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Competition Enforcement in the UAE: From Framework to Action

Anti-Competitive Practices in the UAE: A Market Under Increasing Scrutiny

Competition Enforcement in the UAE: From Framework to Action The UAE has progressively strengthened its competition and consumer protection enforcement apparatus. As the country continues to attract foreign investment and consolidate its position as a preeminent global commercial hub, regulators have intensified their focus on actual market conduct—rather than formal compliance structures alone. For businesses, this evolution signals that competition compliance can no longer be treated as a dormant policy document. For consumers, it portends heightened regulatory scrutiny of pricing anomalies and supply disruptions affecting essential goods. The legislative cornerstone of this regime is Federal Decree-Law No. 36 of 2023 Regarding Regulating Competition (the “Competition Law”), which operates in tandem with the consumer protection framework established under Federal Decree-Law No. 5 of 2023 on Consumer Protection and its Executive Regulation (Cabinet Resolution No. 66 of 2023). Collectively, these instruments are designed to ensure the proper functioning of markets, with particular emphasis on conduct in sectors that directly affect household welfare. What Are Anti-Competitive Practices in the UAE? Anti-competitive practices comprise conduct that restricts, distorts, or otherwise undermines the competitive process. While such conduct may not always be immediately apparent, its effects typically manifest in observable market phenomena: parallel pricing movements, anomalous supply constraints, or diminished consumer choice. Over time, these distortions translate into tangible consumer harm—elevated prices, degraded quality, suppressed innovation, and reduced market options. This explains why competition enforcement is not merely a theoretical exercise. When staple commodities experience price increases that cannot be attributed to demonstrable cost pressures or supply constraints, regulators will invariably investigate whether such movements reflect genuine market forces—or whether coordination, exclusionary conduct, or the exploitation of market power has distorted competitive outcomes. Under the Competition Law, enforcement attention centers on three principal categories of concern: (i) restrictive agreements, including horizontal collusion among competitors; (ii) abuse of dominance by undertakings possessing substantial market power; and (iii) economic concentrations—mergers, acquisitions, and similar transactions—that may substantially lessen competition absent appropriate regulatory assessment. Key Prohibited Conduct Under the Competition Law Enforcement activity under the Competition Law typically concentrates on two principal areas of concern. The first is competitor coordination—whether through explicit agreement or tacit understanding—that has the object or effect of manipulating prices, restricting output, allocating customers or geographic territories, or otherwise producing market outcomes that genuine competition would not yield. Such arrangements may be effected through direct communication, intermediaries, or the exchange of competitively sensitive information. The second is abuse of dominance, wherein an undertaking holding a dominant market position leverages that position to foreclose competitors, erect barriers to entry, or otherwise engage in conduct that impairs the ability of rivals to compete on the merits. Common manifestations include predatory pricing, exclusionary rebate structures, refusals to deal, and tying or bundling arrangements designed to extend market power into adjacent markets. Additionally, the Competition Law addresses structural competition concerns through the regulation of “economic concentrations.” Transactions meeting applicable jurisdictional thresholds require notification to, and clearance from, the competent authority prior to implementation. The relevant thresholds and procedural requirements are set forth in Cabinet Resolution No. 3 of 2025, which establishes the criteria for determining when a transaction constitutes a notifiable concentration. Consumer Protection Overlay: Price Increases and Market Stability Measures Competition enforcement represents one dimension of market oversight. Consumer protection constitutes the complementary dimension, assuming particular salience when pricing conduct affects everyday essentials and household budgets. In enforcement practice, suspected cartel activity frequently manifests as “unexplained” price movements: increases that appear coordinated across competitors, bear no demonstrable relationship to underlying costs, or are timed to coincide with periods of heightened consumer vulnerability. Such patterns may constitute circumstantial evidence of collusion warranting further investigation. The Executive Regulation to the Consumer Protection Law establishes supplier obligations concerning pricing transparency, disclosure requirements, and regulatory intervention mechanisms that may be invoked under specified circumstances. When read in conjunction with the Competition Law, these provisions create a dual-track enforcement architecture: structural competition oversight operating alongside targeted consumer-facing controls designed to address immediate market dysfunction. Why This Matters Now: A Live Example from the Poultry Market Recent enforcement activity in the poultry sector illustrates these principles in practice and demonstrates the practical application of the UAE’s competition enforcement framework. According to public statements and contemporaneous reporting, authorities identified conduct in the poultry market potentially constituting collusion—specifically, alleged coordination in the fixing and manipulation of poultry prices, coupled with unjustified price increases during what were characterized as exceptional market conditions. The matter was subsequently referred for further enforcement action. The significance of this enforcement activity is readily apparent: poultry constitutes a dietary staple in the UAE. When pricing in such a category is distorted through anti-competitive conduct, the consumer impact is immediate, widespread, and disproportionately borne by lower-income households. Beyond its immediate consumer welfare implications, the case provides instructive insight into regulatory enforcement priorities. Authorities will prioritize outcomes affecting household welfare, and they will subject pricing patterns suggestive of coordination to rigorous scrutiny. The case also underscores a principle that businesses occasionally underestimate: regulators are increasingly focused on market outcomes rather than formal compliance documentation. Pricing patterns exhibiting characteristics of coordination—even absent direct evidence of explicit agreement—are likely to attract investigative attention. Implications for Businesses Operating in the UAE For undertakings operating in the UAE, enforcement actions such as the poultry-sector investigation serve as a salient reminder that routine commercial decisions can generate material competition risk—particularly in concentrated markets, during periods of pricing volatility, or where competitors maintain frequent points of contact. In practice, organizations should integrate competition compliance into routine commercial decision-making processes, with particular attention to: competitor contacts and information exchanges, including informal communications at trade association meetings, industry conferences, or social gatherings; pricing governance frameworks, especially where market conditions create pressure toward price alignment; distribution and exclusivity arrangements that may foreclose competitors or partition markets; dominance-risk assessment protocols for entities holding significant market positions; and merger and acquisition transactions or corporate restructurings that may qualify as “economic concentrations” triggering mandatory notification and clearance requirements. Critically, anti-competitive liability does not require subjective intent. Conduct may attract enforcement attention—and potentially give rise to liability—if it produces outcomes exhibiting the hallmarks of collusion, market foreclosure, or price manipulation, regardless of the parties’ stated intentions. Protecting Consumers and Market Integrity Robust competition enforcement serves fundamental market welfare objectives: maintaining competitive pricing, incentivizing quality improvements, and fostering innovation by preserving market contestability. When competition is distorted—whether through horizontal collusion, exclusionary abuse of dominance, or anti-competitive concentrations—the resulting consumer detriment materializes rapidly, particularly in essential goods sectors where demand is relatively inelastic. This explains why enforcement interest in sectors such as poultry carries significance extending well beyond the immediate parties. At its core, competition enforcement in essential goods markets is about protecting household welfare from distorted pricing and ensuring that market dynamics reflect the outcomes of genuine competitive rivalry. Through the enactment of the Competition Law and the complementary consumer protection regime, the UAE has articulated a clear policy position: fair competition and market transparency constitute enforceable legal standards, not merely aspirational principles. Market participants should expect these standards to be actively enforced. Looking Ahead The UAE’s regulatory trajectory points toward a more sophisticated, enforcement-capable competition environment. The legal framework now provides clearer rules governing restrictive agreements, abuse of dominance, and economic concentration review, with substantive thresholds and procedural requirements that align with international best practice. For businesses, the practical imperative is to prepare proactively rather than reactively: embed competition awareness into day-to-day commercial operations through regular training and compliance protocols; establish and document legitimate, cost-based pricing rationales; provide specialized guidance to personnel who interface with competitors, whether in sales, procurement, or trade association contexts; and ensure that proposed transactions are assessed at an early stage for potential economic concentration filing obligations. For consumers and the broader economy, intensified enforcement activity—exemplified by the public scrutiny surrounding the poultry market—signals a marketplace that is expected to become progressively more transparent, more accountable, and more genuinely competitive. These developments merit close attention from all market participants. This article is for general information only and does not constitute legal advice. Authors: Asad Ahmad, Partner and Head of Antitrust & Competition and Khaled Abu Orabi, Senior Associate.

