UAE court’s jurisdiction in commercial agency agreements

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When it comes to arbitration in the UAE, the general rule and practice of UAE courts is that courts would not entertain any action related to a dispute arising from the execution of an agreement in which the parties have agreed to arbitrate.

However, if either party decided to proceed in court despite the presence of the arbitration clause and the other party does not object at the first hearing, the action may be heard and the arbitration clause shall be deemed inoperative. The UAE legislator applied certain restrictions on the parties’ freedom to agree to arbitrate when entering into commercial agency agreements. We address this exception in light of a judgement rendered by the Dubai Court of Cassation.

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