Civil Law and UAE Mergers and Acquisitions Dispute Litigation

1. Introduction

Mergers and acquisitions (“M&A”) disputes in the UAE arise when a transaction involving the purchase, sale, merger, restructuring, or transfer of a business does not proceed according to the parties’ contractual or statutory expectations.

Typical disputes concern:

• breach of a Share Purchase Agreement (“SPA”);
• failure to complete closing;
• purchase-price disputes;
• warranties and representations;
• undisclosed liabilities;
• fraud or misrepresentation;
• earn-outs and deferred consideration;
• conditions precedent;
• shareholder rights;
• valuation;
• minority-shareholder claims;
• non-compete obligations;
• indemnities;
• escrow arrangements;
• corporate approvals;
• transfer of shares;
• beneficial ownership;
• post-closing claims;
• jurisdiction and arbitration;
• enforcement of foreign or arbitral awards.

For UAE transactions, the legal analysis can involve federal company law, the Civil Transactions Law, contract law, competition/sectoral regulation, securities regulation, foreign-ownership rules, and the law of the relevant free zone.

A particularly important distinction is between mainland UAE transactions and transactions governed by DIFC or ADGM law. The DIFC cases discussed below are UAE cases and are highly useful for understanding M&A litigation, but they should not automatically be treated as binding precedents on mainland UAE courts.

2. Principal UAE Legal Framework

The principal legislation potentially relevant to M&A disputes includes:

1. UAE Companies Law

The principal federal framework is Federal Decree-Law No. 32 of 2021 on Commercial Companies, subject to amendments and sector-specific legislation.

It regulates matters such as:

• incorporation;
• share ownership;
• transfers;
• management;
• directors;
• shareholders;
• mergers;
• acquisitions/restructuring;
• corporate resolutions;
• corporate governance;
• liquidation.

2. UAE Civil Transactions Law

The current mainland civil-law framework is Federal Decree-Law No. 25 of 2025 on the Civil Transactions Law, effective from 1 June 2026.

It supplies general principles concerning:

• contractual obligations;
• performance;
• breach;
• damages;
• causation;
• compensation;
• good faith;
• interpretation;
• unjust enrichment;
• abuse of rights.

3. Securities legislation

Public-company acquisitions can additionally involve:

• Securities and Commodities Authority rules;
• takeover regulations;
• disclosure requirements;
• market-abuse provisions;
• public-offer requirements.

4. Competition law

Transactions that constitute economic concentrations can raise issues under UAE competition legislation, particularly where merger/acquisition activity produces regulatory concerns.

5. Free-zone legislation

DIFC and ADGM transactions may be governed by their own:

• company laws;
• contract laws;
• insolvency legislation;
• court rules;
• arbitration laws.

3. What Is an M&A Dispute?

An M&A dispute generally occurs when one or more parties contend that the transaction has not been performed according to the agreed terms.

A simple transaction might be:

Seller → sells shares → Buyer → pays consideration

But a sophisticated acquisition may involve:

SPA + Disclosure Letter + Shareholders' Agreement + Escrow Agreement + Loan Agreement + Security Documents + Corporate Approvals + Regulatory Approvals

A dispute may therefore arise from any part of this transaction structure.

4. Major Categories of UAE M&A Disputes

5. Share Purchase Agreement as the Central Document

The SPA normally forms the contractual centre of an acquisition.

It may specify:

• parties;
• shares being sold;
• purchase price;
• payment mechanism;
• completion date;
• conditions precedent;
• warranties;
• indemnities;
• limitations of liability;
• disclosure;
• termination rights;
• material adverse change;
• confidentiality;
• non-compete obligations;
• governing law;
• dispute-resolution mechanism.

The DIFC decision in Abdulrahim Abdulla Jaffar Al Zarouni & Saif Abdulrahim Abdulla Jaffar Al Zarouni v Eastlift DMCC [2020] DIFC CFI 071 is a useful illustration. The SPA involved the sale of 90% of a company's shares for AED 9 million, conditions precedent, warranties, a liability cap, a material-adverse-change termination right and DIFC jurisdiction.

Principle

Courts will generally begin an M&A dispute by examining:

What exactly did the parties contract to do?

The precise wording of the SPA therefore becomes critical.