Market Definition: The Key to UAE Merger Filings

Introduction The UAE’s competition regulatory landscape has undergone significant evolution following the issuance of Cabinet Resolution No. (3) of 2025 (the “Cabinet Resolution”), which establishes the critical thresholds determining when undertakings must submit an application to the Ministry of Economy (the “MoE”) for approval of an economic concentration under Federal Decree‑Law No. (36) of 2023 Regulating Competition (the “Competition Law”). While the Cabinet Resolution provides welcome certainty regarding the quantitative thresholds that trigger a mandatory filing, practical complexities remain-particularly for transactions involving corporate groups active across multiple product markets. A key challenge arises where a corporate entity operates several distinct business lines: parties must carefully assess which revenues properly fall within the relevant market for purposes of the statutory thresholds, and whether the transaction materially affects competition in one or more relevant markets in the UAE. The Relevant Thresholds Under Cabinet Resolution No. (3) of 2025 Under Article 3 of the Cabinet Resolution, the minimum thresholds for submitting an application in respect of an economic concentration are met if either of the following conditions applies in the relevant market, within the State, during the last fiscal year: (i) the total value of annual sales of the concerned undertakings exceeds AED 300 million, or (ii) the total share of the concerned undertakings exceeds 40% of the total transactions in the relevant market. Article 12(1) of the Competition Law frames this obligation in the context of completing economic concentration operations that would affect the level of competition in the relevant market-particularly those that create or strengthen a dominant position-where either of the two threshold conditions is met. Because both thresholds are expressed by reference to the relevant market “within the State," the assessment focuses on UAE sales and UAE transaction shares in the relevant market(s) implicated by the transaction, rather than worldwide revenues. Notably, under Article 3 of the Competition Law, the law also applies to economic activities practiced outside the State to the extent they affect competition within the State-underscoring the extraterritorial reach of the UAE's merger control regime. “Notification” as an Approval Application and Key Timing Consequences Although merger control filings are often described colloquially as “notifications," it is important to understand that the Competition Law requires the relevant undertakings to submit a formal application to the MoE at least ninety (90) days prior to completion where the threshold conditions are met. It’s important to note that this timeline is not strictly implemented in practice by the MoE. Article 13(2) of the Competition Law provides that the MoE must issue its decision on the application within ninety (90) days from the date of receiving the complete application meeting the required conditions, with the option to extend this period once for an additional forty-five (45) days by decision of the Minister. Importantly, if no decision is issued within the applicable period, the economic concentration is deemed rejected-a strict deadline that parties must factor into their transaction planning. Critically for transaction planning, Article 13(2) of the Competition Law also imposes a standstill obligation: once an application is submitted, the relevant undertakings must not perform any acts or procedures to complete the concentration (or any part of it) until the MoE issues its decision. In addition, Article 14 of the Competition Law provides for interruption of the review time limits in certain circumstances, including where the MoE requests additional information or documents related to the economic concentration, or when a stakeholder files an appeal. Why the Relevant Market Definition Matters (Product and Geographic Scope) The Competition Law defines the “relevant market” by reference to two distinct elements: the relevant product market and the relevant geographic area. Relevant products comprise goods or services that are regarded, by reason of their prices, characteristics, and intended use, as interchangeable or substitutable in terms of meeting a certain need of consumers. The relevant geographic area is defined as the physical or digital place where the supply and demand of a product or service converge and where the conditions of competition are similar or homogeneous. These definitions are pivotal in the merger control context because the Cabinet Resolution’s thresholds are applied by reference to the relevant market in the UAE, rather than by reference to a group’s aggregate UAE revenues across unrelated activities. Getting the market definition right can make the difference between a mandatory filing and a transaction that falls below the thresholds. Implications for Transactions Involving Multiple Product Markets In practice, many corporate groups operate across several distinct product markets-spanning diversified portfolios and vertically related activities. Where a transaction potentially affects more than one relevant market, the prudent approach is to identify each potentially affected relevant market and assess, for each such market separately, whether the Cabinet Resolution’s thresholds are met “within the State.” For diversified groups, this generally means that the turnover (annual sales value) relevant to the AED 300 million test is the turnover attributable to each relevant market in the UAE, assessed separately, rather than total turnover aggregated across all business activities irrespective of market definition. Similarly, the 40% market share test requires assessing the parties’ combined share of total transactions in the relevant market in the UAE. Parties should also bear in mind that “undertaking” is defined broadly under the Competition Law. Article 1 defines an undertaking to include any person (natural or legal) that engages in an economic activity, its “associated person," or any association of such persons, regardless of legal form. This broad definition can significantly affect how the “concerned undertakings” are identified for purposes of the filing analysis. Practical Considerations for Transaction Planning From a transaction management perspective, parties should treat the UAE merger control analysis as a critical workstream that can materially affect both timetable and closing mechanics. Where the thresholds may be met, the statutory framework imposes the following timeline requirements: the application must be submitted at least ninety (90) days before completion, followed by the MoE's review period of ninety (90) days (extendable by forty-five (45) days), during which the standstill obligation remains in effect pending the MoE’s decision. Parties should also carefully consider the enforcement risks for non-compliance. Under Article 25 of the Competition Law, violating the application requirement in Article 12 carries a fine of not less than 2% and not more than 10% of the annual total sales or service revenue subject to the violation realized by the undertaking in the State during the last fiscal year (or, where such amount cannot be computed, a fine between AED 500,000 and AED 5 million). Separately, under Article 26, violating the standstill obligation in Article 13(2) carries a fine of not less than AED 50,000 and not more than AED 500,000. Conclusion As the UAE's merger control framework continues to mature, the question of whether a filing is required increasingly turns on careful identification of the relevant market(s) implicated by the transaction and the proper attribution of UAE sales and transaction shares to those market definitions. The Cabinet Resolution’s thresholds-AED 300 million in annual sales or a combined 40% market share-are applied by reference to the relevant market within the State, rather than by reference to aggregate global turnover. For multi-market transactions, parties should avoid the assumption that a single, group-wide turnover figure will conclusively determine the question of filing in all cases. A structured assessment-one that carefully examines the relevant market definitions, the parties’ activities within those markets in the UAE, and the statutory timing and standstill consequences-can materially reduce regulatory uncertainty and support efficient transaction execution. For further guidance on UAE merger control thresholds or assistance with transaction-specific competition assessments, please contact the Antitrust & Competition team at GLA & Co. Authors: Asad Ahmad, Partner , Khaled Abu Orabi, Senior Associate, Khaled Al Khashab, Associate.

