When drafting contracts in Dubai, one of the most important clauses is the governing law clause. It determines which country’s laws will apply if a dispute arises. But what happens if a contract has no governing law clause? In the UAE, this situation can create uncertainty, delay dispute resolution, and expose parties to unexpected risks.
Why a Governing Law Clause Matters
A governing law clause ensures clarity by:
- Specifying which law applies in case of disputes.
- Avoiding conflicts between different legal systems.
- Providing predictability for businesses and individuals entering cross-border contracts.
Without this clause, courts must determine applicable law, which can complicate proceedings.
How Dubai Courts Handle Contracts Without a Governing Law Clause
If a contract does not state the governing law:
- UAE courts generally apply UAE law by default.
- For cross-border agreements, courts may look at the nature of the contract, place of execution, and parties involved.
- If foreign law is relevant, it must be proven and translated before the court — otherwise, UAE law prevails.
This means the absence of a governing law clause can shift control of the contract’s interpretation to the courts, leaving parties vulnerable.
People also read: Business Debt Restructuring in Dubai: How to Exit the Market Safely and Protect Your Rights
Risks of Omitting a Governing Law Clause
Leaving out this clause can lead to:
- Uncertainty in contract enforcement.
- Higher litigation costs due to legal interpretation disputes.
- Risk of judgments based on unfamiliar laws.
- Reduced bargaining power in case of a dispute.
For businesses in Dubai, especially those engaged in international trade and investment, this risk can be significant.
How Concept Advocates and Adv. Sanafer Arakkal Help
Adv. Sanafer Arakkal, founder of Concept Advocates, is an expert in commercial contracts and dispute resolution in the UAE. He helps clients by:
- Drafting contracts that include clear and enforceable governing law clauses.
- Reviewing existing agreements to identify legal risks.
- Advising on the best jurisdiction and applicable law for cross-border contracts.
- Representing clients in Dubai courts when contracts lack governing law, ensuring their rights are protected.
His deep understanding of UAE law and international legal principles ensures that clients avoid uncertainty and minimize risks in contract disputes.
Conclusion
If a contract in Dubai has no governing law clause, UAE courts will usually apply UAE law, but this can create complications in cross-border agreements. To avoid uncertainty, every contract should include a well-drafted governing law clause. With Concept Advocates and Adv. Sanafer Arakkal, businesses and individuals gain the legal expertise they need to draft, review, and enforce contracts with confidence.
