Maktoum bin Mohammed issues resolution for the formation of a Family Business and Family Ownership Disputes Settlement Committee

Under the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance and Chairman of the Dubai Judicial Council, has issued a resolution for the formation of a ‘Family Business and Family Ownership Disputes Settlement Committee’ in Dubai, to ensure the continuity of family businesses and prevent any harm to their reputation or financial position while a dispute is being considered. 

The decision is in line with fast-paced measures taken in Dubai to boost family business and ownership sustainability, and maintain the role of family businesses as partners in the emirate’s economy. 

HH Sheikh Maktoum stressed that forming a committee to settle disputes of family businesses and family ownership is a reflection of the vision of HH Sheikh Mohammed bin Rashid Al Maktoum to instill the values of justice and the rule of law, as well as his directives to establish a comprehensive legal framework to support family business and ownership sustainability and enhance their contribution to Dubai’s economy. 

“We continue to work to create a business environment that supports the sustainability of family businesses, ensures ownership continuity and helps improve their governance and contribution to Dubai’s economy as key partners in development and a leading destination for promising investment opportunities,” HH Sheikh Maktoum said. 

“Dubai is keen to ensure we have the right climate that helps family businesses grow and flourish generation after generation, contributing to the Dubai Economic Agenda D33’s objective of making Dubai one of the world’s top urban economies as well as the fastest-growing and most attractive business hub,” he added. 

His Highness pointed out that the ‘Committee for Dispute Settlement of Family Businesses and Ownership’ will comprise financial experts who will work alongside judges to provide specialised judicial expertise.  

“The committee will consider and settle all disputes related to family businesses and family ownership while preserving their continuity and preventing the interruption of its work or harm to its reputation or financial position throughout the period of consideration of the dispute. Dubai was, is and will continue to be an incubator for companies and family ownership and a supporter of effective justice,” he added. 

Building a safe community
His Excellency Taresh Eid Al Mansouri, President of Dubai Courts, said that the decision to form the ‘Committee for the Settlement of Family Businesses and Family Ownership Disputes in the Emirate of Dubai’ stems from the wise leadership's commitment to building a safe society and a fair judiciary, achieving leadership and excellence in the judicial sector at all levels, enhancing social and economic stability in the emirate, consolidating Dubai's leading position on the global legal and judicial map with regards to the development and sustainability of family businesses and providing an alternative system for settling corporate disputes related to family businesses and family ownership in Dubai according to best practices followed in this field. His Excellency explained that the ‘Committee for the Settlement of Family Businesses and Family Ownership Disputes in the Emirate of Dubai’ has been formed within Dubai Courts to take advantage of the Dubai Courts system’s judicial and administrative work and the diversity of jurisdictions and legal expertise, in addition to the digital infrastructure designed to enhance the efficiency of operations related to the provision of judicial services.

Enforcing laws
For his part, His Excellency Prof. Saif Ghanem Al Suwaidi, Secretary General of the Dubai Judicial Council, stressed that the formation of the ‘Family Business and Family Ownership Disputes Resolution Committee’ would activate the laws regulating the affairs of family businesses and family ownership in the emirate, the most important of which are Federal Decree-Law No. (37) of 2022 on family businesses, and Law No. (9) of 2020 regarding the regulation of family ownership in the Emirate of Dubai, which achieves the desired effect of issuing this legislation in regulating the affairs of companies and family ownership in the emirate. His Excellency added that the presence of the committee and its formation of judges and specialists in the financial field will speed up the settlement of disputes that may arise regarding companies and family ownership, which will reflect positively on finding a balance between the requirements of prompt justice and the preservation of the economic interests of these companies and ownership.

Formation of the committee
The resolution stipulates the formation of the ‘Family Business and Family Ownership Disputes Settlement Committee’. A judge with a rank that is not lower than an appeal judge will be appointed as its chairman. The committee will also include two members with experience and competence in the legal, financial and family business management fields, who will be appointed as per the recommendation of the Director General of Dubai Chambers.

The resolution also stipulates the formation of the committee within Dubai Courts to ensure that the technical, administrative and legislative infrastructure of the courts can be leveraged to carry out the tasks assigned to them.

Committee Responsibilities
Based on the decision issued, the Committee will be competent to consider and settle all disputes arising from the implementation of the family ownership contract, or between partners in the family business or between these partners and family members.

Its functions also include considering and adjudicating matters related to the expiry of the family ownership contract, the termination of the family business status, or its removal from the family business register established in accordance with the Family Companies Law, as well as determining the price of the partners' shares in the family business, settling disputes related to the right to redeem them, as well as considering and deciding on matters related to the cancellation of the change in the categories of shares in family businesses. 

For the purpose of preserving family ties between family members, the resolution stipulates that if the family ownership contract or the memorandum of association or charter of the family business includes a provision that disputes shall be settled amicably through the Family Members Council, the Committee shall, before considering such disputes, refer them to that Council to propose reconciliation between the parties to the dispute.

The resolution also stipulates activating the role of the Centre for the Amicable Settlement of Disputes attached to Dubai Courts in resolving corporate and family ownership disputes amicably through conciliation and reconciliation, as the decision prevented the Committee from considering these disputes before submitting them to the Centre and failing to settle them amicably.

Powers of the Committee
In order for the Committee to carry out its functions optimally, the resolution stipulates that it is granted the authority to take the necessary preventive and urgent measures it deems appropriate to preserve the continuity of family ownership or the family business, and to prevent the interruption of its work or any harm to its reputation or financial position throughout the period of consideration of the dispute, as the first objective of the Committee's intervention in the dispute.

Appealing the decisions and rulings of the committee
For the purposes of ensuring the achievement of timely justice and maintaining the degrees of litigation in a way that achieves the interests of the parties and the justice system in the emirate, the resolution stipulated the possibility of appealing the decisions and rulings of the committee before the competent court in Dubai Courts, in accordance with the cases and procedures stipulated in the Civil Procedure Law. 

The decision also obliges the committee to submit periodic reports on its work to the Ministry of Economy in order to achieve periodic review of these works and ensure that measures and steps are taken that would increase their effectiveness. 

HH Sheikh Mohammed bin Rashid Al Maktoum had issued a decree last February, directing the establishment of the Family Business Centre in Dubai aimed at ensuring the sustainability and growth of Dubai family businesses by providing technical and administrative support to enhance sustainability and facilitate the smooth transition of power.

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