Reserved matters and deadlock: what the documents do when the family cannot agree

Reserved matters are decisions lifted out of ordinary management and given to a defined majority of owners. Deadlock provisions describe what happens when that majority cannot be assembled. Both are threshold questions, and UAE and Dubai law set thresholds where the documents are silent.

Defaults include:

• Federal Decree-Law No. 37 of 2022: three quarters of the capital to approve a disposal to a non-family member (Article 8(2)); the majority of the shares represented in the general assembly meeting for a purchase by the company of its own shares (Article 11(2)); at least fifty-one per cent of those shares to appoint a manager where the memorandum does not appoint one (Article 14(1)). In each case the memorandum may stipulate another percentage.
• Article 6(4): the charter is approved or amended by a majority of the Family Council members, or of the partners from the family where there is no council. Article 23(4): partners holding at least three quarters of the capital may request deregistration from the Register.
• The Ministry's account of its 2023 decision on multiple share classes: where the founding documents do not specify the conditions, modifying share categories requires seventy-five per cent or more of the partners with voting rights.
• Dubai Law No. 9 of 2020: a family property contract is amended by partners owning at least seventy-five per cent unless it provides for a higher percentage (Article 10); and it may be terminated before expiry by partners owning at least fifty-one per cent (Article 22).

Article 12 of the Decree-Law separates voting from economic rights: class A shares carry profits and a vote, class B shares profits without a vote, and the memorandum may stipulate conversion conditions and further classes differing in value, voting power and profits. Published analyses of Federal Decree-Law No. 20 of 2025 record a new Article 76(4) of the Commercial Companies Law permitting a limited liability company to divide partners' shares into classes.

The Decree-Law then sets an escalation ladder.

• Article 19(1): the memorandum or the charter may include a provision forming a board of partners, family members or third parties to consider disputes and try to reconcile the parties, and determining its members and powers.
• Article 19(2): where there is no such provision, or the board fails within three months of the dispute being presented to it unless extended by agreement, or the parties agree not to refer it there, then unless the memorandum stipulates otherwise the committee considers it.
• Article 19(3): the committee decides within three months, extendable for a similar period on a grounded request, and may take preventive and urgent measures to maintain the company's continuity.
• Articles 19(4) and 19(5): its decisions may be appealed before the competent court, and the parties may instead agree to arbitration or to the courts of the financial free zones.
• Article 22(1): where an explicit provision is lacking or ambiguous, the memorandum and the charter are interpreted in accordance with the common intention of the founders and partners.

Dubai has its own route. Dubai Law No. 21 of 2024 defines the Tribunal as the body formed under Administrative Resolution No. 14 of 2023, and replaces Article 23 of Dubai Law No. 9 of 2020 so that it hears all disputes arising from family property contracts under the procedures it adopts. The Dubai Government announcement of 24 October 2023 states that the body it describes is chaired by a judge of a rank not lower than appeal judge, assisted by two members experienced in the legal, financial and family business management fields appointed on the recommendation of the Director General of Dubai Chambers. It states that where the founding documents provide for settlement through a Family Members Council the body refers the dispute there first, and that its remit covers contract expiry, termination of family business status, share pricing, redemption rights and changes in share categories.

Deadlock provisions in shareholders' agreements commonly take one of a few shapes: escalation to named individuals, mediation, a put or call option, or a mutual offer in which one side names a price and the other elects to buy or sell at it. Each shape ends in a transfer, and a transfer requires a price. Article 9 is not one of those shapes: it gives the large holder a duty to notify and the other partners an option to sell, with no power on either side to compel completion. Where a family company reaches that notice-and-option point under Article 9 and the other partners choose to sell, Article 9(2) has the committee select the experts if neither document holds a valuation mechanism.

In the Dubai International Financial Centre, Regulation 7.6 of the Family Arrangements Regulations 2023 gives an arbitration provision in the instrument governing a family entity or family business effect under the DIFC Arbitration Law as if it were an arbitration agreement, and does the same where the parties agree in writing to arbitrate after a dispute arises.

Sources, all retrieved 11 August 2026. Federal Decree-Law No. 37 of 2022: https://www.moet.gov.ae/documents/20121/0/family+company+english+version+examined+and+correcetd.pdf Ministry of Economy and Tourism announcement, 26 December 2023: https://www.moet.gov.ae/en/-/ministry-of-economy-launches-unified-family-businesses-registry-and-reviews-four-new-decisions-to-strengthen-the-sector-s-governance Galadari Law on the 2025 amendments, including Article 76(4): https://galadarilaw.com/news/federal-decree-law-20-2025-uae/ Dubai Law No. 9 of 2020: https://dlp.dubai.gov.ae/Legislation%20Reference/2020/Law%20No.%20(9)%20of%202020%20Regulating%20Family%20Property%20in%20the%20Emirate%20of%20Dubai.pdf Dubai Law No. 21 of 2024: https://dlp.dubai.gov.ae/Legislation%20Reference/2024/Law%20No.%20(21)%20of%202024%20Amending%20Law%20No.%20(9)%20of%202020%20Regulating%20Family%20of%20Dubai.pdf Dubai Government announcement, 24 October 2023: https://www.protocol.dubai.ae/en/media-listing/news-events/maktoum-bin-mohammed-issues-resolution-for-formation-of-family-business-and-family-ownership-disputes-settlement-committee/ DIFC Family Arrangements Regulations 2023: https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/difc_docs/annex_a_-_family_arrangements_regulations.pdf?sc_lang=en

This content is written with law firms as an educational reference on how these mechanisms appear in current law. It is not legal, tax or financial advice, no provision described here has been verified or endorsed by the programme, and a family takes its own advice on its own circumstances.