UAE Merger Control Goes Live: What Dealmakers Need to Know About the New Executive Regulations

The UAE’s 2025 Overhaul of the Commercial Companies Law: What companies Need to Know

Federal Decree-Law No. 20 of 2025 introduces a wide-ranging set of amendments to the Commercial Companies Law (Federal Decree-Law No. 32 of 2021). The reforms clarify the interface between onshore and free-zone regimes, strengthen the legal framework for investment and governance, and provide greater flexibility in corporate structuring and capital arrangements. While free-zone entities remain subject to their own regulatory rules, the amendments bring the UAE’s corporate environment closer to international standards and enhance its usability for investors, founders and multinational groups operating in or from the UAE. This overview highlights the key changes and their practical implications for companies active in the UAE. 1) Clearer Scope Across Onshore, Free Zone and Foreign Companies The law now provides more explicit guidance on how it applies to foreign companies with a UAE presence and to free zone entities conducting activities outside their zone. Free zone companies continue to be governed by their own regulatory frameworks within the boundaries of the free zone; however, when they carry out activities in the mainland—whether through a branch, representative office, or otherwise—they must comply with the Commercial Companies Law and other applicable federal legislation. The amendments also confirm that free zone companies are considered UAE juridical persons for the purposes of UAE law. This clarification reduces long-standing uncertainty in cross-border structuring and offers greater predictability for groups operating across both mainland and free zone jurisdictions. 2) Introducing Non-Profit Companies For the first time, UAE company law expressly recognises non-profit companies. These entities must reinvest all revenues to advance their stated objectives and are prohibited from distributing profits to shareholders or partners. Detailed rules on their governance, permitted activities, licensing requirements and any regulatory exemptions will be issued at Cabinet level. Once implemented, this framework will provide a purpose-built legal vehicle for philanthropic, cultural, community and social initiatives, offering greater clarity and legitimacy for organisations pursuing non-commercial purposes in the UAE. 3) Common-Law Style Shareholder Rights Embedded in LLCs and PJSCs The amendments introduce statutory recognition of drag-along and tag-along rights for limited liability companies and private joint stock companies, allowing these mechanisms to be included directly in the memorandum or articles. This enhances enforceability, reduces reliance on side agreements, and increases certainty in exit and share-transfer scenarios—particularly relevant for M&A, venture capital, private equity, and family business restructurings. The detailed conditions and procedures for exercising these rights will be clarified through implementing regulations. Succession Planning for Shares Companies and shareholders may now agree in advance on how a deceased shareholder’s interest will be dealt with. These arrangements may include priority purchase rights for remaining shareholders or, importantly, acquisition of the shares by the company itself. The valuation may be agreed with the heirs or determined by the competent court, with independent valuation experts engaged in case of dispute. While this is a welcome development that provides greater certainty in succession planning, further guidance is expected on the post-acquisition treatment of such shares—specifically whether they may be held as treasury shares, cancelled, or reissued to third parties. 4) Greater Share Class Flexibility for LLCs Mainland LLCs can now issue multiple classes of shares with different voting, dividend, liquidation, redemption, and other rights. This represents a significant modernization that brings UAE practice closer to international standards commonly used in growth equity and venture financing. Cabinet-issued rules are expected to clarify the precise parameters, but the policy direction is clear: private companies now have the flexibility to structure their capital in line with strategic objectives. 5) In-Kind Capital Contributions The law reinforces the ability to make in-kind contributions to LLC capital, provided that , among other things ,such contributions are valued by one or more accredited valuers. If an accredited valuation is not obtained, the in-kind contribution will be considered invalid. This approach balances flexibility—particularly relevant for asset-intensive and technology-driven businesses—with safeguards against inflated or subjective valuations. 6) Private Placements by Private Joint Stock Companies Private joint stock companies may now raise capital through private placements within UAE financial markets, subject to the procedures and conditions set by the Securities and Commodities Authority. A private placement allows a company to sell shares or other securities directly to a limited group of investors—such as institutional investors or high-net-worth individuals—rather than through a public offering. This closes a historical gap in the fundraising pathway, enabling issuers to access domestic capital efficiently without relying on offshore structures or parallel vehicles. 7) Governance Continuity and Deadlock Solutions The amendments address day-to-day governance challenges that often arise in closely held entities. A manager’s resignation becomes effective after 30 days if the company takes no action, unless otherwise agreed. Companies must notify the competent authority when a manager’s term expires and appoint a successor within 30 days. Boards may continue to operate for up to six months after their term lapses to maintain operational continuity. If shareholders fail to appoint a new board, the competent authority may appoint directors who are not shareholders. This provides a practical mechanism to resolve deadlocks and restore functionality through a neutral or independent board composition. 8) A Unified Framework for Re-Domiciliation (Migration/Continuation) Perhaps the most transformative change is the introduction of a statutory framework for corporate migration (continuation) that preserves a company’s legal identity, contractual continuity, and corporate history. Companies can now re-domicile from foreign jurisdictions into the UAE, between mainland authorities, from mainland to free zones (including financial free zones) and vice versa, as well as between different free zones. This flexibility is subject to shareholder approval (typically via a special resolution or other prescribed majority), compatibility between registries, absence of prohibitive annotations or blocks, approvals from the relevant licensing authorities (and the Ministry of Economy or Securities and Commodities Authority where applicable), and compliance with the necessary publication and disclosure requirements. For regional groups and multinationals, this creates a powerful tool to realign licensing, tax, governance, and operational structures without the need for liquidation or reincorporation. Practical Implications for Companies The 2025 amendments reflect a deliberate shift toward a more adaptable, investor-friendly regime that builds on the UAE’s strengths in regulatory clarity. The ability to issue multiple share classes, embed drag-along and tag-along rights, structure thoughtful succession mechanisms, conduct private placements, and re-domicile across jurisdictions will simplify corporate life cycles and support more sophisticated capital formation. Companies operating across the mainland–free zone divide will benefit from clearer rules, while mission-driven organisations will finally have a fit-for-purpose legal vehicle for non-profit activities. The net effect is enhanced certainty for transactions and governance, fewer structural workarounds, and closer alignment with international practices. The UAE continues to position itself as a jurisdiction capable of hosting complex cross-border operations while maintaining the stability that underpins long-term investment and growth. Authors: Suzanne Hashem, Legal Director and Khaled Abu Orabi, Senior Associate

Online Food Delivery Platforms in the UAE: A Market Under Increasing Regulatory Scrutiny

