Civil Law and UAE Mediation Framework

1. Introduction

Mediation in the UAE is a structured alternative dispute-resolution mechanism through which a neutral mediator assists parties in reaching a mutually acceptable settlement rather than imposing a judgment.

The principal federal framework is now Federal Decree-Law No. 40 of 2023 on Mediation and Conciliation in Civil and Commercial Disputes. It provides a unified framework for mediation and conciliation, while local judicial systems may have their own procedures and institutions. The UAE Ministry of Justice identifies Federal Decree-Law No. 40 of 2023 as part of the country's principal judicial legislation.

The framework has also been supplemented by implementing decisions adopted in 2025. In January 2026, the Federal Judiciary Council described the resulting framework as covering judicial and consensual mediation, mediator selection, confidentiality, settlement approval, challenges to settlements and electronic mediation.

2. Meaning of Mediation

Mediation is different from litigation and arbitration.

Litigation

A judge determines the dispute and imposes a binding decision.

Arbitration

An arbitrator or tribunal determines the dispute and issues an award.

Mediation

The mediator does not normally decide who wins. The mediator facilitates negotiations so that the parties themselves can reach settlement.

Therefore:

Litigation → judicial determination

Arbitration → arbitral determination

Mediation → negotiated settlement

The UAE Government describes mediation as an alternative method for resolving civil and commercial disputes through an impartial third party.

3. Principal UAE Mediation Legislation

The central legislation is:

Federal Decree-Law No. 40 of 2023 on Mediation and Conciliation in Civil and Commercial Disputes.

The legislation replaced the earlier separate federal framework and integrates mediation and conciliation into a broader ADR system.

The law recognises:

• mediation;
• conciliation;
• mediation agreements;
• mediators;
• mediation centres;
• settlement agreements;
• confidentiality;
• judicial referral;
• electronic mediation;
• enforcement of approved settlements.

4. Scope of Mediation

The federal framework is broad.

Article 8 provides, in substance, that mediation may cover civil and commercial disputes in which settlement is legally possible, provided that settlement does not contradict applicable legislation, public order or public morals.

Mediation can concern:

• the entire dispute; or
• only part of the dispute.

It can therefore be used for matters such as:

• commercial contracts;
• construction disputes;
• shareholder disputes;
• banking disputes;
• insurance disputes;
• professional negligence;
• property disputes;
• supply contracts;
• technology disputes;
• damages claims.

5. Pre-Dispute Mediation Agreement

Parties can agree to mediate before a dispute arises.

For example, a contract may contain:

“Any dispute arising out of this agreement shall first be referred to mediation.”

This is useful because parties can establish their ADR procedure before relations deteriorate.

The 2023 legislation expressly recognises a mediation agreement made before the dispute arises. It can also be made after the dispute has arisen, including after litigation has commenced.

6. Post-Dispute Mediation Agreement

Parties may also decide to mediate after the dispute has already developed.

For example:

Contract → breach → lawsuit → parties agree to mediation

The existence of a court proceeding therefore does not necessarily prevent the parties from attempting settlement through mediation.

7. Written Mediation Agreement

The mediation agreement must satisfy statutory formal requirements.

It may be incorporated in:

• a contract;
• a separate agreement;
• written communications;
• electronic communications;
• court records;
• other legally recognised written formats.

The legislation also permits electronic documentation in accordance with UAE electronic-transactions legislation.

This is particularly important for modern commercial contracts where agreements are concluded electronically.

8. Authority of Representatives

A company cannot necessarily be bound simply because an employee participates in mediation.

The person representing a legal entity should have appropriate authority.

The 2023 framework recognises the importance of legal capacity and authority when entering a mediation agreement.

Therefore, companies should ensure that their mediation representative has authority to:

• negotiate;
• make settlement proposals;
• accept settlement;
• sign the settlement agreement.

9. Mediator

A mediator is a neutral third party who assists the parties in reaching settlement.

The federal framework provides for mediator lists and regulation of mediator qualifications and professional conduct. The 2025 implementing framework introduced additional mechanisms concerning registration, renewal, removal, complaints, training, recusal and professional discipline.

The mediator should not become an advocate for either party.

