As the pandemic continues to impact the economic and financial landscape of world economies, businesses in the UAE have also taken a hit. The net result has been a spike in legal disputes as companies grapple with fulfilling their contractual obligations.
Reasons Behind Spike In Trade Disputes In Dubai
The underlying factor behind the rise is being associated with tremendous difficulties in performing contractual obligations, which have become increasingly difficult, if not impossible.
The pandemic has increased the volume of disputes. At the same time, businesses continue to face instability, resulting in weak financial markets. Disruptions have also been caused by business operations’ slowdown as companies reel from the aftershocks of the Covid-19 outbreak.
Reports of payment default rates are surfacing, and investors and creditors contemplate different actions to ensure their funds are secured.
Impact Of Limited Government Organizations’ Operations During Pandemic
In the initial days of the pandemic, the UAE courts had limited their operations. In contrast, various government organizations had followed the same pattern. This had a massive impact on the activities of businesses. Such developments reflected in a considerable increase in the legal disputes in the UAE region.
Terms Of Payment Not Being Met
The rise in disputes is inevitable as companies proceed to review their cash flow situation. Business plans to continue operations are being reassessed with cash flow contracting. These factors have materialized in non-adherence to terms of payment.
How Are The Firms Reacting To Trade Disputes In Dubai?
Before the pandemic had wreaked its havoc, firms were willingly providing more extended periods for repayments. The debtors were left in a strong position. However, now these very firms have adopted a more assertive approach. Attempts to secure debt collection have increased, and this involves ensuring payments through the Dubai courts.
Another change that has been witnessed is that these firms are now on the look to renegotiate sale and purchase agreements. Such measures are often cited as being the result of property prices that have fallen to record lows. If these measures are unsuccessful, then other options are being viewed. These include filing the matter in courts or arbitration tribunal where damages can be claimed for delay or failure to deliver projects within the timeframe agreed.
How To Ensure Trade Dispute Resolution In Dubai
If your company is facing any issue related to trade dispute in Dubai and the matter has to be referred to the courts, then avail the assistance of a legal firm involved in trade dispute resolution in Dubai.
Many experienced and capable firms handle matters about trade dispute resolution in Dubai in the best interest of their clients.