Introduction
Most
of the Real Estate disputes are not resolved amicably, instead the parties to
the dispute will have recourse to the Courts. The civil procedural law regulates
judicial processes, called the court procedures. This advice sheet will explain
the main court procedures for a real estate case.
(A) COURT OF FIRST INSTANCE
Stage
1: Statement of Claim
The
Court proceedings are being initiated only after the filing the memorandum of claim
(Statement of Claim) in front of the competent Court by the Claimant. The Court
considers the memorandum of Claimant normally address the Real Estate
Regulatory Authority (RERA) to enquire and get some basic information about the
real estate unit subject of the dispute, real estate development project,
developer of the project, etc. Initially the Court will request from the Agency
certain information like:
- Provide basic information about the Developer,
purchaser, real estate unit subject of the dispute and the expected completion
date.
- Whether the real estate development project is
approved.by RERA.
- Whether the defendant has taken the project name
and obtained necessary approvals.
- The status of the construction works in the site.
- Whether an escrow account is opened for the
subjected real estate development project and whether the invested funds
are being deposited in the escrow account. Any other question the court’s
deems relevant to the dispute.
Stage
2: Notification
a)
Timeframe: it is
beneficial to note that the notification process might be lengthy depending on
the method of summoning. However it has
to be noted that the notification process might consume up 30-40% of the whole
case length. For instance, if the case takes 1 year to obtain a final judgment,
the notification process may take 3-4 months.
b)
Notification
process: Upon filing the lawsuit the court’s clerk shall execute the summoning
and serve it to the address of each Respondent.
The
summons shall be signed by the Court and it must contain the name and address
of the Court and the names and addresses of all litigants. It must be directed
to the Respondent and contain the hearing date which has to be attended by the Respondent.
The
court’s clerk shall attempt to first serve
it on the Respondent on his given address Not surprisingly there are many cases
in which the clerk is unable to serve the Respondent on his given address
ex……….. When the provided information about the Respondent’s place of work or
residence was unclear or the non-availability of the respondent on his given
address.
c)
The Respondent’s
failure to attend the court’s hearing although being summoning will entail The
Court’s decision to notify the Respondent for the second time following which
the court will pronounce its judgment.
Stage 3: Guidance
In
circumstances where the court’s clerk was unable to summon the notice to the
Respondent, the court shall postpone the hearing to guide the court’s clerk on
the opponent’s address. This process
enables the Claimant or his representative to accompany a clerk to the
Respondent’s address in an attempt to serve him. If this process still does not
result in the Respondent being served, the Judge will order an ‘Investigation’
to take place.
Stage
4: Investigation
The
Investigation Process is the process by which the court gives directions
directly to the UAE Governmental authorities to seek assistance in locating the
Respondent. The Judge’s legal secretary will send a letter to one or more of
the following Governmental bodies with a request for information on the
whereabouts of the Respondent:
·
Immigration Department
or CID if the Respondent is a person;
·
Dubai Economic
Department (DED) if the Respondent is a company registered in Dubai;
·
The Free Zone
Authorities if the Respondent is a company registered in a Free Zone.
If
the Governmental authorities report back that they have no information about
the Respondent, the matter will proceed to the Publication Stage (see below).
It is rare when the Governmental authorities are unable to provide information
on an individual or company.
Stage 5: Second Notification attempt
If
the Governmental authorities do provide useful information about the address of
the notified party the Summoning process will be repeated, with or without
Guidance.
Stages
6 and 7: Summoning Publication
In the event that the court’s clerk couldn’t
serve the notification, the court shall adjourn the hearing to allow a
publication to be made in the newspaper. An advertisement will be made in a UAE
based newspaper requesting the Respondent to make contact with the Court within
a certain period. The publication can be made in Arabic and/or English and the
cost of the publication must be borne by the Claimant. If the Respondent does
not contact the Court within the time period, the court may order that a
further advertisement be published in a newspaper.
After
both publications, if Respondent does not attend the next hearing listed, the
case will be postponed for judgment.
CHART 1: A SUMMARY OF THE INITIAL
COURT PROCESSES
Stage
8: The Court Process
In the event that the Respondent or his
legal representative attends the Court’s hearing after being summoning the court
shall grant him sufficient time to review the Statement of Claim and produce a
memorandum in response to the claim. It should be noted that all proceedings in
civil matters necessitates written submissions supported by documentary
evidences or other evidences. The Court does not hear oral arguments from the
parties’ lawyers; the case is determined on the basis of the written
submissions and documentary evidence alone.