10. Neutrality and Impartiality

The credibility of mediation depends heavily on neutrality.

A mediator should disclose circumstances that could reasonably create concerns about:

• independence;
• impartiality;
• conflicts of interest;
• previous relationships with parties.

The implementing framework includes rules concerning mediator appointment, recusal and replacement.

11. Confidentiality

Confidentiality is one of the most important characteristics of UAE mediation.

Article 5 of Federal Decree-Law No. 40 of 2023 establishes confidentiality for mediation and conciliation proceedings.

Generally, mediation communications, documents and information should not be used before a court or other authority merely because they were produced during mediation, subject to statutory exceptions.

The settlement agreement itself is treated differently where disclosure is necessary for enforcement.

12. Without-Prejudice Protection

The purpose of confidentiality is to allow parties to negotiate openly.

For example, a party might say:

“We are prepared to pay AED 2 million to settle this dispute.”

If settlement fails, the party should not ordinarily face the argument:

“You admitted that AED 2 million was legally owed.”

The confidentiality structure helps prevent mediation negotiations from becoming ordinary litigation evidence.

The DIFC Courts have separately developed strong “without prejudice” protection for mediation communications. Practice Direction No. 6 of 2014 states that mediation communications are treated as made on a without-prejudice basis and generally cannot be relied upon in DIFC proceedings.

13. Mediation Does Not Normally Determine Liability

A mediator generally does not issue a judgment stating:

“The defendant is legally liable.”

Instead, the mediator may help the parties evaluate:

• strengths and weaknesses;
• litigation risks;
• costs;
• commercial interests;
• possible compensation;
• future relationships.

The parties retain control over whether to settle.

14. Settlement Agreement

If mediation succeeds, the parties may execute a settlement agreement.

A settlement can resolve:

• the entire dispute;
• selected claims;
• particular issues;
• payment obligations;
• future obligations;
• confidentiality;
• withdrawal of proceedings.

The federal framework defines settlement as a reconciliation reached through mediation or conciliation and provides a mechanism for approval and legal effect.

15. Enforceability of Settlement

One of the most important advantages of the UAE system is that an approved settlement can obtain the force and evidentiary effect of a court judgment.

Under Article 25 of the 2023 framework, a ratified settlement agreement is binding and irrevocable between the parties, subject to the statutory provisions, and has the same probative force as court judgments.

The Federal Judiciary Council's 2026 explanation likewise states that approved settlement agreements can receive an enforceable formula giving them the force of court orders.

16. Partial Settlement

Mediation does not have to resolve everything.

For example:

Claimant seeks AED 10 million for three causes of action.

The parties might settle:

• AED 4 million contractual claim;

while leaving:

• AED 6 million damages claim

for further proceedings.

The legislation expressly permits mediation of the dispute in whole or in part.

17. Court Referral to Mediation

Mediation can occur independently of litigation, but courts may also facilitate or refer disputes toward ADR.

The DIFC Courts provide an especially developed example.

DIFC Rule 27.3 permits judges, in appropriate circumstances, to invite parties to consider ADR. Part 27 expressly identifies mediation and conciliation as ADR mechanisms.

18. Mandatory Mediation in the DIFC

The DIFC framework goes further.

Under Practical Guidance Note No. 1 of 2021, the DIFC Court has a general discretion to refer parties to mandatory mediation at any stage.

Such referral can stay the court proceedings while the mediation process takes place. The court may make the referral:

• on a party's application; or
• on its own initiative.

This should not be confused with saying that every UAE dispute is subject to mandatory mediation. The exact requirement depends on the applicable forum and statutory framework.

19. DIFC Part 27

DIFC Part 27 provides a structured ADR framework.

Rule 27.2 identifies several reasons why ADR may be useful:

• reducing costs;
• avoiding litigation delay;
• preserving commercial relationships;
• preserving market reputation;
• providing solutions beyond those available through litigation;
• improving judicial resource use. 

20. Mediation and Judicial Case Management

Mediation can take place at different stages.

Before litigation

Parties voluntarily mediate.

After filing

The court may encourage or direct the parties toward mediation.

During case management

The court may determine that settlement discussions could be useful.

Before trial

Parties may attempt to resolve the dispute before substantial trial costs are incurred.

