Federal Decree-Law No. 50 of 2022 issued the Commercial Transactions Law, as part of a set of legislative amendments that were recently issued.
The Federal Decree-Law aims to provide a forward-looking and integrated legislative umbrella to enhance the UAE's leading position in formulating forward-looking development policies and supports the creation of a business environment in a manner that is consistent with its knowledge-based economic model, given that the business sector is a major partner supporting the country's developmental march, and the state is keen to provide all possibilities. necessary for the prosperity of its activities and increase its contribution to the growth of its gross domestic product; In light of this vision, a law was drafted that supports the diversification of commercial activities in the country and works to strengthen the UAE's position as an attractive and sustainable destination for foreign investments.
The following are the most important and prominent amendments to the Federal Decree Law in general:
Among the most prominent additions mentioned in the Decree Law is the introduction of the term “real or virtual business” and the term “Technical Media” and “Modern Technology”.
Commercial Contracts which are implemented and issued through modern technology are considered commercial businesses to which the provisions of this Decree-Law apply.
A new category has also been added and considered a commercial business in Article No. (6) of the Decree-Law, namely:
“Create, sell, rent, and manage platforms, websites, smart applications, data, artificial intelligence, and other digital transformation businesses.”
Legal Age:
A fundamental amendment was mentioned in the Federal Decree-Law regarding the legal age for engaging in trade, as the legal age for engaging in trade in the old law was 21 Gregorian years, while in the new law, it was reduced to 18 Gregorian years, in order to support the expansion of youth participation in the business sector and keep pace with the procedures followed in most countries around the world regarding this matter.
Regarding the permissible legal age for a minor, whether covered by guardianship or custodianship, he may engage in trade at the age of 15 years according to the new law, while according to the old law, he was 18 Gregorian years.
The legislator left this pending according to conditions and controls to be issued by a decision of the Minister of Economy at a later time.
Eligibility of Married Woman:
Substantial amendments have also been made to the eligibility of a married foreign woman to practice commercial business, equating her with the national woman in this regard, as Article 22 of the law stipulates: “It applies to the foreign woman’s professionalization of trade and her acquisition of the status of a merchant, with the provisions prescribed for the citizen who professionally practices the trade, including the provisions related to the independence of trade. and financial separation from the husband.”
Doing business for non-citizens:
The text of Article 23 of the old law was also rescinded, which stipulated that “non-citizens of the State may not engage in trade in it unless he has a partner or partners who are citizens of the State in accordance with the conditions and limits stipulated in the Companies Law.” And the text of the new law in Article 22 states that “ Non-citizens of the State may engage in trade in accordance with the conditions and controls and within the limits and cases for which a decision is issued by the Council of Ministers based on a proposal from the Minister of Economy.
Publication procedures:
With regard to the procedures for publishing, where in the old law it was “publishing in two daily newspapers...etc.” As in the new law, this was canceled and changed to “according to the procedures stipulated in the legislation in force in the State.”
Legal interest:
The value of the legal interest has also been modified and made to 9% until full payment instead of 12% As it was in the old law.
International sales:
With regard to international sales, the Decree-Law introduced a new article 130 which stipulated that “the parties may agree on the validity of the rules regulating international commercial sales issued by the International Chamber of Commerce, instead of the provisions contained in this section.”
Blood money for the deceased:
The Decree-Law also introduced a new text in Article 339 with regard to Chapter Three: The Contract for the Transport of Persons, in which it states, “The carrier’s liability for the death or bodily injury of the passenger shall be determined by the amount of blood money for the deceased by mistake according to the legislation in force in the State, and it is permissible to agree to determine this amount at no less than about the amount of that blood money.”
The lapse of time (Statute of limitations):
Article 340 related to the lapse of time that prevents hearing the case:
1. A claim of liability arising from the death or bodily injury of a passenger shall not be heard after the lapse of (3) three years from the day of death or accidental injury or from the date of knowledge of its cause.
2. Every other lawsuit arising from the contract of carriage of persons shall not be heard after one year has elapsed from the date specified for arrival, and in the absence of appointment, from the time that the ordinary carrier would have taken to arrive if it had existed in the same circumstances.
Revocation of the credit:
And in Article 428 regarding the opening of the credit, a new provision stated that if the credit is canceled in accordance with the provisions of this law, the bank is not obligated to fulfill the payment orders or checks drawn on the credit after the credit is canceled.
Commercial transactions of Islamic financial institutions:
Among the fundamental amendments introduced by the Decree-Law in Chapter Six is "Commercial Transactions of Islamic Financial Institutions", which regulates commercial transactions in which Islamic financial institutions are a party. This chapter consists of 29 articles.
For more details on the Commercial Transactions Law, please see the link below: