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The provisions of the Commercial Agencies Law (Federal Law No. 18 of 1981) (the Law) relating to the powers and jurisdiction of the Commercial Agencies Committee (the Committee) have been the subject of two important amendments on the basis of Law No 13 of 2006:
1. All provisions and references relating to the Committee were repealed because of an amendment to Article (8) as there was reference to the powers of the Committee under this article.
2. The law further specifically repealed Articles (27) on the constitution of the Committee and Article (28) on the jurisdiction of the Committee.
Further amendments to the Law, which occurred by virtue of Law No 2 of 2010 restored the powers and jurisdiction of the Committee and added further significant and important provisions, which are discussed below.
What are the significant amendments on the jurisdiction of the Committee?
Law No 2of 2010 has restored the Committee as initially provided for under Law No 18of 1981. This amendment has further added a number of significant provisions. Several important points arise from these amendments and additions:
How to contest the Committee decisions?
The Committee is required to issue its decision within 60 days of hearing the dispute. As stated above, the aggrieved party may contest such a decision before the competent court, by way of a traditional law suit.
The Statement of Claim should include the particulars of the claim as required by the Civil Procedures Code. The parties shall be able to file all the documents and pleadings they wish, irrespective of those submitted at the Committee.
These proceedings should be filed before the Federal Courts in Abu Dhabi as the Ministry should be joined as co-defendant to the proceedings.
The Judgment of the Court of First Instance in this respect shall be subject to a right of appeal at the Court of Appeal and then subsequently at the Federal Supreme Court level.
What is the Extent of Jurisdiction of the Committee?
According to the clear wordings of Article 28 the disputes relating to registered commercial agencies have to be filed before the Committee first and may not be filed directly to the Court. Rather than being prohibitive, the regime is designed to foster early settlement of disputes before the parties incur unnecessary time and costs litigating in the Court.
Although this provision was not included in the old provision of Article 28 of the Law, Federal Courts have historically refused to entertain disputes relating to commercial agencies. Such judgments were based on an understanding that Article 28 granted jurisdiction to the Committee. Even in the absence of the new provision formalizing this arrangement, it had already been the consistent approach of the UAE Federal Courts.
Having said that, it is worth mentioning here that the Dubai Court of Cassation has adopted a different understanding and approach to this matter in the past. The Dubai Court of Cassation has issued several rulings confirming that it is not imperative to file the law suit to the Committee before the Court.
In these cases the Dubai Court of Cassation held that complainant / plaintiff enjoyed the option of filing his complaint to the Court directly, without going through the Committee, or to file with the Committee first and thereafter with the court. In these rulings the Dubai Court of Cassation appears to have assumed that there is nothing in the commercial agencies law that prevents such a process.
This is an important reasoning because the Court of Cassation has made it very clear that had there been any provision in the law that clearly outlined this process in that a claimant was obliged to first file the complaint with the Committee before filing with the Court, then this process should be followed. This could be understood from the judgments referred to even though they do not specifically hold so.
Now, reading this in light of the amendment prescribed by Law No 2 of 2010 may give an indication as to the future process of this matter before the Dubai Courts, because the process set down by the amendment to Article 28 is very clear that parties may not refer the dispute to Courts prior to reference to the Committee. This may, therefore, be read and applied by the Courts in Dubai to rule that commercial agency disputes should be first referred to the Committee before the Court. Although this has not yet been tested before the Dubai Court of Cassation (due to the very recent issue of Decree No. 3 of 2011) this approach is expected to be taken in the future litigation of registered commercial agency disputes before the Dubai Courts.
Are there any disputes that may fall out of the committee’s jurisdiction and powers?
It is important to remember that there are some disputes related to commercial agencies which can be filed directly to the Court without prior recourse to the Committee. A number of examples, derived from rulings of the Federal Supreme Court, are set out below:
A final note to be added here is that although Decree 3 of 2011 establishing the Committee has 60 days to fix a date for hearing the dispute, it is not clear whether a party may proceed to the court if the Committee failed to so set a date. Under the old provision of the Law there was a practice that parties would usually proceed and file their complaint to the Court after the Committee exceeded the 60 days provided for under Article 28. This however is yet to be tested in light of the new amendment.