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Indirect Lawsuit

The legislator has approved the use of an indirect litigation by the creditor to prevent the general guarantee of his right from being compromised or diminished as a result of the debtor’s refusal to exercise and assert that right. In order to safeguard the creditor from the debtor’s default, the indirect lawsuit gives the creditor the ability to assume the debtor’s rights and make claims on the latter’s behalf.

The validity of filing the indirect lawsuit

In this connection, the two Articles 392 & 393 of the Federal Civil Procedures No. (5) for the year 1985 and amendments thereto concerning the indirect lawsuit, prescribed that there are conditions that must be satisfied by each of the debtor and creditor for the validity of filing the indirect lawsuit as stated below:

1) Concerning the debtor

the default of debtor in using his right should be proved, and such default is likely to lead to the debtor’s bankruptcy or may increase the gravity of his bankruptcy. Besides, the claimed right must be irrelevant to the debtor per se or cannot be placed under attachment. For example, among the right related to the debtor in person, his right in accepting or reject the donation, and his right in divorcing his wife. And among the rights that cannot be placed under attachment are those that are deemed beyond the general guarantee given to creditors, which do not constitute one of the guarantee elements, such as the right to expense, housing and exploitation; as such laws cannot be, in principle, sold by creditors for satisfying their rights out of them. Finally, the legislator has stipulated that the debtor should be introduced as a defendant opponent in the lawsuit.

2) Concerning the creditor

he should have an existing right. If he had a potential right, such as the inheritor’s right before the death of his legato, or if his right was not free from dispute, then the creditor’s right is deemed unrealized yet. Subsequently he cannot use the rights of his debtor unless his potential right becomes realized, or his disputed right becomes free from dispute. However, it is not necessary for filing the indirect lawsuit that the creditor’s right should be matured; but, his right might depend on a rescindable clause. In this respect, it makes no difference if his debt was normal, mortgaged or has a preference right. Likewise, it makes no difference between a creditor whose right is represented in cash money, and another creditor whose right is represented in kind and a third creditor whose right is represented in a work.

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Rights in an indirect lawsuit

In this context, the creditor may use any right due to the debtor without any difference between any right and any other right. For, the right might be personal and its subject is represented in cash money, in kind, work or abstention from work. Regarding that most of the debtor’s rights that are used by the creditor is the personal right which subject is represented in cash money, as this right is the easiest use of right. Furthermore, the debtor’s right may represent an in-kind right that is used by the creditor in his name in matters, such as the right to a title-deed of property, usufruct right, easement right or mortgage right.

One of the most consequences of the indirect lawsuit in respect of the debtor, is that the creditor can legally actor on the debtor’s behalf in using his rights. In a sense, the reconciliation in the claimed right is confined exclusively to the debtor. Thus, the debtor has the right of disposing of this claimed right by selling or bartering it. In this case, the creditor may file a police lawsuit.

As for the opponent against whom the lawsuit was filed in addition to the debtor; he may use all possible pleadings against the debtor per se. Like for example, the pleading calling for the lawsuit prescription that is ascribed to the expiry of the prescribed period, or the invalidity of the action taken for any reason whatsoever.With respect to the creditor; he may provoke all defenses and may submit all demands that can be provoked and presented by the plaintiff.

Finally, it should be pointed out that the indirect lawsuit does not grant the creditor any preference right over the other creditors of the debtor. For, any benefit may result from the use of this right shall be added to the debtor’s assets as guarantee to all his debtors.

FAQ about indirect lawsuits in the UAE

1-How civil cases are handled in UAE?

The UAE’s court system encourages mediation before bringing a case, whether it be a civil, labour, or personal status, through committees such the commercial disputes resolution committees. Committees for settlement and reconciliation, and committees for family counselling.

2-How can I sue someone in UAE?

HOW TO FILE A CIVIL ACTION IN THE UNITED ARAB EMIRATES

  • CONSULT A ATTORNEY.
  • DESCRIBE THE JURISDICTION OF THE COURT.
  • THE METHOD OF MEDIATION.
  • SUING IN THE UNITED ARAB EMIRATES.
  • FEE AND OTHER CHARGES MUST BE PAID.
  • Ask OUT FOR A CASE NUMBER AND HEARING DATE.
  • A CASE VALUE ESTIMATION.
  • COMPLEMENTING CIVIL ACTION.

3-How much does it cost to file a civil case in UAE?

If the claim’s value is between AED 500 and AED 40,000, a fee equal to 6% of that amount must be collected. A charge of AED (12.001) must be paid in the event that an application is unvalued.

Khairallah Advocates & Legal Consultants—Our law firm in the UAE pursues UAE law to be the leader in its field, providing legal services to various fields.