The UAE's online food delivery sector has grown at an exceptional pace—yet largely in the absence of sector-specific regulatory oversight. That era has now ended. Two landmark instruments issued in early 2026 collectively establish a comprehensive compliance framework governing the conduct of digital food delivery platforms, their commercial relationships with food establishments, and their obligations towards consumers. The first is the Guidelines for Online Food Delivery Platforms in the Emirate of Dubai (the "Guidelines"), issued by the Dubai Corporation for Consumer Protection and Fair Trade ("DCCPFT") pursuant to its mandate under Dubai Law No. (5) of 2023—specifically Articles 5, 6, 8, and 9—and designed to be read in conjunction with Federal Decree-Law No. (36) of 2023 Regulating Competition and Federal Decree-Law No. (45) of 2021 Concerning the Protection of Personal Data. The second is Ministerial Resolution No. (32) of 2026, issued by the Minister of Economy and Tourism on 11 February 2026, which addresses exclusive dealing agreements between digital platforms and restaurants at the federal level—applicable across the entire UAE. These instruments now operate alongside Cabinet Resolution No. (59) of 2026, which establishes the Executive Regulations of the Competition Law and provides detailed procedural and substantive criteria governing enforcement—including the determination of dominant positions, the prohibition of excessively low prices, exemption notification procedures, complaint mechanisms, and investigation protocols. For market participants, these instruments signal that platform conduct will now be measured against enforceable standards of fairness, transparency, and competitive neutrality—not merely aspirational principles. What Do These Instruments Regulate? The Guidelines apply to all online food delivery platforms providing services—whether directly or through third-party providers—to food establishments and other business users operating within Dubai. Their objective is to establish a reference framework promoting compliance with principles of fairness, transparency, and responsible conduct in an industry characterised by significant information asymmetry and concentrated market power. The Ministerial Resolution is more surgical in scope: it targets a specific market dysfunction—exclusive dealing arrangements between platforms and restaurants—that regulators have identified as distorting competition in the food delivery market. In doing so, it operates pursuant to Article 11 of the Competition Law, which empowers the Minister to grant conditional exemptions from the general prohibition on restrictive agreements where the public economic interest so requires. The procedural framework for such exemptions is now detailed in the Executive Regulations, which require, inter alia, the submission of a comprehensive economic report demonstrating that the agreement or practice is necessary to promote economic development, improve competitiveness, develop production or distribution systems, or achieve specific consumer benefits—and that it substantially enhances overall economic efficiencies within the relevant market. Key Regulatory Requirements: Transparency and Contractual Fairness Enforcement attention under the Guidelines centres on the structural imbalance inherent in platform-restaurant relationships. Platforms are required to provide business users with clear, plain-language, uniformly applicable terms and conditions—accessible at all stages of the commercial relationship, including the pre-contractual phase. Any amendment to these terms requires a minimum of thirty days’ advance notice, coupled with an express right of termination for business users who do not consent to the changes; equally, any termination initiated by the platform must be preceded by thirty days' written notice stating the grounds for termination. Contracts between platforms and listed establishments must address, inter alia, the impact of the relationship on the establishment's ownership and control of its brand, content, data, and intellectual property; the criteria governing how listings are displayed to consumers—including the weighting of each ranking factor and disclosure of paid promotional placements; and the mechanisms by which establishments may access customer data in a usable and transferable form upon contract termination. The fee transparency obligations are equally granular. Platforms must disclose commission rate structures—including tiered rates, discounts, and variations—to all listed establishments and provide itemised monthly financial statements detailing gross revenue, commissions deducted, additional fees, final payouts, pending refunds, chargebacks, and settlement timelines. Marketing fees must be optional—they cannot be applied retroactively or through bundled charges without prior documented consent—and platforms are expressly prohibited from charging higher commissions arbitrarily on the basis of establishment size, location, or exclusivity status. On the consumer-facing dimension, platforms must present an itemised breakdown of all charges before checkout and are prohibited from imposing hidden post-payment fees. Gratuities must be transferred in full—one hundred percent—to delivery personnel without deduction, withholding, or reallocation. Exclusivity and Restrictive Agreements: The Core Competitive Concern The most consequential provisions in both instruments address exclusivity—the practice through which dominant platforms secure the sole listing rights of food establishments, thereby foreclosing competitors and limiting consumer choice. The Guidelines establish a general prohibition: food establishments have an unqualified right to list, operate, and promote their services on multiple platforms without facing penalties, restrictions, or commercial disadvantages of any kind—whether through direct contractual clauses or indirect deterrents such as increased fees, reduced algorithmic visibility, delayed payments, or discriminatory treatment. Platforms must not penalise multi-homing, and any conduct designed to suppress competition or resulting in its suppression—including manipulating consumer choices through biased rankings favouring exclusive partners—is expressly prohibited as constituting, in its subject, purpose, or impact, a distortion of competition. The Guidelines do permit limited exclusivity arrangements, but only where a series of cumulative conditions are met: the arrangement must be genuinely voluntary, free from any form of coercion; the food establishment must receive demonstrable and fair compensation—such as genuinely reduced commission rates reflecting actual cost savings or enhanced marketing support; and the establishment must retain the right to terminate on reasonable terms, with a cooling-off period of six months for arrangements of twelve months or longer in total duration. The Ministerial Resolution introduces a crucial federal overlay. Pursuant to Article 11 of Federal Decree-Law No. (36) of 2023, it grants a strictly conditional exemption to exclusive dealing agreements from the prohibitions under Articles 5, 6, and 7 of the Competition Law. The conditions are exacting: agreements must be entered into freely and without coercion; the term of exclusivity may not exceed twelve months from the Resolution's effective date; no more than ten percent of a platform's total listed restaurants may be subject to exclusive agreements; exclusive arrangements must not obstruct partnerships with start-up or small and medium-sized platforms; any commission discounts linked to exclusivity must be demonstrably justified by genuine cost savings or added value, subject to verification and audit; and post-exclusivity non-compete clauses are expressly prohibited. The exemption is valid for twelve months and is non-renewable absent a further ministerial resolution. Non-compliance triggers administrative penalties under Article 23 of the Competition Law or, where appropriate, referral to the competent court for the imposition of criminal sanctions under Article 24. The penalties for violations of Articles 5, 6, 7, and 8 of the Competition Law include fines of not less than AED 100,000 and up to ten percent of the violating undertaking’s annual total sales in the UAE for the preceding fiscal year. Platform Fairness, Data Protection, and Self-Preferencing Beyond exclusivity, the Guidelines address a constellation of platform conduct concerns that will be familiar to practitioners who have followed the evolution of digital markets regulation internationally. Platforms must obtain free, specific, informed, and unambiguous opt-in consent before collecting, using, processing, or sharing consumer personal data for commercial purposes—with consent revocable at any time without adverse consequence—and are prohibited from selling, renting, or transferring personal data to third parties without explicit and informed consent. These requirements align with Federal Decree-Law No. (45) of 2021 Concerning the Protection of Personal Data, which mandates that consent be clear, simple, unambiguous, and easily accessible, and that the data subject retain the right to withdraw consent at any time. Platforms must not give preferential treatment to their own brands, affiliated cloud kitchens, or related entities in ranking, listing, or recommendation algorithms—a prohibition on self-preferencing that mirrors emerging international standards. The use of non-public business user data—including order details, pricing, customer behaviour, and sales trends—to develop, market, or improve a platform's own competing products or services is expressly prohibited. Interoperability requirements further constrain platform conduct: open access to application programming interfaces must be provided on fair, non-discriminatory terms; platforms may not impose unfair technical barriers, force proprietary services, or charge integration fees to compliant food establishments. Enforcement Architecture The enforcement framework contemplates multiple layers of accountability. Platforms must maintain transparent, time-bound dispute resolution processes—including independent mediation through approved bodies—with unresolved disputes subject to referral to the DCCPFT. Consumer complaints concerning misleading or hidden charges must be acknowledged within three working days and resolved within seven. The DCCPFT retains authority to request periodic reports, system logs, and complaint data to verify ongoing compliance. At the federal level, the Ministerial Resolution invokes the full enforcement apparatus of the Competition Law: administrative penalties under Article 23 and criminal referral under Article 24 where warranted. The Executive Regulations further empower the Ministry or the relevant authority to undertake investigation procedures on its own initiative—without the need for a formal complaint—where it obtains evidence indicating reasonable grounds and sufficient data regarding practices that may harm, restrict, or prevent free and fair competition. The Executive Regulations also authorise periodic market monitoring and empower authorities to request data from undertakings as part of ongoing oversight. The combined effect is a dual-track enforcement architecture—sector-specific oversight at the emirate level operating alongside federal competition enforcement—that creates meaningful compliance risk for platforms that fail to adapt. Implications for Market Participants For platform operators, these instruments demand a fundamental reassessment of existing commercial models. Exclusivity arrangements must be restructured to comply with both the twelve-month cap and the ten percent threshold; commission structures require full transparency and documented justification; data practices must be brought into alignment with both the Guidelines and Federal Decree-Law No. (45) of 2021 Concerning the Protection of Personal Data; and algorithmic ranking systems must be auditable and free from undisclosed commercial influence. Under the Executive Regulations, the criteria for establishing a dominant position now expressly encompass the existence of exclusive or long-term relationships with customers or suppliers that may reinforce an undertaking's market power, as well as technological superiority, business model advantages, and the ability to act independently of market pressures—all factors directly applicable to major food delivery platforms. For food establishments, the new framework provides an enforceable legal basis for challenging unfair platform practices—whether relating to exclusivity coercion, opaque fee structures, data access restrictions, or discriminatory algorithmic treatment. The practical question is no longer whether such protections exist, but how effectively establishments will invoke them. For legal practitioners, the convergence of competition law, consumer protection, data privacy, and sector-specific platform regulation in a single market creates a compliance environment of considerable complexity. Advisory mandates in this sector will increasingly require integrated analysis spanning multiple regulatory frameworks—a departure from the siloed approach that has historically characterised platform compliance in the UAE. Looking Ahead The regulatory trajectory is unmistakable. The UAE is moving towards a more sophisticated, enforcement-capable platform governance environment—one in which actual market conduct, rather than formal compliance documentation, will determine regulatory outcomes. The legal framework now provides clearer rules governing platform transparency, exclusivity, data use, and competitive neutrality, with substantive thresholds and procedural requirements that align with emerging international best practice in digital markets regulation. Market participants should expect these standards to be actively enforced. The DCCPFT's Guidelines and the Ministerial Resolution are not aspirational documents—they are the foundation of a regulatory regime designed to ensure that the UAE's food delivery market operates on principles of genuine competition, transparency, and fairness. These developments merit close attention from all stakeholders in the digital economy. This article is for general information only and does not constitute legal advice. Authors: Asad Ahmad, Partner and Head of Antitrust & Competition and Khaled Abu Orabi, Senior Associate