6. Case Law

Case 1 — Abdulrahim Abdulla Jaffar Al Zarouni & Saif Abdulrahim Abdulla Jaffar Al Zarouni v Eastlift DMCC [2020] DIFC CFI 071

This is one of the most useful UAE M&A authorities.

The dispute concerned an SPA under which the seller agreed to sell 90% of the shares in a company for AED 9 million.

The SPA contained:

• conditions precedent;
• completion provisions;
• seller warranties;
• buyer warranties;
• a liability cap;
• termination rights;
• material-adverse-change provisions;
• DIFC governing law and jurisdiction.

The case illustrates how an acquisition dispute may involve multiple contractual mechanisms rather than merely the question of whether shares were sold.

Principle

M&A litigation requires the court to interpret the transaction architecture as a whole, including:

• conditions precedent;
• warranties;
• completion;
• termination;
• liability limitations.

7. Case 2 — Ahmed Seddiq Mohamed Samea Almutawa v Mohamed Seddiq Mohamed Samea Al Mutawa [2023] DIFC CFI 095

This case concerned the sale of a 70% shareholding under an SPA for approximately AED 16.03 million.

The transaction involved:

• Deloitte valuation;
• negotiated SPA terms;
• deferred instalment payments;
• transfer of shares;
• corporate changes;
• obligations concerning company liabilities;
• an allegation of breach of the SPA.

The DIFC Court described the dispute as fundamentally concerning the enforceability and interpretation of the SPA.

Principle

A valuation incorporated into an M&A transaction can become important evidence concerning the agreed commercial basis of the purchase price.

The case also demonstrates the importance of separating:

contractual SPA obligations

from

additional allegations concerning the negotiation or valuation of the transaction.

8. Case 3 — Sandra Holding Ltd & Nuri Musaed Al Saleh v Fawzi Musaed Al Saleh & Others [2023] DIFC CA 003

This DIFC Court of Appeal case concerned transactions involving the sale of shares in subsidiaries and allegations relating to shareholder rights and fraud.

The dispute concerned the sale of shares in Seapuit Limited and Metinic Ventures Limited, wholly owned subsidiaries of UEL.

The respondents alleged breaches involving:

• shareholder agreements;
• Articles of Association;
• corporate governance;
• accounts;
• dividends;
• the sale transaction;
• alleged fraud.

The case demonstrates how an M&A transaction can generate post-transaction shareholder litigation, particularly where shareholders contend that the transaction affected their economic or governance rights.

Principle

An acquisition cannot always be analysed only as a bilateral seller-versus-buyer transaction.

It can generate claims involving:

• minority shareholders;
• directors;
• subsidiaries;
• shareholder agreements;
• corporate constitutional documents.

9. Case 4 — Shihab Khalil v Shuaa Capital PSC [2009] DIFC CFI 017

This is an important early DIFC corporate-acquisition authority.

Various shareholders entered into a Subscription and Share Purchase Agreement and Shareholders Agreement with Shuaa Capital.

The transaction resulted in Shuaa acquiring 20% of the issued share capital of Orion Holding Overseas Ltd and receiving management-control rights.

The dispute subsequently involved allegations concerning:

• contractual rights;
• management control;
• shareholder rights;
• fiduciary duties;
• corporate governance.

The case therefore illustrates how an M&A investment can generate litigation extending beyond the purchase price into control and fiduciary issues.

Principle

An acquisition agreement can create a network of rights concerning:

ownership + management + voting + board representation + fiduciary obligations.

10. Case 5 — SmartPaper Computer Software LLC v Keross LLC & Farouk Said, CFI 012/2010

This case involved a shareholder agreement designed to facilitate the sale of shareholder interests.

The agreement contemplated:

• sale of membership interests;
• transfer of assets and liabilities;
• creation of a new entity;
• consideration for the transaction;
• restructuring of corporate ownership.

The DIFC Court was therefore required to examine the contractual structure surrounding the proposed corporate transaction.

Principle

M&A transactions can involve asset transfers and corporate restructuring alongside share transfers.

Accordingly, a dispute cannot necessarily be resolved simply by asking who owned the shares. The court may need to determine:

• what assets were transferred;
• what liabilities were assumed;
• which entity acquired them;
• what consideration was promised.

