters in Dubai. The appellant then sent its offer by fax to the respondent, who replied with its acceptance of the offer submitted by the appellant and sent its acceptance via fax, which the appellant received at its headquarters in the Emirate of Dubai. It is thus clear that there was an offer issued by the appellant associated with the respondent's acceptance, and the appellant became aware of this acceptance at its headquarters in the Emirate of Dubai via fax. Therefore, the contract was concluded in the Emirate of Dubai, "the place where the appellant learned of the acceptance," which complies with the text of Article 31 of the Civil Procedure Law. The plaintiff has the choice to file its lawsuit before the court in whose circuit the defendant is domiciled, or the court where the agreement was made or wholly or partially performed, or the court where the agreement must be performed. Since the subject matter of the dispute is commercial, the Dubai courts are territorially competent to hear the case. This is not undermined by the respondent's defense that it agreed with the appellant for the jurisdiction to be with the Abu Dhabi courts, because the judiciary in the Emirate of Dubai constitutes a judicial body independent of the federal judiciary and its courts are bound by the limits of its jurisdiction related to public order, and it is not permissible to agree to violate it as it is a territorial jurisdiction.

Whereas the plaintiff filed lawsuit No. 120 of 2005, Al Ain Civil Partial, against the defendant, seeking a judgment obliging him to pay him an amount of 32,000 dirhams, on the grounds that he had given him this amount to spend on purchasing supplies for the company, but he did not do so and did not return the amount. The defendant pleaded the incompetence of the Al Ain court due to an agreement assigning jurisdiction to the Dubai court for any dispute arising between the partners. The court of first instance ruled to reject this plea and, on the merits, to oblige the defendant to pay the claimed amount. The defendant appealed the judgment in appeal No. 292 of 2005, and the court ruled to overturn the appealed judgment and declared the issuing court locally incompetent to hear the case. The plaintiff challenged this by cassation before the Federal Supreme Court in appeal No. 670 of 27 Q. In the session of 16/1/2007, the Federal Supreme Court, in the advisory chamber, in appeal No. 670 of 27 Q, ruled to reject the appeal. It based its decision on the text of Article 31 of the Civil Procedure Law - corresponding to Article 33 of the current law - which, after defining the elements of local jurisdiction for courts, permitted in its fifth paragraph for litigants to agree in advance to specify the jurisdiction of a particular court to hear a dispute in cases other than real property actions, possession actions, inheritance actions, and ancillary actions that must follow the original action.

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(6)

Committee for the Unification of Federal and Local Judicial Principles

The implication of this is that, except for these exceptions - where the mandatory jurisdictional rules cannot be violated - whenever the parties agree to assign local jurisdiction to a specific court and both have the capacity to contract and freedom of will, it is not permissible for one of them, by their sole will, to violate that agreement and drag their opponent to litigate before another court, even if the general rules of jurisdiction would grant it jurisdiction. This is in application of the binding effect of the written agreement. The appellant does not dispute that the dispute - the subject of the lawsuit - arose from the partnership that connects him with the respondent and that the partnership contract included a clause stipulating the assignment of jurisdiction to the Dubai court in the event of any dispute between the partners. Thus, the challenged judgment, when it ruled that the Al Ain court, before which the lawsuit was filed, lacked jurisdiction, in application of the binding effect of the written agreement, has correctly applied the law, considering the will of the two parties as expressed in the clause of the said partnership contract.

Also, the plaintiff filed lawsuit No. 103 of 2022 Ras Al Khaimah, litigating against the defendants, and requested in its conclusion a judgment appointing an accounting expert to go to the defendants' headquarters to review their accounting records, commercial books, and annual balance sheets, and to state the balances of their bank accounts, the change in the ownership of their shares, and determine their annual profits from the date of their registration in the free zone in Ras Al Khaimah until the date of filing the expert's report. The first defendant company pleaded the incompetence of the Ras Al Khaimah courts to hear the case and the jurisdiction of the Dubai courts in accordance with clause 28/2 of the contract concluded between them. The court of first instance ruled its local incompetence to hear the case. The plaintiff appealed this judgment before the Ras Al Khaimah Court of Appeal in appeal No. 54 of 2023, and on 17/3/2023, the court ruled to overturn the appealed judgment and established the jurisdiction of the Ras Al Khaimah Court of First Instance to hear the case and returned it for a decision. The first defendant company challenged this judgment by way of cassation, and the Court of Cassation heard the appeal in the advisory chamber. In the session of 18/7/2023, the Ras Al Khaimah Court of Cassation in appeal No. 16 of 2023 - Commercial Cassation - ruled to quash the challenged judgment and, on the merits of appeal No. 54 of 2023 Commercial Ras Al Khaimah, to reject it and uphold the appealed judgment. It based its decision on the fact that the papers were devoid of any evidence of a management center...

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(7)

Committee for the Unification of Federal and Local Judicial Principles

for the appellant company in the Emirate of Ras Al Khaimah or a branch of its activity therein for the execution of a specific legal act and the subject of the dispute relates to this act, and it was established from the agreement concluded between the parties on 1/7/2016 that the appellant had taken the headquarters of the second respondent, located in the Emirate of Dubai, as its headquarters, in addition to the parties' agreement in clause 28/2 of the agreement, the subject of the litigation, on the jurisdiction of the courts of the Dubai International Financial Centre to hear any disputes arising from its application, and therefore the courts of the Emirate of Ras Al Khaimah are not territorially competent to hear the case.

