Dispute Resolution in light of law No3 of 2022
Dispute Resolution in light of law No3 of 2022

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Dispute Resolution in light of law No3 of 2022

Introduction:

Federal Law No. (3) of 2022, which regulates commercial agencies in the United Arab Emirates (UAE), introduces the establishment of the Commercial Agencies Committee. This committee plays a crucial role in resolving disputes that arise between the parties involved in registered commercial agency agreements. In this article, we will explore the competencies of the committee, its procedures, and the option of resorting to arbitration under Federal Law No. (3) of 2022.

Formation and Functions of the Commercial Agencies Committee:

Under Article (23) of Federal Law No. (3) of 2022, the Commercial Agencies Committee is established. The Cabinet issues a resolution to determine the committee’s formation, work system, member remuneration, and fees for hearing disputes. This committee serves as an alternative dispute resolution mechanism for commercial agency disputes, aiming to provide a prompt and efficient resolution for the parties involved.

Competencies and Procedures of the Committee:

a. Exclusive Jurisdiction: According to Article (24), the Commercial Agencies Committee has exclusive jurisdiction to hear disputes related to registered commercial agencies. Before parties can resort to courts, they must first submit their dispute to the committee. This requirement ensures that the committee has an opportunity to address the dispute before it proceeds to formal litigation.

b. Timely Resolution: The committee is mandated to address the dispute within twenty-two (22) working days from the date of application submission or completion of the required documents. The committee may seek assistance from relevant experts or entities to assist in the resolution process. Ultimately, the committee must render a decision on the dispute within one hundred and twenty (120) days from the application submission date. Failure to reach a decision within this timeframe allows either party to resort to the courts within sixty (60) days.

c. Binding Decision: Once the committee issues its decision, there is no admissible challenge against it after sixty (60) days from the notification date. The decision holds the force of a writ of execution, ensuring that parties comply with the committee’s ruling.

Assistance of Experts:

Article (25) of the law grants the Commercial Agencies Committee the authority to seek the assistance of experts or specialized entities when necessary. This provision ensures that the committee has access to relevant expertise and knowledge, enhancing the quality and accuracy of the decision-making process.

Arbitration as an Alternative:

a. Arbitration Agreement: Federal Law No. (3) of 2022 acknowledges the parties’ right to include arbitration clauses in their commercial agency agreements. This allows them to refer any disputes arising from the agreement to arbitration.

b. Arbitration Within the State: Unless otherwise agreed by the parties, arbitration proceedings should take place within the UAE. This provision ensures that the dispute resolution process remains within the jurisdiction of the UAE.

c. Committee Decision and Arbitration: If either party resorts to arbitration after the Commercial Agencies Committee has issued its decision, the committee’s decision will have no effect or consequence on the arbitration proceedings. This provision ensures that parties can pursue arbitration irrespective of the committee’s decision.

d. Transitional Provision: Article (26) clarifies that the provision allowing arbitration does not apply to disputes that were already being heard by the committee or the competent courts before the publication of Federal Law No. (3) of 2022.

Conclusion:

The establishment of the Commercial Agencies Committee under Federal Law No. (3) of 2022 provides a dedicated mechanism for resolving disputes in commercial agency agreements. Through its exclusive jurisdiction, timely procedures, and binding decisions, the committee aims to facilitate efficient and fair resolutions. In cases where parties prefer arbitration, the law recognizes their autonomy to pursue this alternative avenue. Overall, these provisions contribute to a robust framework for resolving commercial agency disputes in the UAE.

For further assistance please contact Al Safar & Partners on +971.4.4221944 email reception@alsafarpartners.com  – www.alsafarpartners.com  

Written By: Mrs. Kavitha Panicker – Managing Partner at Al Safar and Partners Law Firm.

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