The Conflict-of-Law Rules in the UAE’s New Civil Transactions Act: Yet Another Missed Opportunity!

I. Introduction

On 1 January 2026, the Legislative Decree No. 25/2025 promulgating a brand new Civil Transactions Act (hereafter ‘NCTA’) entered into power. The NCTA repeals and replaces the previous Federal Civil Transactions Act of 1985 (hereafter ‘the 1985 Act’). The adoption of the NCTA types a part of the State’s broader and ongoing effort to comprehensively replace and modernize its authorized system, an effort that has already touched main legislative devices, together with, amongst many others, the 2022 Civil Process Act, the 2024 Private Standing Act, the 2023 Competitors Act, and the 2022 Business Transactions Act.

Because the 1985 Act contained a codified set of conflict-of-laws guidelines, its alternative essentially entails a re-examination of the UAE’s non-public worldwide legislation framework and, not less than in precept, the introduction of recent or revised choice-of-law provisions. Towards this background, this observe affords a preliminary and essentially tentative evaluation of the modifications launched by the NCTA. It focuses on the principle options of the brand new legislation in relation to choice-of-law regulation, highlighting each the modifications launched and the bounds of the reform.

II. The Selection-of-Legislation System below the 1985 Act and its Evolution

1. Selection of Legislation Guidelines below the 1985 Act

It’s value recalling that the primary codification of conflict-of-laws guidelines within the UAE was launched in 1985 as a part of the 1985 Act. This codification consisted of 29 provisions (Arts. 10–28), included into the Preliminary A part of the Act. In each construction and substance, the UAE codification intently adopted the Egyptian mannequin. Remarkably, regardless of the 37 years separating the 2 codifications, many of the Egyptian guidelines had been retained virtually unchanged. Some divergences nonetheless existed. As an illustration, whereas renvoi is fully excluded below Egyptian legislation (Artwork. 27 of the Egyptian Civil Code), it’s permitted below the 1985 Act solely the place it results in the appliance of UAE legislation (Artwork. 26 of the 1985 Act).

The codification was comparatively easy, comprising normal choice-of-law guidelines structured by reference to broad authorized classes, dealing particularly with standing and capability (Artwork. 11); marriage, its results, and dissolution (Arts. 12–14); upkeep (Artwork. 15); guardianship and different measures for the safety of individuals with restricted capability and absentees (Artwork. 16); succession and wills (Artwork. 17); actual rights (Artwork. 18); contractual obligations (Artwork. 19); non-contractual obligations (Artwork. 20); and process (Artwork. 21).

The codification additionally included normal provisions governing characterization (Artwork. 10); the precedence of worldwide conventions (Artwork. 22); normal rules of personal worldwide legislation (Artwork. 23); nationwide legislation (Artwork. 24); multi-jurisdictional authorized techniques (Artwork. 25); renvoi (Artwork. 26); public coverage (Artwork. 27); and the appliance of UAE legislation in instances the place the content material of the relevant overseas legislation can’t be ascertained (Artwork. 28).

2. The 2020 Reform

It was not till 2020 that the choice-of-law guidelines had been partially reformed by way of the Legislative Decree No. 30/2020, which amended sure provisions of the 1985 Act. This reform was not complete however as an alternative focused 4 key areas.

First, the rule on substantive and formal validity of marriage was amended to switch the previous connecting issue based mostly on the lex patriae of every partner with the lex loci celebrationis (Artwork. 12).

Second, the rule on private and patrimonial results of marriage and its dissolution based mostly on the lex patriae of the husband was equally deserted in favor of the lex loci celebrationis.

Third, Article 17, referring to succession and wills, was revised to permit professio juris for each the substantive and the formal validity of wills. As regards the previous, the desire is ruled by the legislation chosen by the testator, failing which the lex patriae of the deceased on the time of demise applies. As for formal validity, professio juris now operates as a further different connecting issue.