11. Case 6 — Gulf Wings FZE v A and K Trading Limited [2022] DIFC CFI 004

This case is particularly useful for understanding share-transfer formalities.

The Court considered a transfer of shares in a JAFZA company and examined the relevant UAE-law requirements.

The Court held that the transfer was not complete merely because the parties had agreed to transfer the shares. Relevant formalities included:

• a written instrument of transfer;
• submission to the Registrar;
• payment of applicable fees;
• approval by the Registrar;
• appropriate corporate resolutions.

The Court concluded that because the required steps had not been completed, the registered shareholding remained as reflected in the register.

Principle

A fundamental M&A lesson is:

Contractual agreement to sell shares is not necessarily identical to legally completed share transfer.

This distinction is extremely important in acquisition disputes.

12. Case 7 — Deyaar Development PJSC v Taaleem PJSC & National Bonds Corporation PJSC [2015] DIFC CA 010

Although not a conventional modern SPA dispute, this case is valuable for understanding acquisition arrangements and pre-completion contractual obligations.

Deyaar paid a substantial premium as a deposit for the acquisition of Taaleem's interest in Sky Gardens.

The dispute concerned whether a legally binding transaction had been created and whether obligations concerning the underlying interest had transferred.

Principle

An M&A dispute may turn on whether negotiations, deposits, term sheets or preliminary arrangements have actually created a binding contract.

The court therefore examines:

• intention to create legal relations;
• contractual certainty;
• consideration;
• agreed terms;
• conduct of the parties.

13. Case 8 — Millie & Molly v Mihard, CFI 062/2021

This case involved a legal merger affecting a banking/business relationship.

The relevant transaction resulted in one entity assuming the assets, liabilities, rights and obligations of another entity.

The court examined precisely which entity's rights and obligations were transferred by the merger.

The court distinguished between the entity that merged and another subsidiary that was not itself the merging entity.

Principle

A merger does not automatically mean that every entity within the corporate group becomes the successor to every obligation.

The court must determine:

Which legal entity merged, what the merger legally transferred, and which rights and obligations survived or moved to the successor.

This is particularly important in post-merger litigation.

14. Case 9 — GTC Trading S.A. v Hazem Abdolshahid Mahmoudi Rashed & Others, CFI 046/2023

This more recent DIFC proceeding involved court-supervised sale of shares under an SPA.

The transaction concerned the sale of all issued shares of H.M.R. Investment Holding Limited.

The Court considered:

• the SPA;
• completion;
• sale consideration;
• escrow arrangements;
• court supervision;
• valuation;
• objections to the proposed sale.

The case illustrates the interaction between share sales and judicial enforcement/supervision.

Principle

Where an M&A transaction occurs in the context of enforcement proceedings, the court may examine whether the proposed sale mechanism and price are appropriate.

15. Case 10 — Ohene, Ocarina & Omeri v Ornet & Orrick [2026] DIFC CFI 111/2025

This is a particularly current illustration of an M&A dispute moving into arbitration and interim court proceedings.

The underlying dispute arose from an SPA dated 24 May 2024.

The claimants commenced LCIA arbitration under the SPA, while also seeking a worldwide freezing order from the DIFC Court.

The DIFC Court recognised its jurisdiction under the DIFC Arbitration Law to grant interim protective measures in support of arbitration.

Principle

M&A litigation does not necessarily mean a traditional court trial.

An SPA can create a dispute-resolution structure involving:

SPA → arbitration → DIFC Court interim relief

This is especially important in cross-border acquisitions where assets may be located in several jurisdictions.

16. Conditions Precedent

M&A agreements commonly provide that closing is conditional upon certain events.

Examples:

• regulatory approval;
• competition clearance;
• shareholder approval;
• financing;
• third-party consent;
• no material adverse change;
• restructuring;
• transfer of licences.

A dispute may arise where one party argues:

"The condition was not satisfied, so completion was not required."

The other party may argue:

"The condition was satisfied, waived, or was prevented by the other party."

The Eastlift case demonstrates the importance of carefully drafted conditions precedent and completion provisions.

17. Material Adverse Change

Large acquisitions sometimes contain a Material Adverse Change (MAC) clause.

A MAC clause can give a buyer a right to terminate where a sufficiently serious adverse event occurs before completion.

