|10 February, 2020

Most common cause of dispute among Dubai entrepreneurs revealed

About 600 of such complaints raised in 2019, latest official data show

Image used for illustrative purpose. Dubai Marina Skyline.

Image used for illustrative purpose. Dubai Marina Skyline.

Gettyimages

In an ideal world, two businesses sign a contract and deliver what has been agreed on. However, this is not often the case in the real world.

Breach of contract or business agreement is the most common cause of dispute among entrepreneurs in Dubai, new data showed. 

Out of the hundreds of commercial disputes raised before the Commercial Compliance and Consumer Protection (CCCP) department in the Dubai Economy last year, nearly 8 out of 10 stemmed from businesses’ failure to comply with their contracts.

“[About] 78 percent of the complaints received last year involved non-compliance with agreement / contract terms,” a spokesperson told Zawya.

A small portion, about 10 percent, alerted authorities about alleged commercial fraud, such as counterfeiting, while 4 percent involved non-adherence to declared business activity.

The good news, however, is that there is a declining trend of businesses involved in disputes. All in all, complaints related to commercial disputes in Dubai reached 770 in 2019, down by 54 percent from the 1,667 cases recorded in 2018.

According to the Dubai Economy, the incidence of disputes dropped because of its sustained campaign to reach out to traders and resolve complaints amicably.

“[The decline] indicates the success of our awareness campaigns rolled out on conventional as well as digital platforms,” said Mohammed Ali Rashed Lootah, CEO of CCCP.

The Dubai Economy deals with disputes from businesses against their partners, suppliers, dealers, agents or other businesses in Dubai. The complaints received range from non-compliance with agreements, price list and security requirements, as well as fraud and faulty products. 

Businesses in the services sector appeared to be the most prolific in filing complaints, accounting for 39 percent of the disputes, followed by companies in the food sector (16 percent) and decoration and buildings (12 percent).

Most popular complaints in 2018

In 2018, the majority of the issues raised by entrepreneurs were also related to non-compliance with the terms of the agreement, representing 79 percent of the complaints.

Some firms complained about fraud (5.1 percent), while others expressed dissatisfaction about after-sales service (2.1 percent) and non-compliance with specifications and standards (1.5 percent).

Businesses in the non-oil sector in Dubai, Abu Dhabi and the rest of the UAE are a major driver of the local economy, with their combined economic contribution reaching 70 percent of the gross domestic product (GDP).

(Reporting by Cleofe Maceda; Editing by Seban Scaria)

Cleofe.Maceda@refinitiv.com

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© ZAWYA 2020

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