Legal Environment of Business: UAE's Civil Law System Analysis

This report examines the legal environment of business in the United Arab Emirates (UAE), focusing on its civil law system. It begins by defining civil and common law, highlighting the UAE's civil law jurisdiction influenced by Sharia law, French civil laws, and Egyptian civil laws. The report explores the historical development of the UAE's legal system, tracing its evolution from a British protectorate to its current status with a codified constitution and federal codes. It then compares the advantages and disadvantages of civil and common law systems, concluding that while both have their merits, the civil law system is more suitable due to its structured and codified nature. The analysis considers the impact of the DIFC and the growth of commercial activities on the UAE's legal framework.

Legal Environment of Business
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Legal Environment of Business
Question 1
Source of law denotes the origin point of law and puts forth the binding rules which help
in governing the geographical territory of such a nation. Every nation has own set of sources of
law. The article titled “The Common Law and Civil Law Traditions” presents a world map
chalking out the sources of laws of different nations across the globe. It depicted how some
nations follow common law, some follow civil law, and the other sect follows a mix of common
and civil laws. However, this map did not cover a few nations and one of this was UAE
(Berkeley, 2017). This discussion explores how UAE is majorly a civil law based jurisdiction.
Although, the UAE has seen recent changes in this regard, and the common law is also
becoming a source of law.
Before further exploring the topic of sources of law in context of UAE, it becomes crucial
to understand what civil law and common law mean. The given article brings clarity in this
regard and highlights that common law refers to an uncodified system of law. Under common
law, no reliance is placed on the established legislation. Instead, the court decisions, also
referred to as precedents, are relied as being a source of law. This system has greatly shaped
the laws in nations like UK and USA, where both common laws and civil laws are followed. On
the other hand, civil law refers to a codified system of law. Under this, the legislation, legal
codes and rules act as the guiding force in taking any decision regarding something being lawful
or unlawful. A deviation from such coded laws is not possible, demanding a need for the
interpretation of courts, thereby setting the common law (Berkeley, 2017).
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In UAE, the civil and Sharia laws are the coded system of law, thereby making a civil law
based jurisdiction. The principles established under the present day laws of UAE, take inference
from the law system based on Islamic Sharia. Apart from reliance on the Sharia laws, the coded
legal system of UAE also draws inference from the French civil laws and the Egyptian civil laws
(U.ae, 2019). Even though the precedents of higher courts are applied by the lower courts
commonly, these are not recognized, thereby showing less reliance on the common law
principles (Khedr & Alnuaimi, 2010). This situation is noticing a recent change. This is because
the legal system of the UAE is noticing an extension in the common law fields, particularly
because of the practice being undertaken in DIFC, i.e. Dubai International Financial Centre
Courts (U.ae, 2019).
The codified nature of the UAE laws is further highlighted by the constitution created in
the jurisdiction. The UAE constitution has ten main parts and these parts further see a sub
categorization in form of 151 articles. All these come together to depict the different
unanimous undertakings of the seven emirates rulers (Beebeejaun, 2020). The constitution
clearly states that the principle source of law is Islam. Despite the role in criminal and civil laws
of the UAE of Sharia principles, the key focus of such principles remain on the social laws,
usually pertaining to divorce, succession and family law. Initially created as a temporary
constitution, during the establishment of UAE back in December 1971, a more permanent
stature has been given to the constitution. All the key rules pertaining to constitutional and
political organization of the UAE are explained in this codified document (Khedr & Alnuaimi,
2010).
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The civil law jurisdictions like Dubai have seen legislation being created in proper coded
manner, were they adhere to the Islamic Sharia law. The legislation cover codes presenting
generic principles of law and these are used with a key number of subsidiary legislation. As a
result of the growth in commercial activities in UAE during the last thirty years, an expansion
has been noticed in the coded laws and this has resulted in the federal codes of law that are a
comprehensive body of federal legislation. Some of such federal codes include areas of civil
procedures, and employment law, maritime law, industrial law, banking law, commercial law,
civil law, intellectual property law and immigration law (Tarbuck & Lester. 2009). As a result of
the growing significance of UAE as a global trading hub, there have been flexibilities in recent
year in the codified nature of law. This is the reason why despite UAE being a civil law
jurisdiction, it recognizes various things as are followed under English laws; example of this
includes right of freedom of contract (Williams, 2018).