Examples could include:

• collapse of the target's major business;
• loss of a major licence;
• catastrophic regulatory action;
• major undisclosed liability;
• severe financial deterioration.

Because MAC provisions are highly contractual, the precise drafting becomes critical.

The Eastlift SPA expressly contained a material-adverse-change termination mechanism.

18. Representations and Warranties

A seller may warrant that:

• accounts are accurate;
• there are no undisclosed liabilities;
• contracts are valid;
• licences are valid;
• litigation has been disclosed;
• intellectual-property rights are owned;
• taxes have been paid;
• employees are properly recorded;
• financial statements fairly represent the business.

If a warranty is false, the buyer may seek:

• damages;
• contractual indemnification;
• price adjustment;
• specific contractual remedies;
• termination, where permitted.

19. Disclosure

Disclosure is fundamental to M&A litigation.

A seller may argue:

"The buyer was informed of the risk."

The buyer may respond:

"The disclosure was insufficient or did not fairly disclose the actual problem."

The litigation may therefore involve:

• disclosure letters;
• data rooms;
• due-diligence reports;
• emails;
• board minutes;
• financial statements;
• expert evidence.

20. Due Diligence and M&A Liability

Due diligence does not automatically eliminate seller liability.

A buyer may conduct extensive due diligence but still have contractual warranty rights.

The legal question can become:

What did the buyer know?

and:

What did the seller contractually promise?

This is particularly important when an SPA contains:

• knowledge qualifiers;
• materiality thresholds;
• disclosure qualifications;
• liability caps;
• limitation periods.

21. Purchase-Price Disputes

Purchase-price disputes are among the most common M&A disputes.

They can concern:

Locked-box transactions

The price is fixed by reference to a historical balance sheet.

Disputes may concern:

• leakage;
• permitted leakage;
• dividends;
• management fees;
• related-party payments.

Completion accounts

The final price depends upon:

• cash;
• debt;
• working capital;
• net assets.

Disputes may concern accounting methodology.

Earn-outs

Additional consideration becomes payable if specified future targets are achieved.

Disputes may concern:

• revenue;
• EBITDA;
• profit;
• customer retention;
• management conduct.

The Almutawa litigation demonstrates the importance of valuation and deferred consideration in share-sale disputes.

22. Fraud in M&A Transactions

Fraud can fundamentally change the character of an M&A dispute.

Examples include:

• falsified financial statements;
• hidden liabilities;
• undisclosed related-party transactions;
• fraudulent valuation;
• concealed litigation;
• forged corporate approvals;
• concealment of beneficial ownership.

The Sandra Holding litigation illustrates how allegations of fraud may become intertwined with the sale of corporate assets or subsidiaries and shareholder rights.

23. Minority Shareholder Disputes

An acquisition may adversely affect minority shareholders even where the buyer and seller have completed their transaction.

Possible issues include:

• dilution;
• non-payment of dividends;
• unfair related-party transactions;
• removal from management;
• asset transfers;
• sale of subsidiaries;
• failure to hold meetings;
• failure to provide accounts.

The Sandra Holding case is particularly useful because the dispute involved allegations concerning shareholder rights, corporate governance and transactions involving subsidiaries.

24. Beneficial Ownership

M&A disputes can also arise when:

registered ownership ≠ alleged beneficial ownership.

This is especially important where:

• nominees are used;
• trust-like arrangements exist;
• shareholders hold shares for another person;
• corporate structures span several jurisdictions.

The 2026 Dimension B+ Ltd v Saleh Abdelkarim Hussain Abdelrahman Almaazmi [2024] DIFC CFI 094 judgment is illustrative of disputes concerning a nominee arrangement and alleged beneficial ownership of shares in an onshore UAE LLC. The case involved a claim for transfer of the remaining 25% registered shareholding pursuant to a nominee agreement.

Principle

M&A litigation may require the court to distinguish:

legal title

from

contractual/beneficial claims concerning the shares.

25. Share-Transfer Formalities

One of the most important practical rules is:

Signing the SPA does not necessarily complete the corporate transfer.

Depending on the company and jurisdiction, completion may require:

• transfer instrument;
• notarisation;
• shareholder resolutions;
• board resolutions;
• regulatory approval;
• Registrar approval;
• amendment of constitutional documents;
• commercial-register changes;
• payment of government fees.

