Operational Framework for Family Business Dispute Committees Announced

In February 2025, the UAE issued Ministerial Resolution No. 89 of 2025 on the Regulation of the Functioning of Family Business Dispute Resolution Committees (“Resolution”) that will be tasked with reviewing and resolving disputes arising within family businesses, ensuring a structured and efficient resolution process.

It is well known that in 2022, the UAE issued Federal Decree-Law No. 37 of 2022 on Family Business “Federal-Decree” that provided a comprehensive legal framework that aims at strengthening the role of family businesses as key contributors to the UAE’s economic and social development. Given that family-owned enterprises form a significant portion of the private sector, the Federal-Decree enhances their ability to thrive in an increasingly competitive market by promoting best practices in governance, financial management, and operational efficiency.

To complement the legal framework established by the Federal Decree-Law in relation to family business disputes, the Resolution has been issued to provide a clear and structured mechanism for resolving conflicts within family-owned businesses. This resolution outlines the composition, jurisdiction, and procedural framework of the specialized Committee, ensuring a fair, efficient, and transparent dispute resolution process.

According to the Resolution, a Committee will be established at the Federal First Instance Courts in Ajman, Umm Al Quwain, and Fujairah. The Committee shall be chaired by a judge and assisted by two experts specialising in legal, financial, and family business management fields. Selected experts and specialists must not have expressed opinions on the dispute or related conflicts, even in consultative reports, nor have been previously appointed.

The appointment of the Committee’s chairman, members, and secretary shall be issued by a ministerial decision, provided that the chairman shall be nominated based upon a recommendation from the Federal Judiciary Council.

The secretary, under the chairman’s supervision, shall draft the minutes of Committee sessions, recording members’ names, the secretary, date, time, location, and all proceedings. The minutes shall be signed by both the chairman and the secretary. The secretary shall maintain the confidentiality of the information and shall not disclose it to any person save with the Committee’s decision.

The Committee shall be responsible for resolving all disputes arising between partners in the family business, between the partners and family members, between these individuals and the Family Business, and between them and third parties, and that may be related to the memorandum of association, management, ownership of the family business, or the application of Federal Decree-Law No. 3 of 2022 on Family Businesses.

The Committee is empowered to take necessary preventive and urgent measures to ensure the continuity of the family business, safeguarding its operations, reputation, and financial position during dispute resolution. It may also seek assistance from experienced and competent individuals and implement any other measures deemed appropriate to fulfil its functions under Federal Decree-Law No. 37 of 2022.

The Resolution outlined that the Committee shall document its proceedings in minutes signed by the chairman and secretary, serving as a record of discussions, documents, requests, and pleas submitted. The family business shall be represented before the Committee by its manager or an authorized attorney that holds a duly executed power of attorney.

The Committee shall decide upon the requests and grievances submitted to it within a maximum period of three (3) months from the date of submittal of the request, via a reasoned decision, which holds the authority of a Court of First Instance ruling. However, this period may be extended for a similar duration upon a reasoned request from the concerned parties. However, the Committee’s decisions may be appealed before the competent court.

As an exception to the Committee’s competencies set out in this Resolution, the parties to the dispute may agree to resort to arbitration in accordance with the applicable legislation in the State, or resort to the courts located in the financial free zones in the State.

Further, the Committee shall prepare an annual report on the disputes brought before it and their outcomes during the year. This annual report shall be sent to the Ministry of Economy, with a copy sent to the Ministry of Justice.

This Resolution, that took effect in February 2025, provides clear guidelines on the functioning of the Committee, ensuring transparency and efficiency.

For further advice on related matters, please contact Mohamed El Naggar Associate at Galadari Advocates and Legal Consultants, at m.elnaggar@galadarilaw.com

Mohamed El Naggar Associate m.elnaggar@galadarilaw.com