The UAE Artificial Intelligence and Data Authority: What It Means for AI, Data, and Digital Governance

Introduction On 14 June 2026, H.H. Sheikh Mohammed bin Rashid Al Maktoum approved the establishment of the UAE Artificial Intelligence and Data Authority (the “Authority”). The Authority is a single national body reporting directly to the UAE Cabinet, with responsibility for artificial intelligence, data governance, and digital government across the federation. This is a significant institutional development. It is not, however, the introduction of a standalone artificial intelligence law. Organisations operating in the UAE should understand both what has changed and what remains to be determined. What Has Changed The Authority consolidates functions previously held by three separate bodies: The Office of Artificial Intelligence, Digital Economy and Remote Work Applications; the Digital Government Sector within the Telecommunications and Digital Government Regulatory Authority (“TDRA”); and the UAE Data Office. The Authority will be chaired by Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications. By merging overlapping mandates into a unified structure under Cabinet, the UAE has signaled that it views AI strategy, data policy and digital government as a single governance challenge rather than parallel workstreams. Mandate and Scope Based on official announcements, the Authority’s mandate includes: developing and leading the national AI strategy; increasing the digital economy’s contribution to GDP; managing government data to improve quality, availability, and cross-entity sharing; operating AI-powered national data platforms; setting standards and guidelines for data management, AI deployment, digital transformation, and government services; ensuring compliance across federal entities; supporting cybersecurity and government information security; and strengthening international coordination and partnerships. At this stage, the publicly stated mandate is primarily federal-government-facing. It should not be assumed that the Authority already exercises direct regulatory or enforcement powers over the private sector. Whether such powers will follow—and in what form—remains an open question. Why It Matters: From Strategy to Coordinated Implementation The UAE has, for several years, pursued an ambitious AI and digital economy agenda. The UAE Strategy for Artificial Intelligence supports the UAE Centennial 2071 programme, and in April 2026, the Cabinet announced an objective to transition 50 per cent of federal government sectors, services, and operations to agentic (autonomous) AI within two years. Until now, that agenda was delivered through a combination of national strategies, sector-specific rules, emirate-level initiatives, and free-zone frameworks. This approach allowed flexibility and rapid adoption but risked fragmentation, inconsistency, and gaps—particularly as AI systems become more complex and their data requirements more demanding. The Authority represents a shift from strategy and experimentation toward coordinated institutional governance. Centralising AI, data and digital government policy in a single body creates the conditions for unified standards, consistent oversight and integrated compliance—even before new legislation is introduced. The Current Legal Position: No Horizontal AI Statute The UAE does not currently have a single comprehensive horizontal AI law comparable to the EU AI Act. The legal and regulatory framework for AI and data in mainland UAE comprises several layers: Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data (the “PDPL”), in effect since January 2022, which applies to personal data processing in onshore UAE (excluding DIFC and ADGM); federal cybercrime legislation; sector-specific regulatory requirements (e.g., Central Bank, Securities and Commodities Authority, and Department of Health guidelines on AI/technology adoption); free-zone data protection regimes in DIFC and ADGM, which operate independently of the federal PDPL; the UAE Charter for the Development and Use of Artificial Intelligence, a non-binding instrument emphasising transparency, accountability, human oversight, safety, privacy, and compliance with existing legislation; and emirate-level initiatives and smart-city strategies. Notably, the implementing regulations for the PDPL have not been formally issued as of the date of this article, and the enforcement regime remains uncertain. Practitioners should continue to monitor regulatory developments closely. Distinguishing the Authority from a Comprehensive AI Law The creation of an institutional authority is distinct from the promulgation of a binding legislative framework. The Authority may in due course develop regulations, mandatory standards, certification requirements, or procurement frameworks, but the legal instruments, scope, obligations, and enforcement mechanisms have not yet been published. Organisations should treat this as a signal of regulatory direction, not the enactment of immediate new compliance obligations. Data Governance as the Foundation for AI Governance The consolidation of data policy within the Authority underscores a fundamental point: AI governance is inseparable from data governance. Any regulatory framework addressing AI deployment must address the quality, provenance, security, availability, and lawful processing of the data on which AI systems rely. For organisations operating in the UAE, the practical implication is that readiness for future AI regulation begins with data readiness—including compliance with the PDPL, robust data quality and lineage practices, defensible cross-border transfer mechanisms, and security measures proportionate to the sensitivity and volume of data processed. Practical Impact for the Private Sector Although the Authority’s stated mandate is currently focused on the federal government, private-sector organisations should not regard this as irrelevant. In practice: Vendors and contractors supplying AI systems, cloud services, or data platforms to government are likely to face new procurement standards, certification, or audit requirements as the Authority operationalises its mandate. Organisations holding or processing government data may be subject to enhanced data-quality, sharing, and security expectations. Standards developed for the public sector frequently become de facto benchmarks that shape private-sector practice, investor expectations, and contractual requirements. Future regulatory instruments issued by the Authority may extend obligations to private-sector actors, particularly in higher-risk domains. It is premature to state that new binding obligations have been imposed on the private sector. However, proactive preparation is commercially prudent. Sectoral and Free-Zone Considerations Sector-specific and free-zone regulatory frameworks remain in force. AI and data-related obligations in the financial sector (Central Bank, SCA, DFSA, and FSRA), healthcare (Department of Health and DHA), and telecommunications (TDRA) continue to apply alongside federal-level developments. DIFC and ADGM maintain independent data protection regimes. The interaction between the Authority’s future outputs and existing sectoral and free-zone rules is not yet defined. Organisations subject to multiple regulatory regimes should monitor for any statements of coordination, primacy or mutual recognition. What Remains Unclear Key questions that have not yet been answered by official sources include: the legal instrument(s) through which the Authority will exercise its mandate (federal decree, regulation, binding standards, guidance, or procurement frameworks); whether the Authority will have direct enforcement powers, and if so, over which entities (federal, private sector, or both); how the Authority will interact with existing federal, emirate-level, and free-zone regulators; whether future outputs will take the form of binding regulation, voluntary codes, certification schemes, or contractual procurement standards; and the timeline for publication of further instruments. Practical Steps for Businesses Organisations operating in the UAE—particularly those deploying AI, processing large volumes of data, or contracting with government entities—should consider the following steps: Conduct an AI use-case inventory: Identify where AI is deployed across the organisation, including third-party tools and embedded AI features. Map data flows: Understand what personal and non-personal data feeds AI systems, where it is stored, how it is processed, and on what lawful basis. Review privacy and security controls: Ensure compliance with the PDPL (to the extent operational) and applicable sector-specific requirements. Audit vendor and procurement contracts: Assess whether existing arrangements with AI/data suppliers anticipate regulatory change, certification requirements, and audit rights. Establish AI governance policies: For higher-risk applications, include human oversight, bias testing, transparency, and record-keeping obligations. Monitor Authority publications: Subscribe to official channels for new standards, guidance, and consultation papers. Engage with consultation processes: Participate in industry consultations as they emerge. Conclusion The establishment of the UAE Artificial Intelligence and Data Authority is a clear institutional signal that AI, data, and digital government will be governed as an integrated discipline at the national level. It does not, in itself, create new legal obligations—but it creates the institutional infrastructure from which such obligations are likely to follow. For boards and senior management, the message is straightforward: AI and data governance should be treated as a board-level priority, not solely a technology function. Organisations that invest now in responsible AI practices, data governance and regulatory preparedness will be better positioned to meet future requirements—and to demonstrate to government counterparts, investors and clients that they take these issues seriously. Authors: Asad Ahmad, Regional Head of Regulatory and Khaled Abu Orabi, Senior Associate.

