The Federal Supreme Court’s application of the new commercial agency law in relation to appeal period
Dispute Resolution / UAE
This case examines a commercial agency dispute, where the Federal Supreme Court clarified the application of new procedural time limits under the updated Commercial Agencies Law. The ruling impacts future agency-related cases.
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El Ameir NoorPartner,Dispute Resolution
Willem SteenkampPartner,Corporate Commercial
Zane AnaniSenior PSL (Consultant),Dispute Resolution
In a recent Federal Supreme Court judgment (Federal Supreme Court judgment No. 182 of 2024), the court clarified the application of the new Commercial Agencies Law No. 3 of 2022 (the new Commercial Agency Law) and the rights and obligations of commercial agents and principals under the new law. This case concerned a dispute between a commercial agent and a principal over the termination of their agency contract and the payment of compensation and indemnity. The judgment confirms the principle that procedural time limits in the new commercial agency law apply with immediate effect to proceedings commenced while they were in force, even if the events giving rise to the dispute occurred before the enactment of the new law.
This case concerned a dispute over a commercial agency agreement. The Federal Supreme Court granted the appeal of the Appellant (the principal) and reversed the decision of the Court of Appeal. The Court of First Instance as upheld by the Court of Appeal had dismissed the Appellant’s action as being filed beyond the period specified to challenge the Commercial Agencies Committee’s (CAC) decision. The Appellant had sought to cancel a decision by the Commercial Agencies Committee (CAC) that awarded compensation to the Respondent and rejected the request to cancel the agency registration. The Appellant argued that the CAC decision was invalid and that the commercial agency agreement (registered by the Respondent) should be cancelled. The Court of First Instance and Court of Appeal held that the appeal period to challenge the CAC decision was 30 days in accordance with the old commercial agency law. The Federal Supreme Court applied the new Commercial Agencies Law that extended the time limit for challenging a CAC decision from 30 to 60 days, and remanded the case to the Court of Appeal for consideration.
The Federal Supreme Court (FSC) decided in the Appellant’s favour. The FSC granted the Appellant's cassation appeal and reversed the Court of Appeal's decision that had dismissed the appellant's action as time-barred. The FSC held that the Court of Appeal erred in applying the old Commercial Agencies Law that stipulated a 30-day deadline for challenging a Commercial Agencies Committee (CAC) decision, instead of the new Commercial Agencies Law that extended the deadline to 60 days. The FSC found that the Appellant had filed its action within the 60-day period from the date of notification of the CAC's decision, and therefore the action was formally admissible. The FSC remanded the case to the Court of Appeal for consideration of the merits of the Appellant's action, which sought to cancel the CAC's decision and to strike off the commercial agency registered in the name of the Respondent.
This judgment is important because it clarifies the application of the new Commercial Agencies Law, which came into force on 16 June 2023, to disputes arising out of events that occurred before its enactment. It affirms the principle that statutory provisions apply only to events occurring after their entry into force, unless the legal position has been perfected, and that procedural time limits apply with immediate effect to proceedings commenced while they were in force. This judgment also ensures that a challenge to a CAC decision that involves a claim of wrongful registration of a commercial agency (such as in this case), is not dismissed on a technicality and is heard on its merits.
As mentioned above, the judgment was issued when the old commercial agency law was in force, but the appeal was filed after the old commercial agency law was replaced by the new commercial agency law. The Federal Supreme Court held that:
Laws apply with immediate effect to events occurring after their entry into force and not to occurrences that took place before their enactment, unless the legal position has not been completed under the old law.
Procedural time limits apply with immediate effect to proceedings commenced while they were in force even if such proceedings arose out of prior events.
The key factor is the date of publication of the law, which applies with immediate effect even if the time limit began to run before the entry into force of the new law. The time limits of the old law would no longer apply. The deadline for initiating proceedings with respect to cancellation applications is 60 days from the date of publication of the administrative decision being challenged or service of the same on the concerned part.
For further information,please contact El-Ameir Noor, Willem Steenkamp and Zane Anani.
Published in October 2024
