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RAK Establishes Commercial Court

Mohammed Nedal Dajani Senior Associate, Head of Sharjah & Northern Emirates offices nedal.dajani@bsabh.c...
Mohammed Nedal Dajani Senior Associate, Head of Sharjah & Northern Emirates offices nedal.dajani@bsabh.com
UAE Law No. 1 of 2019 issued on 30th June 2019 by HH Sheikh Mohammed Bin Soud Al Khasimi

Ras Al Khaimah is one of seven’s emirates of the UAE. As a recent World Bank report pointed out, Ras Al Khaimah has one of the best economies for enforcement contracts and its “estimated Ease of Doing Business”. Furthermore, this report places the emirate amongst the top 30 economies on the ease of doing business and is currently 31 out of 169 countries. Attractiveness of the UAE and the Middle East region concerning business represents one of the main reasons for this. Everything is done to offer attraction to the UAE and its 7 emirates that has constituted it such as UAE Federal regulations, free zone regulations, the oil and gas business and the newer parts of business in the region, the environment and tourism economy. The Ras Al Khaimah emirate, like its near cousins, Dubai and Abu Dhabi,, has an attractive, adapted, balanced and specialized commercial legal system, with tailor made regulations for business actors. As stated by the latest World Bank’s Report, the commercial court, which has recently been ordered by public authorities, is an “…another improvement in rankings for the emirate” including “the efficiency in the process to resolve a commercial dispute in Ras Al Khaimah's courts...”.

As it is the purpose of this short overview, we will highlight the fact that this legislative reform of the Ras Al Khaimah emirate joins the worldwide trends of commercial dispute resolution by a creation of a Commercial Court.

Law No. 1 on the 30th of June 2019 states that a Commercial Court will be established in the Ras Al Khaimah emirate and shall start work on 8th September 2019. H.H. Sheikh Mohammed bin Saud bin Saqr Al Qasimi, Crown Prince of Ras Al Khaimah and Chairman of the Judicial Council, has ordered the establishment of the Ras Al Khaimah Commercial Court. Ahmed Mohammed Al Khateri, Chairman of the Courts Department in Ras Al Khaimah, has instructed and briefed its teams so that this new Court will work “in the times schedules”.

It is right to say that this Regulation is a last stone to an efficient commercial judicial system of Ras Al Khaimah. An efficient commercial dispute resolution purpose is in all minds, which can be seen from the previous decision of the Ras Al Khaimah judicial Court No. 36 on 2016 and No. 13 on 2017. These recent decisions stated that the Court shall have a special court, like the one day court. This includes circuits for partial claims, fully claims, appeal and cassation, as well as having exclusive jurisdiction circuits.. The same apply for the commercial Court, which took over the commercial matters and cases and applied the same order of handling.

It will be interesting to point out characteristics of this new commercial Court. We also must see the main points that will be raised, such as the strengthening of efficiency of commercial dispute resolution. The purpose and news insights targeted by this Law will be highlighted For these reasons, we will firstly suggest why this law is important. Secondly, we will focus on the effect of this law, followed by the issue of change provided by this law and finally we will see what this change means.

Enhancement of legal framework, unify systems and certainty of business

This law implements and completes the Ras Al Khaimah emirate legal system. The initial text of the last 30th of June set up an independent commercial Court within the Judicial system of Ras Al Khaimah. The material and territorial scope of application are strictly limited to the emirate of Ras Al Khaimah and the Commercial Court is competent for any commercial issue, dispute or commercial practices hindered by one or several parties into commercial’s relations. The need to let economy’s activities and investments grow promptly, safely but also securely, in all aspects of business and financial matter, carry on along the path of judicial and jurisdictional reforms of the Ras Al Khaimah emirate.

This reform involves a special Court which is dedicated to commercial issues and business. It lays down commercial matters, with the purpose to provide, business actors, current or future, a suitable forum for their disputes. For this reason, in addition to this commercial court, this law has also set up an office to manage all requests and commercial hurdles that have arisen by the parties. This is then referred to a specialist panel in commercial law, whose main task is to assess the case before referring them to the judges.

From a material scope point of view, the new commercial court has exclusive authority on all commercial matters submitted to the jurisdiction within the Ras Al Khaimah emirate.

Finally, Law No. 1 of 2009 is also historic, to the extent that it has set up a separate, independent and special jurisdiction under UAE law, to handle the commercial cases as an exclusive jurisdiction.

Ras Al Khaimah on the path of attractiveness through secure and safe dedicated dispute resolution jurisdiction

Simplifying and providing the parties a suitable and unifying forum to know their dispute, improves attractiveness of the territory of where this jurisdiction is based. If Ras Al Khaimah can provide business actors a jurisdiction exclusively dedicated to commercial dispute, business actors will see a secure and safe place to conduct their business.

Securing and enhancing business relations and attracting business actors to invest, has been done within other international business areas, with a positive impact on the investment and economy activities. For example, in Belgium, the government set up the new Brussels International Business Center and in the Netherlands, public authorities ordered the setting up of the Netherlands Commercial Court, joining Singapore with the Singapore International Commercial Court. In Paris also, in 2017, the French Court of Appeal set up a new chamber within the Court of Appeal named the “International Commercial Chamber of the Paris Court of Appeal”, this being entirely dedicated to complex and commercial dispute resolution. Everywhere, such jurisdictions are being created and we’ve noted an increasing number of cases presented there by international parties, with interests or investments on their jurisdiction. The result expected with the setting up of the new commercial jurisdiction of Ras Al Khaimah shall be the same, an increase of investment, a result of the new forum represented by this jurisdiction.

What will change?

Here, we are talking about a new jurisdiction and the impact that the change will bring with it. This new jurisdiction, for the first time, will give a specialized commercial forum for business actors to know their dispute. However, we’ve already mentioned that this jurisdiction will also compose of an office to hear and assess these cases, to decide whether this case could be brought before judges of the Commercial Court. Therefore, the need for staff, judges and experts could potentially raise very quickly in the near future. Furthermore, the development of this court may be increased, specifically in regards to the different subject matters and contracts that the parties will be able to have. Because of this, we can expect that this new jurisdiction will be divided into different Chambers. By doing so, Judges and experts would be named in terms of their specialties and would be placed in the relevant chamber. Also good to mention that it shall need a certain qualification of the expert appointed by the court in case the court need to get an expert opinion or recommendations … etc.

Moreover, we are talking about a specialized chamber that will be able to mention specialized regulations, that are applicable before this jurisdiction. For this reason, we can expect that Ras Al Khaimah’s government will proceed to enact a specialized regulation that will relate to a commercial matter. An increasing number of the commercial regulations more accurate and more detailed will be enacted by the local government to provide to the parties a legal framework, in compliance with what they are looking for in Ras Al Khaimah.

What does this mean?

This law is entirely in line with economic reforms that started a few years ago by public authorities. In order to achieve purpose to be a suitable business place for investors and growing as a one of strongest economy in the region, the government has started reforms. This law of June 2019 is a perfect example. The legal system will become more liberal, and this jurisdiction should constitute as another stone of the strong legal system of Ras Al Khaimah.

After construction, financial service, tourism and other parts of Ras Al Khaimah’s economy, judicial systems are highly specialized and focus only on commercial matters. There is no doubt that a good understanding of business will help to strengthen the construction of the Ras Al Khaimah emirate as one of the leaders in the region, and in the world.

Article written by Mohammed Nedal Dajani, Head of Sharjah & Northern Emirates office.
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