The Gulf Wings decision illustrates the importance of these formal requirements under the relevant JAFZA regime.

26. Merger vs Share Acquisition vs Asset Acquisition

These transactions have different legal consequences.

This distinction becomes critical in litigation.

For example, in Millie & Molly v Mihard, the Court examined the legal effect of a merger and distinguished the merging entity from another entity within the corporate structure.

27. Successor Liability

After a merger, the successor entity may assume specified rights and obligations.

But courts must examine the actual legal structure.

Questions include:

1. Which entity merged?
2. Which entity survived?
3. What assets transferred?
4. What liabilities transferred?
5. Did a subsidiary itself merge?
6. Did the transaction involve only a change of control?
7. Was an asset transfer separately documented?

The Millie & Molly decision demonstrates why corporate identity must be analysed carefully rather than assuming that every group entity automatically becomes liable for every predecessor obligation.

28. Post-Closing Disputes

M&A disputes frequently emerge after completion.

Typical post-closing claims include:

• warranty claims;
• indemnity claims;
• tax liabilities;
• employee claims;
• undisclosed litigation;
• environmental liabilities;
• regulatory fines;
• customer claims;
• IP ownership;
• fraud;
• earn-out disputes.

A well-drafted SPA therefore normally contains a detailed survival and claims procedure.

29. Liability Caps

An SPA may limit liability.

For example:

Seller's aggregate liability shall not exceed 10% of the purchase price.

But exceptions may apply for:

• fraud;
• wilful misconduct;
• fundamental warranties;
• title warranties;
• tax claims.

The Eastlift SPA is a useful illustration because it expressly contained an aggregate contractual liability cap.

30. Escrow Arrangements

Escrow can be used to protect against post-closing claims.

For example:

Purchase price = AED 100 million

• AED 90 million paid at closing;
• AED 10 million placed in escrow;
• escrow released after a specified period or after warranty claims are resolved.

The GTC Trading proceedings illustrate the use of an escrow structure in connection with a share sale and judicially supervised transaction.

31. Arbitration in UAE M&A Disputes

M&A agreements frequently contain arbitration clauses, especially international transactions.

Advantages can include:

• confidentiality;
• specialised tribunal;
• cross-border enforceability;
• procedural flexibility;
• ability to obtain interim measures from competent courts.

The 2026 Ohene/Ocarina/Omeri v Ornet/Orrick proceedings demonstrate the interaction between an SPA, LCIA arbitration and DIFC Court interim relief.

Thus:

Arbitration clause in SPA ≠ complete exclusion of court involvement.

Courts may still be relevant for:

• freezing orders;
• interim injunctions;
• evidence;
• enforcement;
• appointment-related issues;
• emergency protection.

32. Jurisdictional Problems

A cross-border M&A transaction can involve:

• UAE mainland;
• DIFC;
• ADGM;
• foreign courts;
• ICC arbitration;
• LCIA arbitration;
• institutional arbitration seated elsewhere.

The SPA's dispute-resolution clause should therefore be examined carefully.

Important questions include:

• What is the governing law?
• What is the seat of arbitration?
• Which courts have supervisory jurisdiction?
• Is the dispute arbitrable?
• Does the clause cover shareholder claims?
• Does it cover non-signatories?
• Where are the assets?
• Where must the judgment or award be enforced?

33. Litigation of M&A Disputes: Typical Process

A simplified structure is:

1. Transaction

↓

2. SPA / SHA / ancillary documents

↓

3. Closing

↓

4. Dispute arises

↓

5. Notice of breach/claim

↓

6. Negotiation or mediation

↓

7. Court or arbitration

↓

8. Expert/valuation evidence

↓

9. Judgment or arbitral award

↓

10. Enforcement

34. Important Evidence in M&A Litigation

A claimant or defendant may rely on:

• SPA;
• SHA;
• disclosure letter;
• due-diligence reports;
• financial statements;
• valuation reports;
• board minutes;
• shareholder resolutions;
• emails;
• data-room records;
• accounting records;
• regulatory approvals;
• corporate registers;
• expert reports;
• completion certificates;
• escrow documents.

Digital evidence is increasingly important in sophisticated acquisition disputes.

35. Remedies

Possible remedies include:

Damages

Compensation for proven contractual loss.