Lastly, the reform addressed public coverage. For causes that stay unclear, Article 27 expressly restricted the operation of the general public coverage exception by excluding issues historically related to private standing – akin to marriage, divorce, filiation, upkeep, guardianship, succession, and wills – from its scope, even though these issues are typically considered having a powerful public coverage character (Artwork. 3).

Different provisions, nonetheless, had been left unchanged, however the truth that a lot of them are outdated and not mirror up to date developments in non-public worldwide legislation, particularly the persistence of conventional connecting components such because the frequent domicile of the contractors and the locus contractus in contractual issues or double actionability rule for non-contractual obligations. Extra basically, the reform failed to deal with the interplay between the conflict-of-laws guidelines contained within the 1985 Act and the provisions delimiting the scope of software of the 2005 Private Standing Act, which was subsequently changed by the 2024 Private Standing Act. This unresolved problem of articulation continues to generate vital authorized uncertainty (for an outline, see my earlier posts right here).

III. The New Reform below the NCTA

It was due to this fact with real enthusiasm that the reform of the present authorized framework was awaited, notably in mild of the continued efforts to modernize the UAE authorized system and align it with worldwide requirements. Nonetheless, whereas the reform does current some optimistic features (1), it’s with appreciable remorse that the NCTA seems to have devoted solely very restricted consideration to the modernization of the UAE conflict-of-laws regime (2).

This evaluation is grounded in two fundamental observations:

First, the present system has largely been maintained with just some minor modifications, together with modifications in wording.

Second, the very restricted modifications that had been launched mirror a legislative strategy that, at greatest, seems insufficiently knowledgeable by up to date developments in non-public worldwide legislation.

1. Optimistic Points of the Reform

Three fundamental optimistic features might be recognized:

The primary issues the clear affirmation of occasion autonomy as a tenet in contractual issues. Beneath the 1985 Act, though occasion autonomy was formally acknowledged, its formulation tended to current it as an exception quite than as a real precept. This shortcoming has now been remedied within the NCTA. The brand new provision expressly states that “contractual obligations, as to each kind and substance, are ruled by the legislation expressly chosen by the events.” As well as, the NCTA abolishes the place of conclusion of the contract as an goal connecting issue relevant within the absence of a selection of legislation by the events, thereby transferring away from a conventional and infrequently criticized criterion.

Second, the questionable rule permitting the appliance of UAE legislation when one of many events has a number of nationalities is now deserted. In line with the brand new rule, in case an individual has a number of nationalities, the legislation of nationality below which that individual entered the UAE would apply.

The third necessary modification issues public coverage. As famous above, the 2020 reform launched appreciable confusion and ambiguity within the software of the general public coverage exception by unduly limiting its scope and excluding issues which have historically been considered falling inside public coverage. The NCTA addresses this issue by eradicating the limitation launched in 2020 and by restoring the general public coverage exception to its extra normal perform inside the UAE conflict-of-laws system.

One other modification of explicit significance also needs to be highlighted, though it should be acknowledged that its sensible impression could also be extra symbolic than substantive. This issues the abandonment, within the present reform, of any express reference to Islamic Sharia within the context of public coverage, though such a reference, which appeared within the authentic provision in 1985, was expressly maintained within the 2020 reform. This omission marks a notable shift in legislative approach and seems to sign a transfer towards a extra impartial formulation of public coverage, not less than on the degree of statutory language.

The elimination of the specific reference to Islamic Sharia might thus be understood as a part of a broader development towards the modernization and internationalization of the UAE’s non-public worldwide legislation framework. This interpretation is additional supported by the redefinition of the position of Islamic Sharia as a proper supply of legislation below the NCTA. Certainly, whereas former Article 1 of the 1985 Act set out an in depth hierarchy of guidelines prioritizing particular faculties of jurisprudence (most notably the Maliki and Hanbali faculties), the brand new Article 1 of the NCTA adopts a extra open-ended formulation, granting judges better discretion to pick “the answer that’s most acceptable in mild of the pursuits at stake,” with out specifying any explicit college of reference. An identical strategy was adopted within the 2024 reform of the Private Standing Act.