Thus, in my view, it is clear that the UAE is a civil law country due to the key reliance on
codified laws. These laws have been drawn from Sharia law, Egyptian legal codes, and French
law. And there is no such evidence to state that UAE could be deemed as a common law based
nation.
Question 2
The legal system of each nation is developed over a period of time and is influenced by
various factors. The given article does track the historical developments of civil law and English
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common law. This discussion explores the historical developments of present day legal system
of UAE, based on the background set in the given article.
The journey from Catholic Church law to the influence of Roman law was the starting
point in creation of civil law. The Roman law became a key to development of law in Europe.
The practice of civil law in the area saw further fine-tuning in attempts to give it a proper
structure and shape. The article also sheds light on the birth of English common law, which
continues to be a source of law of many nations. The discussion of court of Chancery and courts
of equity highlights the difficulties in this process (Berkeley, 2017). Even in present day, the
English common law continues to be adopted in different law stream; for instance, contract
law, and tort law of negligence (Cartwright, 2016). There are many factors which lead to
development of any legal system. For instance, the initial laws were created to give a structure
to the legal system, so that the same could be followed. Once a formal legal system was
created, the changing times and the ambiguities in law required further change. These were
undertaken in terms of revised legislation or court decisions resulting in common law being
created. Till date, various factors keep bringing changes to both the codified and uncodified
systems of law.
In order to track the historical development of legal system in UAE, one needs to look at
the history of the nation. Before 1971, UAE used to be the British Residency of the Persian Gulf,
meaning it was a British protectorate. The year of 1972 witnessed the creation of a temporary
constitution to bring forth the political and legal framework for “The Union” also otherwise
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referred to as the UAE. The event is celebrated each year on 02nd December to encourage the
common beliefs of people (Beebeejaun, 2020).
The development and growth of the integrated economy of UAE, particularly because of
free flow of capital and free trade, coupled with the presenting the nations with modernized
and booming ports, led to UAE developing its legal coding. This allowed the traders to get
clarity regarding a tangible jurisdiction to be adhered in cases of any issues in forms of dispute.
However, a key difference in case of UAE, as against its historical predecessor UK is that UAE
developed a written constitution. Moreover, 1996 saw this constitution getting a permanent
status, along with formation of legal system of the nation. One key exception in this context
comes from the emirates of Ras Al Khaimah, and Dubai, who even in the present day follow a
distinctive judicial system and follow their own set of laws as have been created by the rules of
those areas. However, this has been done only where the federal laws are absent or silent
(Beebeejaun, 2020).
Thus, each nation has a history of the creation of their legal system. It originates in their
past and is affected by several factors. The impact of such factors continues to be present even
till date and so are suggested to take place in the future. The coded system of UAE has its
history in its formation. Furthermore, the boom in economy of the nation and UAE emerging as
a global workplace, led to the present day legal system of the nation.
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Question 3
As stated in the first part of this discussion, civil law is the system where a codified legal
structure is created through legislation and statutes. As against this, common law system is
based on precedents and is not confined by written documents. It is open to interpretation and
changes of time in a easier manner in comparison to the civil law system. However, each type
of system has its advantages and disadvantages, which have been explored in the following
parts.