Specific performance

An order requiring completion of an agreed contractual obligation where legally available and appropriate.

Rescission or termination

Potentially available where the contractual/legal requirements are satisfied.

Declaratory relief

Court declaration concerning:

• ownership;
• contractual rights;
• validity of transaction;
• obligations.

Injunction/interim relief

Particularly important where there is a risk of:

• dissipation of assets;
• transfer of shares;
• destruction of evidence;
• completion of a competing transaction.

Enforcement

Judgment or arbitral award may ultimately need to be enforced against assets in the UAE or abroad.

36. M&A Litigation and Good Faith

UAE civil-law principles place significant importance on good-faith performance of contractual obligations.

In M&A transactions this may become relevant to:

• cooperation obligations;
• satisfaction of conditions precedent;
• disclosure;
• completion;
• earn-out calculations;
• exercise of termination rights.

However, good faith does not normally permit a court simply to rewrite an agreed commercial bargain.

The starting point remains the parties' contractual allocation of rights and risks.

37. Key Distinction: Failed Deal vs Completed Deal

Failed acquisition

The transaction never closes.

The dispute may concern:

• conditions precedent;
• termination;
• deposits;
• break fees;
• specific performance;
• damages.

Completed acquisition

The dispute arises after closing.

The dispute may concern:

• warranties;
• indemnities;
• hidden liabilities;
• purchase-price adjustment;
• fraud;
• earn-outs.

This distinction determines much of the litigation strategy.

38. Practical Example

Suppose Company A buys 80% of Company B for AED 200 million.

The SPA provides:

• AED 180 million at completion;
• AED 20 million escrow;
• seller warranties;
• tax indemnity;
• 24-month warranty period;
• arbitration clause.

Six months later, the buyer discovers AED 30 million in previously undisclosed tax liabilities.

The dispute could involve:

Issue 1: Was the tax liability disclosed?

Issue 2: Was the seller's warranty breached?

Issue 3: Does the tax indemnity cover the liability?

Issue 4: Does the liability cap apply?

Issue 5: Was the claim brought within the contractual period?

Issue 6: Can the buyer recover from escrow?

Issue 7: Is the dispute subject to arbitration?

This demonstrates why M&A litigation is usually a multi-document contractual dispute, rather than simply a dispute about ownership of shares.

39. Case-Law Revision Table

The authorities above are predominantly DIFC/UAE authorities. They are particularly useful for UAE M&A litigation research, but DIFC decisions should be distinguished from binding precedent applicable to a mainland UAE court.

40. Key Principles for UAE M&A Dispute Litigation

Principle 1

The SPA is normally the starting point.

Principle 2

Signing an SPA does not necessarily mean that share transfer has been legally completed.

Principle 3

Conditions precedent can determine whether completion is required.

Principle 4

Representations and warranties allocate transaction risk.

Principle 5

Disclosure can substantially affect warranty litigation.

Principle 6

Valuation evidence can become critical in purchase-price disputes.

Principle 7

A merger does not necessarily transfer every obligation of every group company.

Principle 8

Minority shareholders may generate separate post-acquisition disputes.

Principle 9

Fraud allegations can substantially affect contractual remedies and liability limitations.

Principle 10

Arbitration and court proceedings can coexist, particularly where interim protective measures are required.

41. Conclusion

UAE M&A dispute litigation is a combination of contract law, company law, civil liability, corporate governance and procedural law.

The most important analytical structure is:

Transaction Structure → SPA → Conditions Precedent → Completion → Warranties/Indemnities → Breach → Loss → Remedy

For mergers, an additional question is:

Which legal entity survived, and which rights and liabilities transferred?

For share acquisitions:

Was the contractual sale actually completed in accordance with the applicable corporate-registration formalities?

For post-closing disputes:

What risk did the SPA allocate to the buyer and what risk did it retain with the seller?

And for cross-border M&A:

Which governing law, court or arbitral tribunal has authority over the dispute?

The UAE authorities discussed above show that M&A litigation can involve much more than a disagreement over purchase price. Courts may have to determine contractual interpretation, share-transfer validity, valuation, corporate succession, shareholder rights, fraud, liability allocation, escrow, and interim relief. The distinction between mainland UAE law and DIFC/ADGM legal regimes must always be kept in view when applying these authorities.