2. Limits of the Reform and Persisting Points

 However the optimistic features recognized above, the reform additionally presents various vital shortcomings. These concern each sure newly launched provisions, whose design or content material raises severe difficulties, and necessary points that the legislature selected to not tackle or seems to have neglected altogether. Taken collectively, these weaknesses significantly restrict the extent to which the reform might be considered a real modernization of the UAE conflict-of-laws regime.

a) New Options Launched within the NCTA

i) The The Battle-of-Legislation rule in Issues of Marriage and its Dissolution:  The Additional Extension of the Scope of the Nationality Privilege

As famous above, previous to the entry into power of the NCTA, the lex loci celebrationis ruled the substantive and formal validity of marriage (Artwork. 12), in addition to its private and patrimonial results and its dissolution (Artwork. 13). Marriages concluded between  foreigners, or between a foreigner and a UAE citizen, may be acknowledged as legitimate in kind in the event that they complied with the formalities of the place of celebration, or in the event that they revered the formal necessities prescribed by the legislation of every of the spouses (Artwork. 12). The applying of those guidelines was, nonetheless, topic to an necessary exception: they didn’t apply if one of many events was a UAE citizen on the time of the wedding, besides with respect to capability (Artwork. 14).

First, it must be famous that the NCTA did not resolve the inconsistency between Articles 12 and 14. Whereas Article 12 permits the formal validity of marriages concluded by UAE residents overseas to be ruled by the lex loci celebrationis, Article 14 removes this risk by subjecting all issues referring to the formation of marriage, its results, and its dissolution solely to UAE legislation when one of many events is a UAE citizen.

Second, and extra importantly, the NCTA extends the scope of the exception in a problematic method. Beneath the brand new guidelines, the exception now applies not solely to individuals who had been UAE residents on the time of the wedding, but additionally to those that subsequent to their marriage acquired UAE citizenship, and retained that citizenship as much as the time the motion is introduced.

On its face, this rule raises two fundamental issues. First, it introduces retrospective results by making use of UAE legislation to marriages concluded earlier than the acquisition of citizenship. This probably impacts the validity, formalities, and results of marriages that had been lawfully concluded below overseas legislation. Second, it might create uncertainty in cross-border matrimonial relations, as spouses who purchase UAE nationality after marriage might inadvertently topic themselves to UAE legislation even when all formal and substantive necessities had been initially glad overseas. Such an extension of the nationality privilege, whereas it might be of very restricted sensible relevance, represents a questionable departure from conventional conflict-of-law rules based mostly on the concepts of acquired rights, and the respect of the legit expectations of the events.

ii) The Battle-of-Legislation rule in Contractual Issues

Regardless of the optimistic features famous above, the brand new rule suffers from vital shortcomings. These shortcomings relate, at the start, to the scope and the regime of occasion autonomy. Particularly, the availability stays silent on a number of essential points: whether or not the chosen legislation should have any reference to the events or the contract; whether or not an preliminary selection of legislation could also be modified at a later stage; and whether or not methods akin to dépeçage or the selection of non-State legislation are permissible. All these uncertainties undermine the efficient operation of occasion autonomy and weaken authorized certainty.

Second, within the absence of a selection of legislation by the events, the NCTA not solely retains the outdated reference to the events’ frequent domicile as the first goal connecting issue, but additionally introduces a brand new connecting issue whose software is probably going, in observe, to steer systematically to the appliance of UAE legislation. Beneath the brand new rule, the place there’s neither a selection of legislation nor a typical domicile, the contract is ruled by the legislation of the State wherein the principal obligation is to be carried out. Not like the normal check of the “attribute obligation”, which usually results in the identification of a single governing legislation presumed to have the closest reference to the contract, the notion of “principal obligation” is inherently problematic within the subject of selection of legislation. It’s because bilateral contracts, which represent the principle devices of worldwide commerce, by their very nature contain a couple of principal obligation, such because the supply of products and the fee of the worth in a contract of sale. Because of this, in contracts involving a UAE occasion, whether or not as obligor or obligee, the efficiency of not less than one principal obligation will typically happen within the UAE, thereby triggering the systematic and largely indiscriminate software of UAE legislation. Even when the time period “principal obligation” is known as referring to the “attribute obligation,” the brand new provision departs from the overall strategy adopted in main latest codifications by designating the place of efficiency (locus solutionis) of that obligation, quite than the extra extensively accepted and extra predictable connecting issue of the routine residence of the occasion performing the attribute obligation.

