Where a family business dispute goes when nothing has been agreed

A dispute clause does not cause disputes and it does not prevent them. It settles, in advance, who sets the terms once agreement inside the family fails. Where no clause exists, the general law applying to the company answers that question instead.

Federal Decree-Law No. 37 of 2022 on Family Businesses supplies the default route. Article 19(1), headed Settlement of Family Business Disputes, provides that the articles of association or the charter may include a provision forming a board of partners, family members or third parties to consider disputes among partners, family members and the family business and attempt to reconcile them. The operative word is may. Where the constitutional documents are silent, no internal step exists.

Article 19(2) passes the matter to a committee in three situations: where the internal board is not provided for, where it has not reconciled the dispute within three months of its presentation unless extended by agreement, or where the parties have agreed not to refer their differences to it. Article 20 establishes that committee in each emirate by decision of the Minister of Justice or the head of the local judicial authority. Article 19(3) gives it three months to decide, extendable for a similar period on a reasoned request, and allows preventive and urgent measures to maintain the continuity of the business and prevent harm to its work, reputation or financial position. Under Article 19(4) its decisions are appealable to the competent court.

Scope conditions sit in Article 3. It excludes the joint stock company and the partnership company, applies in free zones only so far as it does not conflict with the relevant free zone's own legislation, and, where an emirate has local legislation regulating these companies, is limited to matters that legislation does not cover. Article 3(1) also has majority shareholders decide to register the company in the register Article 4 places with the Ministry.

In Dubai and Abu Dhabi these bodies exist. The Tribunal for Settlement of the Disputes of Family Businesses and Family Property in the Emirate of Dubai was formed by Administrative Resolution No. 14 of 2023 and is named in Law No. 9 of 2020 as amended by Law No. 21 of 2024. Abu Dhabi's committees were formed by Resolution No. 3 of 2026 of the Chairman of the Abu Dhabi Judicial Department; their decisions carry the legal force of a first instance judgment and are appealable under the Civil Procedures Law.

Arbitration forms no part of this default. Article 19(5) treats referral to arbitration, or to the courts of the financial free zones, as an exception available where the parties to the dispute agree on it. Under Federal Law No. 6 of 2018 on Arbitration, Article 7(1) requires that agreement to be in writing and Article 5(2) allows it to be made after the dispute has arisen, even where a case has been brought. That route depends on a counterparty agreeing once the dispute exists.

Ownership exits are addressed too. Article 9 requires a partner holding not less than 90 per cent of the shares to notify non-family partners of a wish to buy their shares, and one holding not less than 95 per cent of the voting shares to notify the remaining family partners. Article 9(2) has the committee value the shares by the mechanism stipulated in the articles of association or the charter and, where neither contains one, by experts it selects at the buyer's expense. Article 11 permits a family business to purchase no more than 30 per cent of its own shares, and in two cases only: reducing its capital, and redeeming the shares of a bankrupt or insolvent partner wishing to sell where no partner will buy them.

For a family with nothing recorded, the default reads as follows:

• no internal board, because Article 19(1) makes it optional
• an emirate committee as first specialist decision-maker under Article 19(2), an onshore court on appeal under Article 19(4)
• arbitration or a financial free zone court under Article 19(5) only by agreement of the parties to the dispute
• share valuation by experts the committee selects, absent a recorded mechanism

Silence does not remove the forum. It leaves the forum, the timetable and the valuation mechanism to the bodies the Decree-Law names rather than to the constitutional documents.

Sources, retrieved 11 August 2026: Federal Decree-Law No. 37 of 2022 and Federal Law No. 6 of 2018 from UAE government sources; Law No. 21 of 2024 from the Dubai Legislation portal; Dubai and Abu Dhabi government announcements.

This is educational content, written with law firms. It describes mechanisms and recommends none of them. Nothing here has been verified or endorsed by the programme as appropriate for any particular family, and a family should take its own legal advice on its own facts.