Damages under UAE Law in the context of - Habib Al Mulla

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tenant was contaminated. So, the difference between rents is the direct and foreseeable damage; the damages to the furniture are direct but unforeseen; and the disease or contagion is indirect damages. Second, the parties at the time of contracting should have foreseen the damages. This condition results from the pacta sunt servanda principle; the parties have contracted on what was foreseeable to them; the debtor can only be obliged for what he would have expected, predicted or foreseen (the word “tawaka’” in Arabic can be translated to these three verbs) as damages. Additionally, damages should be foreseen in cause and value. For example, where a post company agreed to deliver a courier and the envelop is lost while couriered, and then it was revealed that the envelop contained money or gold, a thing that the post company did not foresee at the date of contracting, the post company will be liable for reasonable damages, as the post company has not foreseen the envelope’s value. The foreseeability of the cause meaning that at the time of contracting, the debtor could have not supposed that non-performance would have resulted in such damage. The foreseeability of the amount meaning that at the time of contracting, the debtor could suppose that nonperformance would have resulted in such damages, but could have not supposed that the damage is of that importance. Thirdly and finally the foreseeability should have occurred at the date of contracting and is assessed in abstracto and objectively (a comparison is made to the notion of ’ordinary man’). The damages expected should be the ones that an ordinary man would have predicted if he was to find himself in the same contractual circumstances taking into account the possibility of claiming for other categories of contractual damages such as loss of profits and loss of opportunity and moral damages as detailed at length at section two of this article under Types of Damages under UAE law. Karim J. Nassif, Partner Celine Abi Habib Kanakri, Senior Associate Habib Al Mulla & Company For further information on this article or any other area of UAE law, please contact us. This article was first published in the In House Lawyer © Habib Al Mulla & Company 2011 This material is intended for general information only and should not be considered as legal advice. For further information, please contact us. 1 Please see ‘Litigating in the UAE: initial guidance’ by the author and Gordon Blanke, the The In-House Lawyer, December 2009 – January 2010, Issue 176, pages 3 to 7. 2 Dubai Court of Cassation, petition no. 41/2007; 15/04/2007; Dubai Court of Cassation, petition no. 37/2004; 18/09/2004. 3 We shall not elaborate in this article on the notion of breach under UAE law; however UAE law recognises the error and negligence concepts and differentiates between gross and simple errors. 4 The causal link or causation is one of the elements of the contractual liability; when causation does not exist, no contractual liability exists as well and subsequently, no compensation is awarded. The Dubai Court of Cassation indicated in two rulings that “causation is presumed to exist unless the debtor proves that damages resulted from force majeure, the creditors acts or the acts of a third party” [Dubai Court of Cassation,
petition no. 41/2007; 15/04/2007; Dubai Court of Cassation, petition no. 37/2004; 18/09/2004]. 5 The explanatory note is an official commentary of the Civil Code issued by the UAE Ministry of Justice and purported to explain the provisions of the Civil Code. In addition, the Dubai Court of Cassation refers to it in several rulings; in fact, the court cites the relevant explanation of a legal provision in the main paragraph of the ruling and explicitly refers to the explanatory note [Dubai Court of Cassation, petition no. 130/2006, dated 10/09/2006; Dubai Court of Cassation, petition no. 562/2003, dated 20/03/2004]. 6 Explanatory Note of the Civil Code, pages 393 and 394 7 Dubai Court of Cassation – Cassation petition no. 51/2007 – dated 29/04/200; Dubai Court of Cassation – Cassation petition no. 46/2006 – dated 8/5/2006 8 Dubai Court of cassation no. 134 for the year 2006; judgment 10/9/2006. Dubai Court of cassation no. 195 for the year 2003; judgment 22/6/2003. Dubai court of Cassation no. 15 for the year 2002; judgment 9/3/2002 9 Federal Supreme Court of Abu Dhabi, no. 356 for the 23rd year; judgment 19/10/2004. Dubai court of Cassation, no. 63 for the year 2005; judgment 26/06/2005. 10 Dubai Court of Cassation, petition no. 1/2005, dated 25/04/2005 ; Dubai Court of Cassation, petition no. 28/2004, dated 17/10/2004.
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