In fact, the events might search to keep away from this issue by selecting the legislation relevant to their contract. Nonetheless, given the very weak standing of overseas legislation within the UAE, the place it’s handled as a mere query of reality, and the appreciable hurdles imposed on the events in establishing its content material in judicial observe, the sensible relevance of occasion autonomy is essentially illusory. This evaluation is as soon as once more confirmed by a number of latest Supreme Courtroom selections wherein the legislation chosen by the events was not utilized on the grounds that the chosen legislation was not ascertained as required (see Dubai Supreme Courtroom, Attraction No. 720 of 13 August 2025; Attraction No. 1084 of twenty-two October 2025; Attraction No. 1615 of 23 December 2025). The identical difficulties come up in household legislation issues, as mentioned in a earlier put up, however they’re an identical in substance in civil and business instances as nicely.

b) Persisting Points

However the few optimistic developments highlighted above, the conflict-of-laws guidelines included within the NCTA largely protect the normal Egyptian mannequin launched into the area in 1948. Because of this, they continue to be considerably disconnected from up to date developments and comparative traits in non-public worldwide legislation and fail to completely mirror the rules more and more adopted in different jurisdictions to deal with the wants of cross-border transactions, household relations, and worldwide business observe. The reform additionally preserved a historically inflexible strategy, leaving little room for flexibility and excluding exception clauses that will enable courts to depart from the designated relevant legislation in favor of a extra intently related one. Particularly, the NCTA doesn’t introduce tailor-made battle guidelines designed to mirror the precise traits of sure authorized relationships. This omission is very noticeable with regard to protecting regimes for weaker events, together with workers and customers. Not like many fashionable conflict-of-laws techniques, the NCTA doesn’t restrict the position of occasion autonomy in these contexts, nor does it present particular choice-of-law guidelines for employment or shopper contracts. Related shortcomings might be noticed within the absence of specialised guidelines governing explicit classes of torts or addressing particular features of household relationships.

Lastly, as was already the case following the 2020 reform, the NCTA fails to resolve the longstanding and basic problem in regards to the articulation between the principles delimiting the scope of software of the Private Standing Act and the choice-of-law guidelines set out within the NCTA. This downside has develop into much more acute with the latest introduction of “civil private standing” laws at each the federal degree and the native degree within the Emirate of Abu Dhabi, thereby additional complicating the general normative panorama (for an outline see my earlier posts right here and right here).

IV. Some Concluding Remarks

Taken as a complete, whereas the adoption of the NCTA might have supplied a possibility to undertake an intensive and forward-looking reform of the UAE’s non-public worldwide legislation framework by drawing inspiration from the newest developments within the subject and from normal traits noticed in comparative legislation. Such a reform would have helped consolidate the UAE’s place and ambitions as a number one hub not just for worldwide finance and enterprise transactions, but additionally as a melting pot of a number of nationalities dwelling harmoniously inside its territory. Nonetheless, the reform in the end falls in need of this ambition. It largely preserves an outdated construction and introduces solely restricted, and at occasions problematic, changes. Furthermore, the reform does nothing to deal with the sturdy homeward development noticed in judicial observe, which considerably limits the sensible relevance of choice-of-law guidelines. This development is especially evident in private standing laws and within the very weak standing accorded to overseas legislation. On this respect, the NCTA represents a missed alternative to align the UAE’s conflict-of-laws regime with fashionable comparative requirements and to reinforce authorized certainty, predictability, and coherence in an more and more worldwide authorized atmosphere.