After the submission of the respondent’s
memorandum of response, the Claimant or his representative will be in turn granted
time (if required) to review the submissions and draft their own Reply
according. In certain cases and provided that the dispute is in relation to
technical or accountancy matters the court instructs an independent expert
nominated by the court Whose role is to examine the supporting documents of the
cases along with both parties submissions ending up with the issuance of a
report addressing the points and issues as mentioned in the court’s
interlocutory judgment.
It is common practice for the Court to
appoint an expert for findings of facts in a variety of issues including
financial, engineering, accounting or other technical matters. Experts are being
appointed and instructed in most of the disputed litigation matters.
The appointed expert is obliged to comply
with the provisions of the applicable laws which includes holding the expertise
meetings with the parties and/or their lawyers and keeping minutes of those
meetings. The expert has the right to communicate with authorities, question
the witnesses, check the accounts, ask for correspondence between the parties and/or
request any additional information that is necessary for a better understanding
to the disputed matter ending up with
drafting and submitting the report.. Once the expert completes his report and
produce the original copy of the court, the parties are given an opportunity to
comment on the report and a hearing date may be fixed for this purpose. The
expert’s report is not binding to the court as it has the discretional
authority to adopt it or not. The expert
provides independent advice to the Court and does not represent the interests
of any party.
When the Court appoints an expert, the
Court may order one of the parties to pay the expert’s fees. Usually, but not
always, the Claimant is ordered to make the payment. The Court may order additional
payments. The fees paid to an expert may vary from AED 5,000 to AED 50,000. If
the expert fee is not paid, the expert will not start research on the matter
and Judge may issue his judgment based solely on the submitted evidence. In
practice, this situation negatively affects the case and the interesting
party’s rights.
As there are no oral hearings in the
Court, the expert is not questioned by either party or the Court. However, once
the expert has filed the report, the parties are given an opportunity to
comment and cross-examine the report. This is done by written submissions. This
process can take from 1 to 4 hearings held by the Court.
If the Court decides that the matter
requires further investigation or there are strong objections from either
party, it can refer back to the expert. The Court may also appoint another
expert or committee of experts to prepare a report. New expert reports incur additional expenses,
which may be borne by the objecting party.
Finally, after studying the report of the
expert(s) and comments of both parties, the case shall be closed and court shall
pronounce its judgment.
In very rare circumstances, the Judge may
authorize either party to cross examine each other.
CHART
2: INVOLVEMENT OF A COURT APPOINTED EXPERT
Once the expert’s report is submitted to
the Court, the court has the discretional authority to rely on it totally or partially or even disregarding it. This stage is usually the last stage of
proceedings in the Court of First Instance.
(B) APPEAL COURT
If the amount claimed is more than AED
20,000.00 then an unsuccessful party has the right to appeal the judgment in
front of the appeal court within thirty days as of the judgment’s issuance by
the court of 1st instance in case the judgment is not pronouced in
Absentia.
It is possible to appeal in relation to
findings of both fact and law. The Court of Appeal hears the matter afresh and
the parties can file further submissions and evidence. For the Appeal Court,
the Appellant has to go through the notification process as set out above. A
hearing date is allocated for the Respondent to file submissions in an answer.
Further hearing dates can be fixed by the Court for exchange of further
submissions. When the Court of Appeal considers that the matter has been
sufficiently pleaded, it reserves the matter for judgment.
The Court fees for claims within the
Appeal Court are 1.5% of the amount claimed, with the maximum of AED 6,000.
These are borne by the appellant.
(C) SUPREME COURT (COURT OF CASSATION)
eitther part to the dispute has a right to
further appeal the judgment issued by the court appeal in front of the Supreme
Court (Court of Cassation) on a matter of law, subject to certain monetary
limits (the claim amount must be more than AED 200,000). The time limit for
filing the appeal is 60 days from the date of judgment delivered by the Court
of Appeal. This time limit can be extended in certain circumstances. The Court
of Cassation can either give final judgment in the matter or remand the matter
back to the Court of Appeal for further findings. If the case is remanded back
to the Court of Appeal, there will be further hearings in the Court of Appeal
and the parties again have a right to appeal to the Court of Cassation on a matter
of law.
The
whole structure of the case is elaborated below:
↓
Timeframe:
Overall the timeframe depends on the complexity of the issues and the circumstances in each case. Proceedings in the UAE Courts are court-driven and the parties have little, if any, control over the pace at which the matter proceeds. Obviously not all the cases in the Court go through all the above stages, but it is important that clients are aware of all potential stages. For example, if the Court appoints an expert, the case takes longer to reach judgment stage. The judgment of the Court of First Instance may be expected within approximately one year from the date of filing the claim (excluding any additional time required for serving a defendant residing abroad).
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