Cash Pooling in the UAE: Compliance, Restrictions, and Opportunities

Executive Summary Cash pooling remains a valuable treasury technique for UAE corporate groups to optimise liquidity, reduce external financing costs, and centralise cash and risk management. In the UAE, the prudential recognition of cash pooling is driven primarily by Central Bank of the UAE (CBUAE) prudential standards, which expressly recognise physical pooling subject to strict conditions. From a tax perspective, the Federal Tax Authority’s (FTA) Transfer Pricing Guide acknowledges both physical and notional pooling and sets expectations for arm’s length remuneration and documentation. This article synthesises these frameworks and clarifies what is recognised and required in practice, including recent legislative developments affecting the financial regulatory landscape. What Is Cash Pooling and Why It Matters Cash pooling is a treasury arrangement under which a corporate group aggregates cash surpluses and deficits among participating entities to optimise net interest, minimise external borrowing, and centralise liquidity management. In the UAE, this frequently occurs among “related parties” as defined under Article 35 of the Corporate Tax Law, which captures association through ownership or control thresholds. Well‑structured pooling can create material synergies but also engages regulatory, prudential, tax, and documentation requirements. The practical feasibility of a given pooling model depends on whether it is recognised within CBUAE prudential standards when delivered as a bank product, and on whether the intra‑group flows and pricing satisfy the UAE’s transfer pricing rules and documentation obligations. Regulatory Framework: Recognition and Boundaries The UAE treats cash pooling through two complementary lenses: Banking prudential recognition and product delivery under CBUAE rules; and Arm’s length pricing and documentation under the Corporate Tax Law and FTA Transfer Pricing Guide. CBUAE prudential standards expressly recognise physical pooling delivered as a banking product. The standards require that only licensed UAE banks may extinguish and consolidate balances. Corporates should not attempt to replicate physical pooling off‑platform or outside a licensed bank product. In addition, CBUAE’s leverage ratio guidance clarifies how cash pooling is treated when a bank aggregates participating customer accounts into a single balance with daily transfers and no continuing liability for individual balances once transferred. This supports the prudential treatment of physical pooling when configured to extinguish participant balances into a central account. By contrast, notional pooling—an arrangement that virtually offsets balances without physically moving funds—is not described in CBUAE prudential standards as a recognised bank product for prudential purposes. This does not, however, preclude discussion of notional pooling in the FTA’s transfer pricing context. As such, corporate groups should understand that, in practice, UAE banks generally offer physical pooling products calibrated to CBUAE conditions; where “notional” features are discussed for tax purposes, these are subject to bank product availability, enforceability of set‑off, and compliance with CBUAE prudential constraints. Finally, in light of the enactment of a new CBUAE law in 2025 consolidating and modernising financial sector regulation, existing CBUAE regulations, standards and circulars continue to apply until replaced. As of the date of this article, the capital adequacy and leverage ratio standards cited below remain the operative prudential references for cash pooling features. Physical Pooling: Conditions and Practical Requirements Under CBUAE’s capital adequacy and leverage ratio standards, physical pooling is recognised when provided by a licensed bank and configured to meet specific conditions. In practice, UAE banks structure such products to satisfy the following core requirements: Single central account and extinguishment of balances. Balances of participating accounts must be transferred into a single central account. Once transferred, the participating accounts’ balances are extinguished and the bank should not be liable on an individual account basis for those balances. The central account reflects the consolidated net position. Bank’s enforceable right and discretion to transfer. The bank must have a legally enforceable and unconditional right to sweep and consolidate balances into the central account, with discretion to exercise that right when necessary. Transfer frequency. Transfers should occur at least daily, or at a frequency the CBUAE would consider adequate for genuine liquidity centralisation and extinguishment. No maturity mismatches. All participant balances swept into the pool must be on demand or overnight. Maturity mismatches among pooled balances are not permitted. Interest and fees on the consolidated balance. The bank should apply interest and fees based on the consolidated central balance, not on the pre‑sweep individual account balances. Delivery only through a licensed bank product. Only UAE licensed banks may operate physical pooling arrangements that extinguish and consolidate balances. Corporate‑operated arrangements outside the banking framework do not meet the prudential conditions and should be avoided. These features are consistent with the leverage ratio treatment that deems participating accounts extinguished into a single balance where daily transfers occur and the bank is not liable at the individual account level upon transfer. Corporate treasury teams should ensure that bank documentation and operational flows reflect these conditions and that there is clarity on the bank’s rights, daily sweep mechanics, and liability posture. Notional Pooling: Tax Recognition vs. Prudential Constraints The FTA’s Transfer Pricing Guide recognises both physical and notional pooling for purposes of arm’s length analysis. Notional pooling allows interest optimisation through virtual aggregation without physical transfers, and banks may require cross‑guarantees to permit set‑off across participant accounts. However, the prudential framework relevant to UAE banks expressly describes physical pooling, and UAE bank products are calibrated to those prudential standards. In practice: Access to notional pooling features depends on whether a UAE bank offers a product that aligns with CBUAE prudential requirements (including enforceable set‑off and no maturity mismatches), and whether the bank can avoid retaining individual account liability after set‑off. Where an arrangement functions purely notionally without daily extinguishment of individual balances into a central account, it may not satisfy the prudential conditions that underpin recognised physical pooling and may therefore not be available as a bank product in the UAE onshore market. For tax and transfer pricing purposes, the existence of a notional pool within a group may still be analysed under the FTA Guide. But feasibility in the UAE market turns on whether a bank product exists that can be operated consistently with CBUAE prudential requirements. As a result, UAE corporate groups generally employ physical pooling products offered by local banks. Arm’s Length Principle and Pricing in Cash Pooling The Corporate Tax Law adopts the arm’s length principle for related party and connected person transactions. The FTA Transfer Pricing Guide provides specific guidance for financial transactions, including cash pooling, and aligns with international standards. Key implications for pooling: Characterise the treasury function. The cash pool leader’s remuneration depends on the actual functions performed, assets used, and risks assumed. A leader performing routine coordination, reporting, basic cash forecasting and limited risk should generally receive a routine service return. Where the leader manages external bank relationships, optimises interest, or bears contingent liability risks, a higher return, often through an interest spread, may be justified. Allocate synergy benefits. Pool members should receive arm’s length interest for debit and credit positions. The selection of interest benchmarks and spreads should reflect market conditions, group credit profile, collateral, tenor, and any guarantees or set‑off rights. After remunerating the leader, any synergy benefits should be allocated among participants via the pricing mechanism. Align with bank product economics. Because UAE pooling must be delivered through a bank product, the pricing of intra‑group debit and credit positions should consider external bank charges/credits on the consolidated balance and any fees for the pooling service. The internal pricing model should reflect the net economics of the third‑party banking arrangement. Cross‑guarantees and set‑off. In arrangements with cross‑guarantees or set‑off rights, the impact on risk allocation and pricing should be explicitly considered. If a member’s deficits are effectively supported by other participants, the pricing for deficit positions should reflect the altered risk profile. Transfer Pricing Documentation Article 55 of the Corporate Tax Law permits the FTA to require disclosure of related party transactions. The FTA Transfer Pricing Guide outlines the documentation suite: Disclosure Form. Mandatory for taxable persons with material related party or connected person transactions, including intercompany financing and cash pooling. Master File and Local File. Required for “major businesses” under Ministerial Decision No. 97 of 2023, providing group‑level information and local testing of intercompany arrangements, including pooling. Country‑by‑Country Report. Applicable for MNE groups meeting the revenue threshold under Cabinet Resolution No. 44 of 2020. Additional Information. The FTA may request contemporaneous records supporting the arm’s length nature of pooling pricing and allocations, including benchmarking and functional analysis of the treasury entity. Even where a Master File and Local File are not required, taxpayers must keep reasonable records substantiating the arm’s length character of pooling transactions. Cross‑Border Considerations The UAE’s liberal foreign exchange regime and absence of general capital controls permit cross‑border pooling structures without routine prior approval. However: Banking channel. Cross‑border pooling still must be implemented through a licensed bank product that complies with CBUAE prudential requirements for UAE participants. Withholding and treaty positions. Cross‑border interest flows within pooling should be reviewed for domestic law characterization and applicable treaty relief. Free zone entities. Where free zone entities participate, particular attention is needed to maintain any preferential tax regime conditions and to ensure that transfer pricing, substance, and other eligibility criteria are preserved. Economic substance and outsourcing. If pooling centralises activities into a treasury entity, consider whether additional substance or outsourcing controls are triggered, especially where key activities or systems are located outside the UAE banking channel. While pooling is delivered through a bank product, internal treasury processes and decision‑making may still raise group‑level governance or substance considerations. Practical Implementation Guide for UAE Groups In structuring a compliant and efficient cash pool: Select a UAE bank product that expressly delivers physical pooling meeting CBUAE conditions, including daily transfers, enforceable sweep rights, consolidated interest, and no maturity mismatches. Ensure bank documentation and corporate intra‑group agreements are aligned. The bank’s enforceable rights and operational mechanics should be mirrored in intercompany policies and agreements that govern participant obligations, pricing, and allocations. Design an arm’s length pricing policy for debit and credit positions, benchmark the pool leader’s remuneration based on performed functions and assumed risks, and document the basis for synergy allocation. Maintain robust transfer pricing documentation, including the Disclosure Form, and where required, Master File and Local File, supported by contemporaneous benchmarking and functional analysis. Monitor regulatory updates. The new 2025 CBUAE law consolidates financial regulation and preserves existing regulations until replaced. Maintain awareness of any CBUAE circulars or standards that further specify liquidity management, large exposures, or related party banking that could indirectly affect pooling features or bank permissions. Conclusion In the UAE, the practical route to cash pooling is through CBUAE‑compliant physical pooling products offered by licensed banks. Prudential standards recognise physical pooling under clear conditions—daily transfers into a single central account, enforceable bank sweep rights, extinguishment of participant balances upon transfer, on‑demand or overnight tenors, and consolidated interest. The FTA’s Transfer Pricing Guide requires that pooling be priced at arm’s length, with appropriate remuneration for the pool leader and fair allocation of synergies to participants, supported by contemporaneous documentation. Implemented properly, a UAE cash pool can materially enhance liquidity efficiency while maintaining regulatory and tax compliance. The key is to align the bank product’s prudential features with a robust intra‑group pricing and documentation framework that reflects actual functions, risks, and external economics. Authors: Ashraf Hendi, Partner and Maryam Tarek, Associate.

