Dubai Forms Committee to Settle Family Business Disputes and Preserve Continuity

In a move to ensure the continuity of family businesses and prevent harm to their reputation or financial position, Dubai has established a ‘Family Business and Family Ownership Disputes Settlement Committee’. This resolution, issued by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, aims to speed up the settlement of disputes while balancing prompt justice and the economic interests of these companies.

The committee, formed under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, will be composed of financial experts who will work alongside judges to provide specialized judicial expertise.

This decision aligns with Dubai’s efforts to foster family business and ownership sustainability, recognizing the vital role they play in the emirate’s economy. Sheikh Maktoum emphasized the importance of creating a business environment that supports the growth and prosperity of family businesses for generations to come. Dubai aims to be a leading destination for promising investment opportunities and a top urban economy worldwide.

The ‘Committee for Dispute Settlement of Family Businesses and Ownership’ will be responsible for considering and settling all disputes related to family businesses and family ownership. Their focus will be on preserving continuity, preventing interruptions in business operations, and safeguarding reputation and financial stability throughout the dispute resolution process.

Dubai Courts President, Taresh Eid Al Mansouri, highlighted that this committee reflects the wise leadership’s commitment to building a safe society and a fair judiciary. It utilizes the Dubai Courts system’s judicial and administrative expertise, as well as its digital infrastructure, to ensure effective enforcement of laws and achieve excellence in the judicial sector.

Prof. Saif Ghanem Al Suwaidi, Secretary General of the Dubai Judicial Council, emphasized that the committee will act in accordance with Federal Decree-Law No. (37) of 2022 on family businesses and Law No. (9) of 2020 regarding the regulation of family ownership in Dubai. Their aim will be to expedite the resolution of disputes while considering the economic interests of these companies.

The committee will consist of a chairman, who must hold a rank no lower than an appeal judge, and two members with expertise in legal, financial, and family business management fields. The appointment of these members will be based on the recommendation of the Director General of Dubai Chambers.

The committee’s responsibilities include resolving disputes arising from family ownership contracts, conflicts between partners in family businesses, and disputes involving family members. It will also adjudicate matters related to the termination of family business status, determining share prices in family businesses, and settling disputes regarding share redemption.

To maintain family ties, disputes will first be referred to the Family Members Council, if the family ownership contract or memorandum of association includes provisions for amicable settlements. The resolution also emphasizes the role of the Centre for the Amicable Settlement of Disputes attached to Dubai Courts in resolving corporate and family ownership disputes through conciliation and reconciliation.

To ensure effective functioning, the committee is granted the authority to take necessary preventive and urgent measures to preserve the continuity and reputation of family businesses. Rulings of the committee can be appealed before the competent court in Dubai Courts, in accordance with the procedures outlined in the Civil Procedure Law.

Regular reports on the committee’s work will be submitted to the Ministry of Economy for review and to enhance their effectiveness. This initiative builds upon Sheikh Mohammed bin Rashid Al Maktoum’s previous decree to establish the Family Business Centre in Dubai, aimed at supporting the sustainability and growth of family businesses in the emirate.