A charter with no forum to use it: the bodies a charter presupposes

A charter's provisions on conflict resolution operate through the forums a family has established. The Governance Guidelines published by the Dubai Centre for Family Businesses match those tools to the ownership stage of the business. A sole owner who runs the business personally is described as unlikely to need formalised conflict resolution mechanisms, family meetings or a family constitution. For a cousins' consortium, the same tools are described as indispensable. A family dynasty which runs the family business as a family investment is described as also requiring a family constitution and a family office.

The guidebook published by the Dubai Department of Economy and Tourism with the Dubai Centre for Family Businesses describes the usual shapes of those forums:

• a family assembly, which usually convenes as a yearly forum gathering all family members, described as the highest governing body of the family, aimed at facilitating communication, updating members on current topics concerning the family business and supporting the maintenance of family ties
• a family council, typically formed as a forum of select family members acting on behalf of the wider assembly, meeting regularly and acting akin to a board of directors, and usually overseeing conflict resolution, defining and modifying family policies, organising assembly meetings and carrying certain financial oversight tasks
• family committees, created as specialised forums limited to specific mandates whose members have specific expertise or interest in those mandates, for example family education, family philanthropy or family emergency committees

Charters commonly record an escalation order rather than a single forum. The Governance Guidelines set out a sequence in which matters affecting the family are typically resolved: the chairman, the head of the family council, a conflict resolution committee, and then arbitration. On composition, the guidelines state that where matters are referred to such a committee, it is important that it comprises informed, independent and objective outsiders who can perform their work impartially, without prejudice or favouritism.

The sample family constitution published by the centre specifies such a committee: its role is to address and resolve issues of conflict between the family shareholders, and it reports to the shareholders' council. The suggested number of members is three, being two family members and one non-family member, each over 50 years of age and described as wise, fair, well respected and holding high standards of ethics and integrity. Family members are elected by the shareholders' council on a simple majority vote, the term of office is four years, the quorum is all members present, and a member involved in a conflict stands down temporarily, with a temporary member elected in their place.

Behind the internal route sits a statutory one. The guidebook records that the first-instance referral of family business disputes in Dubai applies unless the family property contract, or the memorandum of association or charter of a family business, provides for the amicable settlement of disputes through a board to be formed from among the shareholders of a family company or from among family members. Dubai Resolution No. 14 of 2023, issued on 18 October 2023, formed the Tribunal for Settlement of the Disputes of Family Companies and Family Property in the Emirate of Dubai, and provides for family business disputes to be referred in the first instance to the Centre for Amicable Resolution of Disputes, failing which to the Family Disputes Settlement Committee at the Dubai Courts. In Abu Dhabi, Resolution No. 3 of 2026 formed family business dispute resolution committees, each consisting of a judge assisted by two experts in legal, financial and family business management fields, with a secretary. That resolution cites Article 19 of the 2022 law. Disputes are referred to the Dispute Settlement Centre where no family council exists or where the parties agree not to refer the matter to one.

Arbitration is available in both routes. The guidebook records that the 2022 law gives parties to a dispute the right to arbitrate both onshore and in the financial centres, and that it is not prescriptive as to the arbitration forum or seat. It records that alternative dispute resolution, for example arbitration, is encouraged by the DIFC Family Arrangements Regulations, citing Article 7.6 of those regulations, and notes that those regulations are likewise not prescriptive concerning the arbitration forum or seat.

On cadence, the Governance Guidelines record a set period in which the constitution is revisited, typically every two to three years, and the examination and renewal of the rules at minimum in every generational cycle.

This article is educational and is written with law firms. It describes general positions under the law in force and is not advice on any family's circumstances. A family should take its own legal advice. Nothing here indicates that the programme has verified or endorsed any structure, document or arrangement.