Shareholder disputes

Typical shareholder disputes in UAE companies

• the managing partner moves company money to personal accounts or related companies;
• the other shareholder is locked out of the bank, the books and the documents;
• a stake is held by a nominee or by a partner "on trust", who now refuses to hand it back;
• the manager, the Memorandum of Association or company assets are changed or sold without your consent;
• the partners cannot agree on one of them exiting or on valuing the stake;
• no dividends are paid and profits disappear into "expenses".

Shareholder disputes in the UAE are especially hard for foreign investors: the documents are in Arabic, the bank only speaks to the signatory, and the partner sits next to the assets. Speed and the right sequence of steps matter.

The legal framework

Shareholder relations in mainland companies are governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies and by the company's Memorandum of Association. Free zone companies follow their free zone's own rules; DIFC and ADGM companies are subject to the laws and courts of those financial centres.

The law requires managers to act in the company's interests and makes them liable for losses caused by breaching the law or the constitution. Specific protections — rights to information, how meetings are called, exit terms — depend heavily on the Memorandum and on any shareholders' agreement (SHA). That is where our analysis starts.

Tools to protect your stake and recover assets

1. Securing the evidence. Register extracts, the Memorandum, bank data, correspondence — gathered while you still have access.
2. Interim measures. Where money or assets may be moved, we ask the court to attach accounts, property or shares.
3. Audit and expert evidence. In financial disputes the UAE courts often appoint an accounting expert to trace the company's funds. The expert's report frequently becomes the key evidence.
4. A claim against the manager or shareholder for damages and return of the diverted funds and, in some circumstances, removal of the manager.
5. A criminal complaint. Misappropriating someone else's money may amount to breach of trust. It is a powerful lever but not always the right one — we decide on it with you and the advocate.
6. Exit negotiations. A buy-out, a split of the business or a settlement is often the fastest route.

If the Memorandum or SHA contains an arbitration clause, the dispute goes to arbitration — see DIAC arbitration. In the onshore courts we work alongside a licensed UAE advocate with rights of audience, while preparing the strategy and documents ourselves — see litigation in the UAE.

Preventing the next conflict

Most of the conflicts we handle began with no shareholders' agreement and a Memorandum without controls: dual bank signatories, spending limits for the manager, an exit mechanism. If you are about to go into business with a partner, start with partner vetting and put the rules in writing. For existing companies, this is part of our corporate legal support.

Timing and fees

Timing depends on the route: negotiations and a settlement can take weeks, while a court case with expert evidence and appeals takes considerably longer. We give a realistic staged plan after a 1–2 day diagnosis. Fees: a fixed project fee from AED 5,000, or a success fee of 10–25% of the amount recovered plus a fixed element. Court fees, expert costs and translations are extra and listed in the estimate. We work remotely and report weekly.