Navigating Hotel Management Agreements in Dubai: Key Legal Risks and Owner Protections

Entering into a hotel management agreement (“HMA”) in Dubai is a high-stakes decision for any property owner. The emirate’s hospitality sector operates under a complex regulatory framework overseen by multiple authorities, including the Dubai Department of Economy & Tourism (“DET”), Dubai Civil Defence, the UAE Federal Tax Authority, and various federal labour and data-protection regulators. While hotel managers oversee day-to-day operations, the ultimate responsibility for legal and regulatory compliance almost always rests with the property owner. 1. Licensing and Regulatory Compliance One of the most significant challenges for owners lies in licensing and operational compliance. Hotel operating licences and related permits are typically issued in the owner’s name, which makes the owner directly liable for renewals, record-keeping, and any violations—even when the management company is at fault. To mitigate this exposure, the HMA should: Acknowledge the owner as the licence holder; Obligate the manager to comply with all operational regulations and filing deadlines; Require the prompt provision of supporting documents; and Include robust indemnities and audit rights so that any fines caused by the manager’s actions can be recovered. 2. Financial and Tax Compliance Financial compliance presents another layer of complexity. Hotel managers typically collect the Tourism Dirham fee, municipality service charges, and VAT on behalf of the owner. However, it is the owner who remains the taxable person responsible for filings and remittances. Any misreporting can result in significant penalties. An effective HMA should therefore: Require detailed reconciliations and regular tax reports; Include warranties regarding the manager’s accounting systems and tax codes; Provide indemnities and clear audit rights to ensure transparency and accountability. 3. Health, Safety, and Employment Obligations Dubai enforces strict health and safety standards under the UAE Fire and Life Safety Code and other municipal regulations. Violations can lead to fines, closures, or costly remediation orders. The agreement should: Assign daily safety compliance duties to the manager; Mandate comprehensive record-keeping; and Grant the owner step-in rights and cost-recovery mechanisms in cases of manager negligence. Employment compliance is equally important. If the owner is the employer of the hotel workforce, they are liable for payroll, visa sponsorship, and end-of-service gratuities. The HMA should clearly specify: The employer of record; The manager’s obligations under Federal Decree-Law No. 33 of 2021 and MoHRE regulations; and Indemnities covering any breach of employment laws. 4. Financial Reporting and Insurance Transparent and consistent financial reporting is fundamental to every successful HMA. Without it, owners risk revenue discrepancies, tax errors, and operational disputes. To prevent these risks, the HMA should: Mandate standardized monthly and annual financial reports; Grant the owner direct access to management and accounting systems; Require independent audits; and Include data migration and system integration provisions to ensure business continuity upon termination. Insurance provisions also warrant careful drafting. The owner should be: Named as an additional insured on all policies; Provided with proof of renewal annually; and Protected by clauses excluding liability caps for regulatory fines, gross negligence, and wilful misconduct. 5. Ownership and Management Changes Changes in ownership or management can trigger regulatory complications. Transfers of ownership or control often require prior approval from DET or other authorities. Failure to secure such approval can affect the status of the property’s operating licences. To manage these scenarios, the HMA should: Require written notice of any change; and Mandate cooperation in obtaining regulatory approvals. 6. Data Protection and Cybersecurity Hotels manage large volumes of personal and financial data, making compliance with privacy laws critical. HMAs must adhere to the UAE Personal Data Protection Law (Federal Decree-Law No. 45 of 2021) and, where applicable, the DIFC Data Protection Law. Key data-protection provisions should include: A data-processing addendum defining roles, transfer restrictions, and breach-response procedures; Compliance with global payment-card standards (PCI-DSS); and Integration of anti-money-laundering (AML) and counter-terrorist-financing (CTF) obligations under Federal Decree-Law No. 20 of 2018, supported by cyber-insurance coverage and immediate breach-notification duties. 7. Performance Tests and Capital Expenditure Performance tests are critical owner protections. Without objective benchmarks—such as Revenue per Available Room (RevPAR) or Gross Operating Profit (GOP)—owners risk being locked into underperforming management arrangements. An HMA should therefore establish: Measurable performance metrics; Defined cure periods and termination rights; and Step-in rights for the owner in cases of significant non-compliance. For capital expenditure (capex), the agreement should: Distinguish routine maintenance from capital projects; Create a Furniture, Fixtures & Equipment (FF&E) reserve (typically 3–5% of gross revenue); and Require annual capex plans subject to owner approval. 8. Governing Law and Dispute Resolution The governing law and dispute-resolution mechanism are key strategic considerations. Many owners choose UAE law and the jurisdiction of the Dubai Courts, while others prefer arbitration—for instance, under the Dubai International Arbitration Centre (DIAC) or DIFC-LCIA—to ensure neutrality and enforceability. Conclusion HMAs in Dubai require more than sound commercial terms—they demand a carefully structured legal framework that anticipates regulatory complexity and allocates risk with precision. Owners who put in place strong legal protections, including indemnities, audit rights, performance standards, and compliance obligations, position themselves to safeguard their investment and maintain operational excellence in one of the world’s most competitive hospitality markets. Authors: Suzanne Hashem, Legal Director and Khaled Abu Orabi, Senior Associate.