The DIFC Rules specifically permit ADR consideration before or during case management.

21. UAE Mediation and Digital Transformation

The UAE framework increasingly accommodates electronic mediation.

The 2025 implementing measures include rules for remote mediation, including:

• videoconferencing;
• identity verification;
• electronic notification;
• remote participation;
• interpreters;
• approved secure systems.

The framework also prohibits recording or photographing mediation sessions in the circumstances specified by the relevant rules, reinforcing confidentiality.

22. Federal Mediation E-Platform

The federal system also provides for an electronic platform for mediation and conciliation.

This reflects a broader UAE movement toward:

• e-litigation;
• digital case management;
• electronic evidence;
• online dispute resolution.

The Ministry of Justice had already introduced its “Wasata” mediation platform before the 2023 legislation, enabling civil and commercial disputes to be handled electronically through registered mediators.

23. Mediation vs Conciliation

The two concepts should be distinguished.

Mediation

The mediator primarily facilitates communication and negotiation.

Conciliation

The conciliator may take a more active role in helping the parties formulate a settlement.

Federal Decree-Law No. 40 of 2023 regulates both mechanisms within the same broader framework.

24. Mediation and Arbitration

Mediation and arbitration can be combined.

A contract might provide:

Step 1: Mediation
↓
Step 2: Arbitration if mediation fails.

This is commonly called a multi-tier dispute-resolution clause.

The mediation stage is intended to give parties an opportunity to settle before incurring the costs of arbitration.

The federal law permits mediation concerning disputes that are legally capable of settlement.

25. Mediation and Court Litigation

Similarly:

Dispute → Mediation → Settlement

or

Dispute → Litigation → Court-referred Mediation → Settlement

If mediation fails, the underlying dispute may proceed according to the applicable procedural rules.

Thus, mediation does not necessarily eliminate the right to judicial determination when settlement cannot be achieved.

26. Six Important UAE Case Laws

A significant qualification is necessary: UAE reported jurisprudence specifically interpreting the 2023 Mediation Law is still developing. Consequently, several useful authorities below are DIFC decisions/orders dealing directly with mediation, settlement, confidentiality or court referral. They are UAE authorities but should not be presented as binding interpretations of the federal mainland mediation statute.

Case 1 — Asif Hakim Adil v Frontline Development Partners Ltd

[2014] DIFC CFI 015

This case involved settlement discussions between the parties.

The Court examined communications that developed into a settlement process and considered whether those communications were merely commercial negotiations or part of a genuine settlement process.

The Court concluded that the discussions had developed beyond ordinary commercial negotiations and ultimately resulted in settlement terms covering several matters.

Principle

The substance and circumstances of negotiations matter when determining whether communications form part of a settlement process.

Importance

This case is useful when distinguishing:

• ordinary commercial negotiations;
• settlement negotiations;
• mediation communications;
• binding settlement agreements.

27. Case 2 — Alexandra Wilson v Simmons & Simmons Middle East LLP & Another

[2020] DIFC CFI 029

The Court issued detailed mediation directions.

The order required:

• participation in mediation in good faith;
• confidentiality;
• participation by representatives and lawyers;
• mediator confidentiality;
• protection of mediation documents;
• non-use of mediation admissions and proposals in subsequent litigation.

The order also stated that a settlement would not become legally binding until recorded in writing and signed by an authorised representative.

Principle

A properly structured mediation requires:

confidentiality + authorised participation + written settlement + procedural discipline.

28. Case 3 — NBE (DIFC) Limited v Mohamed Elsayed Hamed Omran

[2021] DIFC CFI 001

The parties engaged in ADR and the court proceedings were stayed to permit settlement discussions.

The parties subsequently entered into a confidential settlement agreement, and the proceedings were discontinued by consent.

Principle

A court proceeding can be stayed temporarily to permit ADR, after which successful mediation can result in settlement and discontinuance of the litigation.

29. Case 4 — William Daniel Milligan v Al Mojil Investment Ltd & Mohammed Al-Mojil Group

[2016] DIFC CFI 037/2015

The parties agreed to stay proceedings so that mediation could take place.

