UNITED ARAB EMIRATES Law and Practice Contributed by: Stuart Paterson, Janine Mallis and Tania Forichon, Herbert Smith Freehills
DIFC and ADGM In the DIFC and ADGM, common law principles of privilege apply, including privilege against self-incrimination. 6.2 Undermining the Privilege Over Communications Exempt From Discovery or Disclosure Under Federal Law No 34 of 2022 (the “UAE Advocacy Law” ), a lawyer is not permitted to reveal a secret confided to them or which comes to their knowledge through their profession, except if its revelation is to prevent the perpe - tration of a crime threatening human life or safety or damage to property or unless such disclosure is required by law (Article 45). Under the New Penal Code, lawyers may be criminally liable if they disclose confidential information obtained during the course of their services. Article 432 of the New Penal Code prohibits the disclosure of confidential informa - tion by any person who, by their profession, is entrusted with a secret. DIFC and ADGM Practice Direction No 2 of 2009 of the DIFC courts’ Code of Professional Conduct for Legal Practitioners provides that practitioners are required to keep information communicated to them by their client confidential unless such dis - closure is authorised by the client, ordered by the court or required by law. This duty extends to all partners and employees of a practitioner and continues even after the practitioner has ceased to act for the client. Similarly, lawyers have imposed a duty of confi - dentiality in the ADGM. Disclosure is only permit - ted if it is authorised by the client, ordered by the court, or otherwise required by law, as provided in the ADGM courts’ Rules of Conduct 2016.
In the DIFC and ADGM, the common law princi - ple that privilege may be lost if the communica - tion or document in question came into being to further a criminal or fraudulent design will apply. This principle, which is founded on public policy, is sometimes known as the “fraud exception” or the “iniquity principle.”
7. Special Rules and Laws 7.1 Rules for Claiming Punitive or Exemplary Damages Onshore UAE
The concepts of punitive damages and exem - plary damages are not recognised by UAE law. DIFC In the DIFC, courts may order punitive damages where the defendant’s conduct has been delib - erate and particularly egregious. Article 40(2) of DIFC Law No 7 of 2005 (the “DIFC Law of Damages and Remedies” ) provides that: “the Court may in its discretion on application of a claimant, and where warranted in the circum- stances, award damages to an aggrieved party in an amount no greater than three times the actual damages where it appears to the Court that the defendant’s conduct producing actual damages was deliberate and particularly egre - gious or offensive” . ADGM In the absence of any ADGM enactment or prec - edent on this point, the position on claiming punitive/exemplary damages in the ADGM is as set out in English common law. 7.2 Laws to Protect “Banking Secrecy” Onshore UAE Banking documents are confidential, and dis - closure without consent is likely to be unlawful.
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