Following this conflict between the aforesaid principles, the Federal Attorney General submitted a request to the Committee for the Unification of Federal and Local Judicial Principles on 17/8/2023, registered under No. 2 of 2023 "Committee for the Unification of Principles," requesting in its conclusion a review of the aforementioned conflict.

Whereas the Committee initially notes that Article (15) of Federal Law No. (10) of 2019 concerning the organization of judicial relations between the federal and local judicial authorities states that "The Committee is competent to unify conflicting judicial principles issued by two or more of the country's high courts, and is also competent to consider requests to overturn a principle it has previously established in accordance with the procedures specified in Article 16 of this law." It is also established by Article (16) that "Requests for the unification of judicial principles shall be submitted to the Committee with a reasoned report from any of the heads of the high courts in the country, or the Federal Attorney General or local attorneys general, either automatically or based on a request submitted to them by federal or local government entities....", which means that the basis for accepting a request to resolve a conflict between two final judicial principles on a single issue is that one of the principles must be issued by one of the country's high courts, whatever its name, whether a court of cassation, review, or supreme court, and the other issued by another of the same courts or more, such that the two principles have clashed - at the time of submitting the request - in a way that makes it impossible to favor one over the other and for them to be enforced together, which requires the Committee to resolve this conflict by weighing the principles or reconciling them in terms of the legal effect on disputes related to the conflicting principles. The basis for accepting the request is negated if the two principles are issued by a single judicial body, in which case the high court of that body alone has the authority to resolve the conflict in accordance with the procedural rules applicable in its jurisdiction.

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(8)

Committee for the Unification of Federal and Local Judicial Principles

That court shall undertake to affirm one of the conflicting principles or to overturn an established principle and issue another that contradicts it. Also, the present request is submitted by one who has the authority to submit it (His Excellency the Federal Attorney General), and it came with a reasoned report, and therefore it is formally acceptable.

Whereas this was the case, and it is established from the judgment issued by the Dubai Court of Cassation in Appeal No. 213 of 2017 Commercial, the judgment issued by the Federal Supreme Court in Appeal No. 670 of 27 Q Commercial, and the judgment issued in Appeal No. 16 of 2023 Commercial Cassation Ras Al Khaimah, that these judgments contained conflicting judicial principles on a single issue as explained in the preceding context, which confers jurisdiction upon the Committee for the Unification of Federal and Local Judicial Principles to consider the Federal Attorney General's request regarding this conflict.

Whereas it is established that the text in Article 104 of the Constitution states that "The local judicial bodies in each emirate shall handle all judicial matters not assigned to the federal judiciary by virtue of the provisions of this Constitution." This indicates that each emirate has its own judiciary, independent of the other emirates, except for judicial matters assigned to the federal judiciary by the provisions of the Constitution. Therefore, the jurisdiction of each of these judicial bodies is limited to a specific geographical area, which is the territory of the emirate where it exercises its authority, and it does not extend beyond it to other emirates. Thus, the judiciary in each emirate constitutes a judicial body independent from the judiciary in the rest of the emirates. Since the determination of jurisdiction in this manner is derived from the Constitution, it is considered a matter of public order, and it is not permissible to agree to violate it, and the court must rule on it of its own accord.

It was established by the judiciary that the distribution of jurisdiction to hear lawsuits between federal and local courts, and those independent in their judiciary from the federal judiciary, is a territorial jurisdiction that is not permissible for individuals to agree to violate its rules as it relates to public order. The application of the text of Article 33/5 of the Federal Decree-Law No. 42 of 2022 issuing the Civil Procedure Law regarding agreement on local jurisdiction is not absolute, but rather restricted by observing the territorial jurisdiction related to public order. To argue otherwise would mean dragging litigants to an incompetent court and disrupting the distribution of judiciary between...

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(9)

Committee for the Unification of Federal and Local Judicial Principles

the various emirates in a manner different from that prescribed by the Constitution, and burdening courts with cases that are not within their jurisdiction.

Since this is the case, and the issue presented does not admit more than one solution, which is the matter that the Committee sees fit to overturn the principle established by the Federal Supreme Court in Appeal No. 670 of 27 Q Commercial and the principle established by the Ras Al Khaimah Court of Cassation in Appeal No. 16 of 2023 Commercial Cassation Ras Al Khaimah, which stipulated the necessity of applying the agreement on jurisdiction even if the elements of jurisdiction are available to another court belonging to a different judicial body than the one to which the agreed-upon court belongs, and to affirm the legal principle concluded by the judgment issued by the Dubai Court of Cassation in Appeal No. 213 of 2017 Commercial, which states that as long as the subject matter of the dispute is civil or commercial, it is not permissible to agree to violate the territorial jurisdiction of courts that are subject to a judicial body independent of the federal judiciary, as the jurisdiction here is related to public order.

For these reasons

The Committee unanimously decided in Request No. (2) of 2023 "Committee for the Unification of Federal and Local Judicial Principles" to adopt the judicial principle of the impermissibility of the parties' agreement - as stipulated in Article 33/5 of Federal Decree-Law No. 42 of 2022 issuing the Civil Procedure Law - to violate the territorial jurisdiction of courts that are subject to an independent judicial authority.