The court:

• stayed the proceedings;
• provided a period for mediation;
• required the parties to update the court on progress;
• contemplated extension of the stay if necessary.

Principle

Mediation can be integrated into active judicial case management without terminating the underlying proceedings.

30. Case 5 — Mahesh Srichand Tourani v Dusty Tourani & Duzty LLC

[2018] DIFC CFI

Before trial, the judge encouraged the parties to attempt mediation concerning the dispute and related disputes.

The judge also directed that another DIFC judge conduct the mediation so that the trial judge would not become exposed to settlement communications that could affect the later adjudication.

Principle

There should be a meaningful separation between the mediator and the adjudicator where necessary to protect the fairness and integrity of subsequent proceedings.

31. Case 6 — Zuzana Kapova v Miloslav Makovini & Others

[2023] DIFC CFI 004/2023

This case concerned enforcement of a settlement agreement and the procedural relationship between the settlement agreement and a consent order.

The court considered whether the procedural form used by the parties gave the court power to enter judgment enforcing the settlement and examined issues concerning the construction and enforceability of the settlement agreement.

Principle

A mediated settlement must be properly documented and procedurally structured if the parties expect direct judicial enforcement.

This is particularly important where a settlement is intended to function as the final resolution of existing proceedings.

32. Case 7 — Marwan Mahmoud Khadour v Yousef Salah Hawash & Others

[2022] DIFC CFI 026

The relevant agreement contained a dispute-resolution clause requiring the parties to use their best endeavours to settle disputes through formal mediation before resorting to the Dubai Courts.

The case therefore illustrates the importance of carefully drafted multi-stage dispute-resolution clauses.

Principle

A mediation clause can be contractually integrated into the parties' dispute-resolution mechanism.

33. Case 8 — Ondina v Olin

[2025] DIFC CFI 046/2025

The case involved an employment settlement agreement and the DIFC Employment Law provisions concerning settlement of employment disputes.

The Court considered the statutory requirements governing waiver of employment rights through a written agreement, including circumstances where the parties participated in court-provided mediation.

Principle

Mediation can have particular statutory significance where legislation establishes specific conditions under which rights may be waived or disputes settled.

34. Confidentiality: Practical Case Authority

The Alexandra Wilson order is particularly useful for understanding the practical operation of confidentiality.

The court's mediation order protected:

• information disclosed during mediation;
• documents produced for mediation;
• settlement terms;
• mediator communications.

It also prevented parties from using mediation admissions and proposals as evidence in later litigation or arbitration, subject to stated exceptions.

This corresponds closely with the broader confidentiality philosophy of the federal 2023 legislation.

35. Mediation Costs

Mediation is generally intended to reduce dispute-resolution costs, but it is not necessarily cost-free.

Costs may include:

• mediator fees;
• administrative fees;
• lawyers' fees;
• expert expenses;
• venue or technology costs.

The federal framework regulates mediation costs, and the implementing framework also addresses mediator fees and expenses.

The DIFC framework similarly permits the court to make directions concerning mediation costs.

36. Good-Faith Participation

Mediation depends on meaningful participation.

A party should generally:

• attend properly;
• have authority to settle;
• provide sufficient information;
• consider proposals seriously;
• avoid deliberately frustrating the process.

In Alexandra Wilson, the court order expressly required the parties to participate in mediation in good faith.

However, mediation should not be confused with compulsory acceptance of a settlement. A party may participate seriously and still decide not to settle.

37. Role of Lawyers

Lawyers can play several roles during mediation:

• explaining legal rights;
• evaluating litigation risk;
• calculating damages;
• preparing settlement proposals;
• advising on tax or regulatory consequences;
• drafting the settlement agreement;
• ensuring enforcement provisions are effective.

But the ultimate settlement decision normally belongs to the client or authorised representative.

38. Settlement Authority

One of the most important practical requirements is ensuring that the person attending mediation has authority to settle.

In Alexandra Wilson, the mediation order required a representative of the defendant to have authority to agree a settlement on its behalf.

This avoids a situation where:

“We reached agreement, but our representative was not authorised to bind the company.”

39. Mediation in Construction Disputes

Construction disputes are particularly suitable for mediation because parties may have ongoing commercial relationships.

