With a dull thud, Marissa slithered slowly down onto the rug of the hospital’s waiting room, the words of the surgeon reverberating like a gong in her head. “We are terribly sorry, but there was nothing more we could do for your husband…”
Nothing more, nothing more, the words echoed, but tragically, for Marissa and her young daughters, more bad news was to come. Unfortunately, as her husband had died intestate, without a will, their villa in the Springs would be subject to Sharia law, even though neither of them are of the Muslim faith. Her husband’s bank accounts and other personal assets will be frozen until all debts have been cleared and relevant matters adjudicated by the local courts, leaving her in a tumultuous state during a difficult time of grief.
CERTAINTY THROUGH INNOVATIVE LEGAL DEVELOPMENTS
Now, with a groundbreaking decision by H.H. Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, president of the DIFC, non-Muslims can have certainty in inheritance matters and succession planning for their businesses and estates.
On August 7 2014, his highness issued Resolution No 4 of 2014, which approved the establishment of the DIFC Wills and Probate Registry (WPR) for non-Muslims, including both residents and non-resident investors with assets in Dubai.
The WPR will be a separate entity from the DIFC Courts, which will be responsible for processing probate claims which establish the validity of the will.
In line with 2015 being the UAE’s Year of Innovation, this initiative will be the first of its kind in the MENA region where testators (those making the will) can register wills in English and according to common-law principles based on legislation from the UK, Malaysia, and Singapore.
After a month-long consultation with the public submitting their comments and suggestions, the DIFC’s Dispute Resolution Authority (DRA) has finalised the WPR Rules, and the registry will be launched on April 30 2015.
The head of the DRA and chief justice, Michael Hwang, explains that “[t]he new regime aims to enhance confidence and certainty, while complementing existing UAE laws on inheritance for non-Muslims.”
The rules reflect Article 1(2) of the UAE Personal Status Law which enables non-Muslims to opt out of Sharia law and have the laws of their own country apply to the distribution of their estate instead.
WPR Rules describe the processes for will registration in addition to the distribution of assets.
As orders from the DIFC Courts are enforceable in Dubai, government entities such as the Land Department and DED will cooperate and comply with DIFC Court orders and transfer assets to the beneficiaries.
FORM AND REQUIREMENTS OF THE WILL
Although there is no set template or form that the will should take, the WPR Rules provide a minimum set of requirements such as:
• a declaration that the testator, who has to be over the age of 21, is not Muslim;
• the real and personal assets being located in Dubai since the WPR does not apply to assets in other emirates;
• cancellation of previous wills related to Dubai assets;
• appointment of the executor and trustee of the estate;
• appointment of guardian of any children; and
• the will being signed in the presence of a witness and a registry officer.
The assets can be described in a general manner without exact listing of each specific asset, preventing the need to constantly update the will in the event of a sale or purchase of assets.
As the WPR does not provide legal advice, it is recommended that testators hire lawyers to ensure a properly drafted will to help prevent challenges to its validity. The WPR will also store the electronic will confidentially and securely for the testator’s lifetime to reduce likelihood of tampering and loss.
The DRA is committed to regularly evaluating these WPR rules against global benchmarks with the goal of constantly improving Dubai’s legal standards.
Chief justice Hwang believes that “the DIFC Wills and Probate Registry will enhance Dubai’s attractiveness as a destination for investment and support greater economic growth and capital inflows.”
That a strong legal system invites capital investment by providing independent judiciary as well as equal, predictable and non-arbitrary application of law was reiterated by Loretta Preska, chief justice of the US District Court Southern District of New York.
Preska spoke at DIFC on March 22 about the important role a legal system plays in commercial affairs after signing a Memorandum of Guidance with chief justice Hwang. This memorandum formalises the mutual enforcement of DIFC Court judgements in New York and vice versa, improving trade flow between our two nations.
It is precisely these types of partnerships and initiatives that will continue to propel Dubai forward as a safe haven for investment and the business destination of choice.
Jeanette Teh is assistant professor in the School of Business Administration at the Canadian University Dubai (CUD) where she teaches business and employment law, business ethics, and management. A non-practicing lawyer from Toronto, she also conducts corporate training sessions, including courses on legal drafting. Any views expressed in this article are solely those of the author’s and not of the university.