Civil law system covers a structured and codified document which clearly prescribes
what is correct and was is incorrect. And this is where the biggest advantage of civil law system
is presented. Civil laws clearly demarcate what is right and what can be perceived as being
within the scope of law. These laws are created after following a proper procedure for creating
legislation based on the respective jurisdiction (Brand & Getzler, 2012). The civil laws also give
specifics of each aspect of the law, be it in terms of the penalties to be levied, the timeline of
doing something, or the gravity of situation. However, this often presents a disadvantage as
well. The written documents are open for interpretation. This is particularly true in case of
ambiguity in written documents. Apart from this, there are cases where two civil laws could
contradict each other, or the provisions within a civil law are contradictory. This then requires
the interpretation and intervention from the judiciary. Once the judiciary is involved, and a
precedent is set, the problems of civil law are solved through the common law system. Within
this disadvantage, one needs to know that the judiciary is indeed restricted by the coded law
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and can interpret what is written (Cromwell, 2019). Thus, the judges mostly play the role of
interpreters in such case, rather than being a law making body.
As is the case with civil law, common law too has its own set of advantages and
drawbacks. The most important advantage of common law system is that it is flexible and it is
open to interpretation through discussion. The common law is created through court decisions
where each side presents their point of view and the final decision is taken by the judges based
on thorough deliberations. However, without civil law, common law is difficult to exist. This is
because the questions of law or the ambiguities of civil law are disputed in court. These give
rise to precedents (Novakovic, 2019). Without civil law being challenged, there are only a
handful of areas where common law could survive in this day and age. Only laws like contract
law and negligence are one of few common laws accepted across the globe. And even these
have seen codifications in different streams of law, like employment law or through legislation
like Civil Liability Act (Turner, 2013).
Thus, essentially both civil law and common law systems have their shortfalls and
advantages. Each law needs the other to be acceptable. However, in view of the author, the
civil law system is better than the common law system. This is because the common law system
involves a lot of interpretation, deliration and time for creation. A matter would transfer
between hierarchy of courts, go through evidentiary and hearings process, and after a long time
period, which is not certain, gets created. A civil law system on the other hand has a specific
time period for creation and follows a uniform structure to be formed. This removes
ambiguities from the process as often suggestions from public are sought for creating
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legislation in present age. Hence, it is safe to say that despite its flaws, the civil law system is a
more preferred legal system.
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References
Berkeley. (2017). The Common Law and Civil Law Traditions.
https://www.law.berkeley.edu/wp-content/uploads/2017/11/CommonLawCivilLawTrad
itions.pdf
Khedr, A.A., & Alnuaimi, B. (2010). A Guide to United Arab Emirates Legal System. New York
University School of Law.
https://www.nyulawglobal.org/globalex/United_Arab_Emirates.html
Tarbuck, A., & Lester, C. (2009). Dubai’s Legal System. Motivate Publishing.
https://www.lw.com/thoughtleadership/dubai-legal-and-regulatory-system
Beebeejaun, Z. (2020). The UAE Legal System. Goodfellowpublishers.
https://www.goodfellowpublishers.com/free_files/Chapter%203-
be26e259730cc91eabac019f4c930c7b.pdf
Cartwright, J. (2016). Contract Law: An Introduction to the English Law of Contract for the Civil
Lawyer. Bloomsbury Publishing.
Brand, P., & Getzler, J. (2012). Judges and Judging in the History of the Common Law and Civil
Law: From Antiquity to Modern Times. Cambridge University Press.
Turner, C. (2013). Unlocking Employment Law. Routledge.
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Novakovic, M. (2019). Common Law and Civil Law Today - Convergence and Divergence. Vernon
Press.
Cromwell, V. (2019). Common Law Vs. Civil Law: An Introduction To The Different Legal Systems.
BARBRI. https://barbriqlts.com/common-law-vs-civil-law-an-introduction-to-the-
different-legal-systems/
Williams, C. (2018, March 28). An Introduction To The Legal Landscape Of The UAE.
http://www.dubaichamber.com/dubaistartuphub/introduction-legal-landscape-uae/
U.ae. (2019, December 16). The Federal Judiciary. https://u.ae/en/about-the-uae/the-uae-
government/the-federal-judiciary
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