Typical issues include:

• delay;
• defects;
• payment;
• variations;
• extensions of time;
• liquidated damages;
• retention;
• performance bonds.

Instead of terminating the relationship, mediation may produce a negotiated solution such as:

partial payment + extension of time + repair works + release of claims.

40. Mediation in Commercial Contracts

For commercial disputes, mediation can preserve relationships.

For example:

Supplier claims AED 5 million from distributor.

Instead of deciding only:

Supplier wins / distributor loses

the parties could negotiate:

• reduced payment;
• future supply;
• revised pricing;
• payment schedule;
• contractual amendment;
• withdrawal of proceedings.

This flexibility is one reason DIFC Part 27 expressly recognises the ability of ADR to produce solutions broader than those available through ordinary litigation.

41. Mediation in Employment Disputes

Employment mediation may address:

• unpaid compensation;
• termination disputes;
• contractual benefits;
• settlement of claims;
• confidentiality;
• references;
• release of claims.

The Ondina v Olin decision demonstrates that statutory employment requirements can affect whether a settlement or waiver is legally effective.

42. Mediation in Family and Relationship Disputes

Mediation can also be valuable where parties have continuing relationships.

Examples:

• family businesses;
• shareholder relationships;
• long-term commercial partnerships;
• property co-ownership.

The DIFC's mediation guidance specifically identifies existing relationships as a circumstance that may support referral to mediation.

43. Mediation and Public Order

Not every dispute can necessarily be settled in any manner the parties choose.

Federal Decree-Law No. 40 of 2023 limits mediation to disputes where settlement is legally possible and consistent with:

• applicable legislation;
• public order;
• public morals.

Therefore:

Party autonomy in mediation is substantial but not unlimited.

A settlement cannot simply contract out of mandatory legal requirements.

44. Mediation and Interim Relief

Mediation does not necessarily prevent a party from seeking urgent judicial protection.

The current DIFC Mediation Service Centre's model clause expressly contemplates that commencement of mediation does not prevent a party from seeking interim relief.

For example:

Mediation → urgent injunction → mediation continues

may be possible where the applicable procedural framework permits it.

45. Failure of Mediation

If mediation fails:

1. the mediator does not normally decide the dispute;
2. the parties remain free to pursue the available legal process;
3. confidentiality protections continue to apply;
4. mediation offers generally should not become ordinary evidence merely because settlement failed.

The purpose is to allow parties to negotiate freely without fearing that unsuccessful proposals will later be used against them.

46. Mediation and Settlement Enforcement

The enforcement chain can be understood as:

Dispute

↓

Mediation

↓

Settlement Agreement

↓

Judicial Ratification/Approval where required

↓

Enforceable settlement

The federal framework gives ratified settlements strong legal effect, including the probative force of judgments.

47. New UAE Institutional Developments in 2025–2026

The UAE mediation framework has recently become more institutionalised.

The Federal Judiciary Council's 2026 announcement describes measures covering:

• specialised mediation and conciliation centres;
• mediator admission;
• mediator professional conduct;
• mediator discipline;
• mediator registration;
• remote mediation;
• electronic procedures;
• confidentiality;
• settlement approval.

Specialised centres were approved for Ajman, Fujairah, Umm Al Quwain and Dibba Al Fujairah under Decision No. 90 of 2025.

48. DIFC Mediation Service Centre

The DIFC Courts launched a dedicated Mediation Service Centre in September 2025.

The centre provides a structured mediation route alongside DIFC litigation. It allows electronic participation and provides mechanisms through which settlements can become directly enforceable through the DIFC Courts where the applicable requirements are met.

In 2026, the DIFC Courts also introduced a six-month commercial mediation scheme running from 1 July to 31 December 2026.

This demonstrates the increasing institutional role of mediation in the UAE's dispute-resolution architecture.

49. Federal UAE vs DIFC Mediation

The two systems should therefore not be treated as identical.

50. Important Case-Law Revision Table

These authorities should be described as DIFC/UAE mediation authorities, rather than as a body of binding precedent interpreting every aspect of Federal Decree-Law No. 40 of 2023 in mainland courts.

51. Advantages of Mediation

1. Speed

A negotiated settlement may resolve a dispute without a full trial.

