The agent argued that he was the commercial agent of the client under an agreement of 24.01.1969, which had been confirmed by an agreement of 10.2.1983, according to which the representative of the exclusive commercial agent for the client in the Emirate of Abu Dhabi had become. The agency agreement had also been registered with the Ministry of Economy. The officer submitted that his agency had been renewed annually until it was terminated following a letter from the client in 2008. The agent then initiated legal proceedings against the client. The client informed the agent of his intention not to be reappointed until December 31, 2008 and therefore considered that the agreement had expired. Subsequently, the rector asked the Ministry of Economy to cancel the agency`s registration. However, the department objected without giving reasons, which led the client to file the counter-action against both the officer and the department. The rector asked the court to recognize that the agreement expired on December 31, 2008 and to denounce the ministry, to cancel the registration. In February 2008, the rector sent a letter to the officer saying that he did not want to continue the relationship. The notification was sent 10 months before the end of the year. An amendment to the 2006 Act 1981 (Law 13 of 2006) provides that “a fixed-term commercial agency expires at its close, unless its parties agree to renew it within one year of the expiry date.” Trade agency activities in the United Arab Emirates can only be carried out by UAE nationals or companies wholly owned by UAE nationals. Once the Agency is granted and registered with the UAE Ministry of Economy, terminating an agency relationship by a client can be extremely difficult and, in most cases, these layoffs result in significant compensation bonuses for the local agent.
The client introduced a counter-action in which he argued that the agreement between the two parties was a temporary agreement that was to expire on 31 December of each year and be renewed each year, provided that neither party lets the other party assert its intention not to extend the SS four months before the expiry of the expiry date. The Trial Court referred the cases to a panel of experts. The new panel (such as the previous body) concluded that the original agent was in breach of the agreements and had caused considerable damage to the contractors. The three experts indicated that the offences had been brought to the attention of the original officer without success. As a result, they were not entitled to compensation. The Trial Court dismissed all three appeals and the original agent appealed to the Court of Appeal. The Court of Appeal upheld the court`s decision. The original officer went back to the Supreme Court and the Supreme Court dismissed his appeal. Distribution agreements under Federal Act 5 of 1985 are governed by the principle of contractual freedom. Therefore, there are no legal restrictions on the legal and jurisdictional decision of the parties as to their distribution relationship. However, with respect to trade agency agreements concluded pursuant to LAE Federal Law No. 18 of 1981, the parties are required to apply their contractual relationships to the jurisdiction of the United Arab Emirates Federal Courts, which will apply the federal law of the UAE.
Distribution agreements can be entered into explicitly or tacitly, i.e. agency agreements, written or not, always have the exclusive right to sell to representative 3. The registration of the commercial agency or the renewal of such a registration expires without the permission of the parties to renew that registration one year before the expiry date. As a general rule, the client and the agent agree, under distribution agreements, that the representative will market the products in good faith and at his own expense, in accordance with the distribution agreement.