Uae Commercial Agency Law 2020

The additional registration criteria previously required for registration with the Ministry have not changed under Federal Law No. 11 of 2020 (i.e. the corresponding agent contract must be exclusive, either with regard to an emirate or the UAE or the whole of the UAE and the commercial agency contract must be notarized and accompanied by certain supporting documents). Any commercial agency covered by the Agency Act must be registered in the Commercial Register, which is managed by the Ministry of Economy of the respective emirate or, if for the whole of the United Arab Emirates, by the Ministry of Economy of the federal capital Abu Dhabi. An agreement must be signed in front of a notary (and certified if signed outside the UAE). The law that governs agency contracts in the UAE is Federal Law No. 18 of 1981, known as the „Agencies Act”, popularly known as the UAE Agencies Act. The Agencies Act is complex and includes all forms of third-party sales contracts. The passage of Federal Law No.

11 of 2020 represents the most significant amendment to the UAE Commercial Agents Act since 2010. This latest change represents an important step in encouraging local businesses to access financial markets for additional financing and investment, which in turn should serve as an incentive for local financial markets. In the event that the agency contract or specific agreement in similar cases is not registered with the Ministry or does not meet the criteria set out in the Agency Act, disputes arising from these matters will be heard in the competent court. The court must be located in this area under the Federal Civil Operations Act No. 5 of 1985. Therefore, an agent can only use the guarantees provided for by the Agency Act in the United Arab Emirates if such an agreement is registered. In the event of an appeal of cassation procedure No. 128 of 2018 (administrative) before the Court of Cassation, the court identified various aspects of a client`s power to terminate an agency contract. A word of warning is that in due course, the Minister of Economy will adopt a resolution on the procedures and controls required for the involvement of a PJSC or private companies owned by a PJSC (which meets the national ownership criteria) in the activities of commercial agencies in the UAE, but in principle local family businesses are now able to: convert their private companies into CSJPs to attract foreign capital investment without the risk of losing their status as registered commercial agents (provided, of course, that at least 51% of the PJSC shares are held and continue to be held by UAE nationals).

The latest change is important because of the right granted to companies with a national contribution of 51% to act as commercial agents. Although the change brought some changes to the law, the reversal was anyway limited for unknown foreign investors. On the other hand, the change confirmed the legal assurances offered to commercial agents registered in the country. First of all, it is now explicitly mentioned that a commercial agency passes to the heirs in the event of the death of the agent. Previously, Article 14 of the UAE Commercial Agents Act required in the event of death that the legal representative or heirs of an agent submit a request accompanied by supporting documents within 60 days of the death to remove the commercial agency from the registry or file objections to avoid revoking the agency. Article 14 has not been amended under Federal Law No. 11 of 2020, so the Ministry must clarify whether reporting obligations are now necessary in light of Article 14 in light of the amendment to Article 8. If an entrepreneur decides to hire a commercial agent or distributor to market their products or services in the United Arab Emirates („UAE”), they must consider the legal consequences of registering or not registering the commercial agency. If you are looking to work with a sales representative or distributor in the UAE, or if you already have business relationships with local distributors, it may be advisable to seek legal advice.

We focus on the following aspects: According to the Agency Act, the agency`s activities in the UAE can only be carried out by commercial agents registered with the Ministry of Economy. In addition, the courts of the United Arab Emirates are effectively prevented from hearing cases related to unregistered agency contracts. The effect of Article 3 leaves limited recourse to parties where agency contracts are not registered. However, the Water Act and the jurisdiction of the UAE courts are mandatory in a number of cases, including all registered commercial agent contracts that are subject to the law. The principal and the representative cannot avoid this requirement. Subsequently, the learned Court of Appeal decided to set aside the earlier judgment, set aside the Committee`s decision to revoke the commercial agency registered with the Ministry, terminate the exclusivity of the second respondent as the appellant`s exclusive representative, and dismiss the other claims ..