2. Cost reduction

It can reduce:

• court fees;
• lawyers' fees;
• expert costs;
• disclosure costs;
• hearing costs.

3. Confidentiality

Parties can negotiate without ordinary public trial exposure.

4. Flexibility

The settlement can include solutions a court may not ordinarily order.

5. Relationship preservation

This is especially important for:

• business partners;
• employers and employees;
• suppliers and customers;
• shareholders.

6. International usefulness

Cross-border parties can participate remotely and negotiate commercially acceptable solutions.

DIFC Part 27 expressly identifies cost, delay, commercial relationships and flexibility among the reasons for using ADR.

52. Limitations of Mediation

Mediation also has limitations.

No guaranteed settlement

The parties may fail to agree.

Power imbalance

A financially stronger party may have greater bargaining resources.

Delay

Poorly managed mediation can simply add another stage.

Confidentiality concerns

Parties must understand exactly what is protected and what must be disclosed by law.

Authority problems

A representative without settlement authority may make the process ineffective.

Enforcement problems

An inadequately drafted settlement can create a second dispute.

Unsuitable disputes

Some disputes require authoritative judicial determination rather than negotiated compromise.

53. Practical UAE Mediation Process

A simplified process is:

1. Identify dispute

↓

2. Check mediation clause/statutory requirement

↓

3. Select mediator

↓

4. Confirm authority of representatives

↓

5. Exchange necessary information

↓

6. Conduct confidential mediation

↓

7. Identify settlement options

↓

8. Draft settlement agreement

↓

9. Obtain necessary approval/ratification

↓

10. Enforce if required

The precise procedure differs between the federal system, individual emirates and specialist jurisdictions such as the DIFC.

54. Example

Suppose a contractor claims AED 8 million from a developer for unpaid construction work.

The developer alleges:

• AED 3 million of the work was defective;
• AED 2 million was delayed;
• AED 3 million remains payable.

Instead of litigation, mediation could produce:

• AED 4.5 million immediate payment;
• contractor completes specified remedial works;
• developer releases remaining claims;
• contractor releases interest claims;
• both parties preserve their commercial relationship.

The mediator does not necessarily decide that AED 4.5 million is legally correct.

The parties choose the settlement themselves.

55. Key Legal Principles

For examination and revision, remember:

1. Federal Decree-Law No. 40 of 2023 is the principal federal UAE mediation statute.
2. Mediation applies broadly to civil and commercial disputes capable of lawful settlement.
3. Mediation can occur before or after a dispute arises.
4. A mediation agreement must satisfy statutory form and authority requirements.
5. Confidentiality is a fundamental feature.
6. Mediation communications generally receive protection from use in subsequent proceedings, subject to statutory exceptions.
7. The mediator facilitates rather than adjudicates.
8. A settlement may resolve the whole or only part of a dispute.
9. Ratified settlements receive strong legal effect.
10. Electronic and remote mediation are now expressly supported by the UAE framework.
11. DIFC Part 27 provides a particularly developed judicial ADR mechanism.
12. DIFC courts can refer appropriate cases to mediation.
13. Mediation can be incorporated into multi-tier dispute-resolution clauses.
14. Settlement authority of corporate representatives is critical.
15. Failure of mediation does not ordinarily determine the underlying dispute.
16. Proper drafting of the final settlement agreement is essential.

56. Conclusion

The UAE Mediation Framework has evolved from a collection of conciliation mechanisms into a much more integrated ADR system.

The central federal legislation is Federal Decree-Law No. 40 of 2023, supported by implementing measures adopted in 2025–2026. The framework addresses mediation agreements, mediator regulation, confidentiality, judicial referral, electronic procedures, settlement agreements and enforcement.

The DIFC provides an additional and particularly developed model through Part 27, judicial referral mechanisms and its Mediation Service Centre.

The leading UAE/DIFC authorities demonstrate several recurring principles:

Confidentiality + Neutrality + Voluntary Settlement + Proper Authority + Written Agreement + Judicial Enforceability

Thus, mediation in UAE civil law is not merely an informal negotiation. It is increasingly a structured legal mechanism for resolving disputes while reducing litigation, protecting confidentiality and preserving commercial relationships.