On 23 September 2020, Abu Dhabi Judicial Department issued a new Resolution No. 26/2020 (“Resolution”), where it decided to establish – within Abu Dubai Court – a Small Claim Tribunal (“SCT”) with a specific jurisdiction to review claims its total value does not exceed AED 500,000.
In our view, the SCT is very similar, if not identical, to the DIFC small claims tribunal, where litigants have no option but to represent themselves before the tribunal as a cost-saving method. Abu Dhabi Courts aim to ease up and expedite the litigation process regarding small claims (which is the main concern of small to medium-sized businesses in the country). However, at the same time applying judicial principles, which have already been tested in other jurisdictions within the UAE.
Now let us approach this new amendment from a closer perspective. Below are the Resolution’s main elements.
Abu Dhabi Court will establish one or more SCT, depending on the workload of the Court. It is crucial to understand that the SCT will have exclusive competence in regards to certain claims (i.e., civil, commercial, employment, and contractual claims, among others), which means that the procedure must be followed religiously by referring these claims to the SCT to ensure accurate registration of the cases.
The SCT is, as per its name, has an exclusive jurisdiction to review “Small Claims” only. By small claims, we mean claims not exceeding a total value of AED 500,000. However, the Resolution excludes claims which the Government is a party thereto, and all summary proceedings and payment orders (i.e., precautionary attachments, civil travel ban applications, and other similar summary proceedings).
As a prerequisite, it will be mandatory for the claimant to ask for the appointment of an expert to pay the expert’s fees in advance at the registration stage of the claim before the SCT. The value of the expert’s fees will be determined based on 3% of the claim’s total amount, provided that it is not less than AED 2,000.
As stated in article number five (5) of the Resolution, when the SCT is willing to appoint an expert, it has the authority to request from the expert to attend the hearing and present his opinion/views orally before the court. The expert’s opinion will be recorded within the hearing minutes. Furthermore, the SCT shall issue its decision on the same hearing date, which shall be considered a final decision. The SCT’s decision can be limited to a summary of the parties’ defense and claims and the reasoning behind its findings.
In regards to the Appeal stage, it is important to note that if the claim amount is above AED 50,000, the parties have the right to appeal any decision issued by the SCT. On the contrary, if the claim amount is below the AED 50,000, there will be no possible Appeal, and the SCT’s decision will be considered final.
The Appeal time period is fifteen (15) days starting from the issuance of the decision date stated within article eleven (11) of the Resolution.
In conclusion, we cannot ascertain when, officially, this SCT will be established and ready to review claims. However, the Resolution shall come into force directly on its publication date in the official Gazette (October 2020 edition). We believe that this will be a major improvement within the judicial system facilitating the litigation process, mainly favoring small and medium-sized businesses, which will benefit from the SCT’s fast track process to collect their debts.
Please note that the above is only a summary and our overview of the Resolution, and not legal advice. We expect further guidance to be issued by the Abu Dhabi Judicial Department in relation to the application of this Resolution, and the practical obstacles that will arise once applied.
Matouk Bassiouny & Ibrahim