“Without Prejudice” Communications in Onshore UAE: is it changing?
Written By
Partner
UK
I am a partner and co-head of our International Dispute Resolution Group, as well as the London team. I specialise in complex disputes, often of a cross border nature, and have particular expertise in the aviation & defence sector, commercial life science, and in matters involving fraud.
Associate
United Arab Emirates
I am a Disputes Resolution associate based in our Dubai office. I advise on dispute management and resolution strategies across sectors and through the full life cycle of a dispute.
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The legal concept of “without prejudice” is not recognised by UAE law. In practice, this has meant that “without prejudice” correspondence generated in the course of settlement efforts has, after unsuccessful settlement efforts, been submitted and reviewed by courts in onshore UAE.
In October 2024 however, the Dubai Court of Cassation upheld a decision of the Dubai Court of Appeal that statements made during settlement negotiations were inadmissible as evidence.
BACKGROUND
The dispute arose from a cryptocurrency transfer. The parties had agreed that the defendant would purchase on behalf of, and transfer to, the plaintiff a specific amount of digital currency in exchange for a cash payment. The amount transferred in cryptocurrency was less than the amount paid in cash to the defendant. The plaintiff filed a commercial claim with the Dubai Court of First Instance to recover the amount wrongfully held by the defendant.
Although the Court found in favour of the plaintiff, the plaintiff appealed the judgment arguing, amongst other things, that the defendant had in fact admitted to owing a significantly larger amount. This admission was recorded in WhatsApp communications between the parties while settlement efforts were afoot.
TREATMENT BY THE COURT OF APPEAL AND COURT OF CASSATION
The Court of Appeal rejected the appeal on the basis that “without prejudice” statements cannot be considered as evidence against the maker of the statement in local courts. While the Court did not cite any provisions of UAE law in its support, the judgment appeared to suggest that, as general practice, statements made during settlement efforts would not be taken as evidence by the courts.
Upon further appeal, the Court of Cassation found that the Court of Appeal had acted within the bounds of its discretionary authority and that there was no legitimate basis for the appeal.
ANALYSIS
The decision by the Court of Appeal is a welcome development. Importantly however, given that the UAE does not follow a system of binding judicial precedent, this judgment alone does not augur a change in onshore UAE (or even Dubai) courts’ treatment of “without prejudice” communications. While this decision may be cited as persuasive authority in future cases where this question may come up, ultimately, as the Court of Cassation pointed out, the treatment of such communications will be left to the discretionary authority of the courts.
For the time being therefore, it remains advisable to continue to remain wary of relying on “without prejudice” privilege before courts in onshore UAE.