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Force Majeure and Unforeseen Circumstances in Dubai Real Estate

Off-Plan and Secondary Market Contracts in Times of Geopolitical Disruption Periods of regional instability in early 2026 — including airspace restrictions, disruption to commercial shipping routes through the Strait of Hormuz, and broader geopolitical uncertainty — have introduced volatility into Dubai’s real estate market. Market participants have reported delays in site visits, transaction timelines, and investment decision-making. For buyers, developers, and investors holding positions in both off-plan and completed property contracts, the immediate legal question is whether such events trigger force majeure or hardship protections — and what that means for contractual obligations. The Legal Framework: Two Distinct Doctrines Dubai real estate contracts operate within a layered legal architecture comprising the UAE Civil Code, Dubai-specific legislation administered by the Dubai Land Department ("DLD") and the Real Estate Regulatory Agency ("RERA"), and the contractual terms of individual Sale and Purchase Agreements ("SPAs"). Force majeure is governed by Article 273 of the current UAE Civil Code (corresponding to Article 236 of the new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, effective 1 June 2026). It applies where an external event renders contractual performance objectively impossible — not merely more expensive or commercially unattractive. When force majeure is established, the obligation may be extinguished by operation of law and the contract may be subject to rescission, depending on the circumstances and judicial determination where disputed. The new law addresses different forms of impossibility, including total, partial, and temporary impossibility, and provides corresponding remedies depending on the nature and extent of the disruption. On the other hand, the concept of Unforeseen Circumstances (or Hardship) is governed by Article 249 of the current Civil Code (corresponding to Article 224 of the new law). This applies where exceptional, general circumstances arise after the conclusion of the contract, making performance excessively onerous and threatening the debtor with serious loss — although performance remains technically possible. Under the new law, the court may reduce the onerous obligation to a reasonable limit or rule for rescission of the contract, and any agreement to the contrary is void. The distinction matters enormously. Rising construction costs, repriced war-risk insurance, and rerouted supply chains make performance more expensive — in other words, hardship. A government order physically closing construction sites or legally preventing performance — that may amount to force majeure. UAE courts have consistently drawn this line with care. Off-Plan Contracts: Where the Pressure Is Greatest Off-plan property in Dubai represents a substantial proportion of transactions and is the segment most directly exposed to geopolitical disruption. These contracts depend on sustained construction progress, continued supply chain access, and staged buyer payments linked to verified milestones. Dubai's off-plan regulatory framework, principally Law No. 13 of 2008 (as amended by Law No. 19 of 2017 and Law No. 19 of 2020) and Law No. 8 of 2007 concerning escrow accounts, provides structural protections. All buyer payments must be deposited into RERA-approved escrow accounts, and developers may only withdraw funds upon verified construction milestones audited through the applicable regulatory framework. Under the escrow regime, investor funds remain protected within project escrow accounts subject to regulatory supervision, even where projects face delay. Disruption to global shipping, logistics, labour availability, or supply chains may be considered within force majeure provisions where contractual and legal requirements are satisfied. However, the DLD and courts assess each case individually, scrutinising whether the delay genuinely stems from an uncontrollable external event or from developer negligence, poor planning, or pre-existing delay. For buyers holding off-plan contracts, the critical question is whether a developer's delay in handover — caused by material shortages, labour disruption, or logistics constraints arising from regional instability — entitles the developer to an extension of time or excuses the developer from liability. The answer depends on the SPA's force majeure clause, the specific causal link between the external event and the delay, and whether the developer has complied with notice and mitigation obligations. For developers, the statutory framework is demanding. Force majeure is a defence to late delivery, but it requires strict proof that the event was unforeseeable, unavoidable, and rendered performance genuinely impossible or legally prevented. A developer who was already behind schedule before the external event arose — as recognised in UAE Court of Cassation jurisprudence, including Judgment No. 479 of 2021 — may face difficulty attributing the delay to force majeure where the delay pre-dated the disruptive event. Secondary Market and Completed Property Contracts For completed property transactions — sales between private parties, lease agreements, and property management arrangements — the force majeure analysis is different. The sale of a completed unit does not depend on construction progress, and the payment of purchase consideration is typically a straightforward financial obligation. UAE courts have generally held that financial obligations are rarely excusable on force majeure grounds. An inability to pay due to economic difficulty, market downturn, or reduced rental income does not usually constitute impossibility of performance. In such cases, the hardship doctrine under Article 249 is more likely to be relevant, although its threshold remains high. Lease contracts in Dubai, governed by Law No. 26 of 2007 and Law No. 33 of 2008, are similarly difficult to excuse on force majeure grounds. Rent generally remains payable unless a government order or comparable legal restriction physically prevents use of the premises. Reduced footfall, lower tourism numbers, or a general economic slowdown do not make rent payment impossible — they make it harder. Hardship arguments may support renegotiation or judicial rebalancing in appropriate circumstances, but they do not guarantee relief. Practical Implications for Market Participants In light of the current situation, parties to Dubai real estate contracts may wish to consider the following actions: Review your SPA or lease agreement now. Identify the force majeure clause, its qualifying events, notice periods, and whether payment obligations are excluded from relief. Many SPAs define force majeure narrowly; others include broader language covering war, armed conflict, government restrictions, supply disruption, and related events. The availability of relief depends primarily on the contractual wording. Issue notices promptly. Contractual notice deadlines — often 14 to 28 days — are typically strictly enforced. Missing a notice deadline can be fatal to a claim, regardless of its substantive merit. Under Article 221 of the new law (Article 246 of the current Civil Code), contracts must be performed in good faith, and timely communication with counterparties is part of prudent legal and commercial conduct. Document the causal link. UAE courts require specific, direct evidence linking the external event to the contractual obligation that cannot be performed. Government circulars, supplier correspondence confirming disruption, freight quotations demonstrating cost increases, and insurance correspondence may all be relevant. General references to regional instability will not suffice. Classify the problem correctly. Ask whether performance is impossible or merely more expensive. If construction materials cannot physically enter the country or legal restrictions prevent performance, that may support a force majeure argument. If materials remain available but at significantly higher prices, that is more likely hardship territory — and the remedy is judicial rebalancing rather than automatic termination. Verify escrow compliance. For off-plan holdings, the RERA Oqood system allows verification of construction progress and escrow account status. Any concern regarding escrow withdrawals or project progress should be reviewed promptly against the applicable regulatory requirements. Conclusion Dubai's real estate market has demonstrated resilience through previous periods of financial stress, regional instability, and global disruption. The structural safeguards present today — including regulatory oversight, mandatory escrow frameworks, relatively high levels of equity-funded transactions, and more disciplined project financing structures — provide additional stability compared to earlier market cycles. However, the legal framework is unforgiving for those who fail to act. Force majeure under UAE law requires genuine impossibility or legal prevention of performance, not mere commercial difficulty. The hardship doctrine offers a safety net but demands a high evidentiary threshold. The new Civil Transactions Law — with its treatment of different forms of impossibility, its mandatory hardship protection that cannot be contracted away, and its clearer articulation of good faith and judicial rebalancing — will shape the legal landscape from 1 June 2026 onward. For buyers, developers, landlords, and investors alike, the message from both legislation and caselaw is the same: review your contracts, document the impact, act on notice obligations, and classify the situation with precision. The difference between a successful claim and a failed one often lies not in the severity of the disruption, but in the quality of the evidence and the accuracy of the legal analysis. Authors: Dean Jaloudi, Partner and Khaled Abu Orabi, Senior Associate.

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