Understanding the situation
Business disputes in the UAE — over unpaid invoices, contract performance, partnership disagreements or similar issues — do not automatically need to go through a full court process. Many are resolved by the parties agreeing terms directly, sometimes with the help of a lawyer, consultant or mediator, before any claim is filed.
Whether a settlement is realistic depends on factors such as whether the underlying facts are seriously disputed, whether both parties still have a commercial relationship worth preserving, and whether either side is willing to compromise.
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What a pre-court settlement generally involves
The appropriate structure and content of a settlement agreement depend on the nature of the dispute and the applicable law — a settlement agreement is a legal document and is generally worth reviewing carefully before signing.
- Identifying the core issue in dispute and the amount or outcome each side is seeking.
- Direct negotiation, or negotiation through representatives, to reach agreed terms.
- Recording the agreed terms in a written settlement agreement, including what each party will do and by when.
- Considering what happens if either party does not comply with the settlement, which is usually addressed in the agreement itself.
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Practical steps
- 1Set out your position and the key facts clearly before entering discussions.
- 2Gather the relevant documents: contracts, invoices, correspondence and any prior agreements.
- 3Approach negotiations with a realistic view of what outcome is achievable.
- 4Put any agreement in writing before relying on it or acting on it.
- 5Keep a court-based process in mind as an alternative if settlement discussions do not progress.