Proposed changes to the Personal Status Law may affect the application of inheritance rights of foreigners in relation to UAE estates.

In brief:

• Dr. Hadef Al Dhahiri, UAE Minister of Justice, announced that the Federal National Council is presently reviewing recommendations from the Ministry of Justice on refinements to the Personal Status Law.
• The proposed amendments are expected to address issues such as inheritance rights of foreigners who leave behind property in the UAE; domestic violence; child custody; and abandonment of senior citizens in hospital.

The growth of the UAE expatriate population, coupled with the introduction of the freehold property regime particularly in Dubai, means that increasing numbers of foreigners have bought immovable property in designated “freehold zones”. Coupled with their personal estates, many expatriates have considerable net worth in the UAE.

What happens to the expatriate’s estate on his death depends on three factors:

• is the expatriate a Muslim?
• what is the succession regime of the expatriate’s jurisdiction of nationality/domicile?
• has the expatriate made a Will?

All Muslims are subject to the Sharia and the principles of the Sharia have been codified into the law of the UAE. Federal Law No. 5 of 1985 (the Civil Code) and Federal Law No. 28 of 2005 (the Personal Status Law) codify matters of inheritance in the UAE.

So far as Islamic law, the Civil Code and the Personal Status Law are concerned in the UAE, as all Muslims are subject to the Sharia, it makes no difference whether the Muslim is an Emirati or an expatriate. If there is any aspect not covered by civil law or if any question of interpretation arises, then the Sharia should be applied.
 
In the UAE if a will is made locally, then some advisors recommend that it be attested in the Embassy of the testator's nationality. This may not be necessary, however, upon death, the relevant grant of probate (or equivalent according to the nationality) must go through the appropriate legalisation process, before being submitted to the court locally for adjudication. However many advisors feel that it is unnecessary to make a will in the UAE provided that a will, which addresses assets abroad without geographic limitation, has been made in the country of the testator’s nationality. This is because the UAE courts are likely to recognise the foreign will provided the court is satisfied that it is valid in the relevant jurisdiction, pursuant to Article 17 of the Civil Code, and provided it is proved that it was made in accordance with the expatriate’s jurisdiction of nationality. In this way the wishes of the deceased will be followed even if they do not follow the requirements under the Sharia.

But a question mark hangs over the ownership by an expatriate of immovable property in the UAE. While Article 17 of the Civil Code allows assets to pass under the expatriate’s will, Article 18 requires that the disposal of immovable property must follow UAE law. Further, Article 17.1 of the Civil Transactions Law clearly states that the law of the country of the nationality of the testator on his death will be applied to his estate. Therefore, the estate of a non-Muslim who is not a UAE national who dies in the UAE will be subject to the law of the country of his nationality, unless all the beneficiaries agree to apply Islamic Sharia, in which case the court will apply the latter.

In this regard, it should be noted that laws applicable to inheritance make no specific exemption for immovable property and therefore the potential conflict remains.    

Dr. Hadef Al Dhahiri, the UAE Minister of Justice, announced to the Federal National Council on January 6, 2010, that a panel had been set up to study remarks gathered from UAE judges on the law and its application over the past four years. “The panel is of the view that certain provisions need to be changed” said Dr. Hadef.

For an overview of inheritance considerations in the UAE, see Hadef & Partners’ series of articles on Islam, nationality and inheritance.

Contact: Tarik El Bakri
t.bakri@hadefpartners.com

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