Regulations on the legality and enforceability of Electronic Signatures: The Onshore United Arab Emirates & Dubai International Financial Centre

Which laws govern electronic signatures in the UAE?

A dynamic legal and regulatory system exists in the UAE, with frequent changes in interpretation and application. The UAE is a civil law jurisdiction, so there is no binding judicial precedent to rely upon, unlike common law jurisdictions. Additionally, there are occasions when the strict legal position diverges from “accepted” practices.

UAE

Electronic signatures in the UAE are governed by law No. (1) of 2006 On Electronic Commerce and Transactions (“UAE Electronic Transactions Law”). Other relevant laws include:

• The Minister of Economy issued Resolution No. 1 of 2008, which regulates Certification Service Providers (“CSP Resolution”).
• “Evidence Law” is the Federal Law No. 10 of 1992 concerning the Law of Evidence in Civil and Commercial Transactions (as amended by Federal Law No. 36 of 2006).

The electronic format of a contract does not make it invalid or unenforceable. Moreover, the Evidence Law states that electronic signatures, as defined under the Electronic Transactions Law, have the same evidential authority as handwritten signatures if they meet legal standards.

DIFC

As part of Dubai’s strategic vision to diversify its economic resources and attract capital and investment to the region, Dubai International Financial Centre was established following UAE Federal Decree No. 35 of 2004. It is stated in Article 3 of Federal Law 8 of 2004 that all Free Zones are subject to federal laws, except for Federal Civil and Commercial Laws.

The DIFC is an autonomous jurisdiction within the UAE and has formulated its legal and regulatory framework to cover civil and commercial issues. This included adopting the DIFC Law No. 2 of 2017, otherwise known as the DIFC Electronic Transactions Law. The law stipulates that any provision outlined in other DIFC legislation requiring signatures is satisfied if an Electronic Signature is used. It also states that information displayed in electronic form shall not be denied validity or enforceability.

Find out what qualifies as an electronic signature in the UAE-

Onshore UAE

An electronic signature is defined in UAE Electronic Transactions Law as “any letters, numbers, symbols, voice or processing system in electronic form applied to, combined into, or logically associated with an electronic message with the purpose of authenticating or approving it.”

“Secure electronic signatures” are defined as electronic signatures that can be verified through the application of a prescribed or commercially reasonable secure authentication procedure, to which the parties agree that the electronic signature was valid at the time it was produced:

• It is unique to the individual who uses it;
• Capability to identify such a person;
• At the time of signing, the creation data and means of creation were under the sole control of the signatory;
• Linked to the electronic agreement to which it connects in such a way that if the record were changed, the signature would be invalidated.

As long as it is not prohibited by law, parties may, in principle, agree to use either an electronic signature or a secure electronic signature under UAE Electronic Transactions Law.

DIFC

As defined in the DIFC Electronic Transactions Law, an electronic signature is a sound, symbol, or procedure linked to or logically associated with a document and implemented or adopted by the signer with the intent to sign that record. DIFC does not have a “secure electronic signature.” Further, certain transactions do not require electronic signatures.

Are electronic signatures prohibited for any transactions?

You cannot use electronic records or signatures for the following:

• Personal law transactions and issues such as marriage, divorce, and wills;
• Title deeds of real estate;
• Circulating bonds/negotiable instruments;
• Those transactions involving the sale and purchase of the real estate, its disposition, and rental for more than ten years, and the registration of any related rights;
• A special legal term excluding any other documents or transactions;
• Documents that a Notary Public must notarize by law.

Furthermore, certain government departments may require a wet ink signature. For example, the DIFC Electronic Transactions Law does not apply to:

• Creating, performing, or enforcing a power of attorney;
• Creating, performing, or enforcing a declaration of trust (apart from implied, constructive, and resulting trusts);
• Creating wills, codicils, or testamentary trusts;
• Under Rule 29 of the Dubai International Financial Centre Courts 2014, affidavits or affirmations may be created, executed, and used as evidence in court proceedings;
• The sale, purchase, lease (for a term of more than ten years), or other disposition of immovable property, and the registration of different rights relating to immovable property.

The DIFC Electronic Transactions Law excludes Negotiable Instruments from its list of excluded instances or transactions.

Is consent required for electronic signatures in the UAE?

Onshore UAE

There is no formal consent requirement for private parties to transact electronically. Still, affirmative behavior may be taken to indicate a person’s consent to use or accept information in an electronic format. Government entities must give explicit consent to transact electronically.

DIFC

No.

What factors led to the enforcement of digital signatures in the UAE?

Onshore UAE

An electronic signature is valid and enforceable to the extent that such reliance is reasonable. The party relying on an electronic or secure electronic signature assumes the risk that the signature was forged without proof to the contrary.

DIFC

An electronic signature can be considered valid if it is accepted as identifying the individual and implying their consent to the record’s contents. Depending on the context, an appropriate degree of trustworthiness may be necessary for the signature to achieve these goals. This trustworthiness can be established through an agreement or evidence proving its suitability.

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