As anticipated in the previous editions, an Italian company that intends to enter the market of the UAE, but does not have a permanent establishment in the area, may consider two forms of indirect investment:
1) signing contracts of sale or supply;
2) signing agency, distribution and franchising contracts.
In general terms, the sale and purchase regulation in force in the UAE is very similar to the Italian one and is contained mainly in the UAE Civil Code Articles. 489 et seq., where it is defined as “the exchange of non-money property for money”.
Similarly to what is provided by the Italian Law, the contract of sale of goods in the UAE concerns the transfer of ownership of a good or the transfer of another right for the consideration of a determined or determinable price. It is a consensual contract, i.e. it is perfected through the agreement between the parties, and with real effects.
Article. 511 of the civil code states: “The ownership of the goods sold shall be transferred to the purchaser as soon as the sale is concluded”. The seller and the purchaser, respectively, have the obligation, on the one hand, to make the purchaser acquire possession of the good and to safeguard the purchaser from dispossession and vices of the good and, on the other hand, to pay the agreed price. Any possible expenses related to the sale are generally charged to the purchaser.
Some differences are found, however, with regard to limitation periods and expiry of guarantee. In cases where the delivered goods differ from those ordered or have faults or defects, a complaint must be made within 15 days from delivery or, in the case of hidden defects, immediately after the discovery, without any precise chronological reference being indicated by law.
It should also be noted that the United Arab Emirates are not signatories of the Vienna Convention on Contracts for the International Sale of Goods – “CISG” which entered into force on 1 January 1988, governing contracts for the sale of goods signed by parties that reside in different States. Consequently, the Vienna Convention may be applied only in cases in which the law applying to the contract is the Italian one and the parties have not previously ruled out the applicability of the Convention “tout court“.
(Bologna Office – Linda Tontodonati – 0039(0)51 2750020)
