The ongoing conflict situation in the Persian Gulf, particularly the increasing tensions between the United States and Iran, has created a new reality for investors in the United Arab Emirates.
What was long considered a stable and predictable market is increasingly revealing structural fault lines – with immediate implications for the legal enforceability of economic interests.
Challenges in Daily Business – Legally Escalating
Geopolitical uncertainties are intensifying into legally relevant conflict situations:
- Contractual Disruptions: Disruptions in supply chains and geopolitical risks lead to performance deviations, which fall directly under Article 246 of the UAE Civil Code (contract performance in good faith).
- Payment Delays:
Stricter KYC and compliance requirements lead to de facto impediments to performance – resulting in potential claims for damages under Article 282 of the UAE Civil Code. - Abrupt Business Terminations: Terminations without sufficient legal basis raise questions of breach of contract and tortious liability.
These developments mean that out-of-court solutions are increasingly failing, and legal proceedings are becoming unavoidable.
Judicial Legal Enforcement: System Change with Doctrinal Risks
For European investors, seeking judicial assistance in the UAE represents a significant step into an entirely unfamiliar system.
Critical Success Factors in Practice
Especially under conditions of geopolitical uncertainty, typical sources of error accumulate:
- Incorrect or unenforceable service of process.
- Insufficient documentation of contractual agreements.
- Incorrect jurisdiction agreements (Onshore Courts vs. DIFC Courts).
- Lack of integration between international and local legal representation
These deficiencies regularly lead not only to delays but to the complete loss of claims.
The Inevitable Consequence: Bilateral Legal Architecture
Against this backdrop, bilateral legal support from the outset is imperative.
An integrated structure is required, comprising:
- European claim preparation (doctrinal derivation, evidence structure, strategic claim management).
- Local procedural implementation (conduct of proceedings, service, enforcement).
Litigation is no longer an exception but an integral part of international business models.
