The Types of Banking and Financial Disputes That Arise in the UAE
Banking and financial disputes in the UAE cover a wide range of situations: disagreements over loan terms, incorrect charges or deductions, unauthorised account transactions, wrongful account closures, disputes over investment products, insurance claim denials, and conflicts between businesses and their financing banks over facility terms or covenant breaches. The appropriate resolution pathway depends on the nature of the dispute, the parties involved, and whether the complaint is against a licensed financial institution, an insurance company, or another type of financial services provider.
The UAE’s financial services sector operates under a dual regulatory structure. The Central Bank of the UAE (CBUAE) regulates banks, exchange houses, payment service providers, and most financial institutions operating on the mainland. The Securities and Commodities Authority (SCA) regulates investment firms and capital market participants. Within the DIFC and ADGM, separate regulatory authorities apply. The dispute resolution pathway differs depending on which regulator covers the institution involved.
Step 1: Raise the Complaint Directly With the Institution
Every CBUAE-licensed financial institution is required to maintain a dedicated customer complaints function and to resolve complaints within defined timelines. The first step in any banking or financial dispute is to submit a formal written complaint to the institution’s complaints department, clearly describing the issue, the date it occurred, the amounts involved, and the resolution being sought.
The institution must acknowledge receipt of the complaint in writing and must provide a substantive response within 30 calendar days for retail complaints. The response must either offer a resolution or explain why the complaint has been declined. Where an offer is made, the complainant can accept it or reject it and escalate further.
Practical steps at this stage include keeping copies of all correspondence, noting the names of every person spoken to and the date and time of each interaction, and obtaining the institution’s unique complaint reference number. These records become the foundation of any subsequent escalation and are essential if the matter proceeds to a regulator or court.
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Step 2: Escalate to the CBUAE Consumer Protection Department
Where a complaint against a CBUAE-licensed institution is not resolved satisfactorily at the internal stage, it can be escalated to the CBUAE Consumer Protection Department (CPD). The CPD handles complaints from retail customers and small businesses against CBUAE-licensed financial institutions and reviews whether the institution has complied with the Consumer Protection Regulation and Standards issued by the CBUAE.
The CPD complaint is submitted through the CBUAE’s online platform or at the Central Bank’s branch offices. The complainant must typically provide evidence that the internal complaints process has been exhausted first, including the institution’s final response or confirmation that 30 days have elapsed without a satisfactory resolution.
Time limits apply. A complaint to the CPD should generally be filed within a defined period after the institution’s final response. Filing after the applicable time limit may result in the complaint being rejected on procedural grounds regardless of its merit.
Step 3: Alternative Dispute Resolution , Mediation and Arbitration
Where a dispute cannot be resolved through the regulator’s complaint mechanism, or where the parties prefer a non-court resolution, alternative dispute resolution options are available.
Mediation
Mediation involves both parties engaging an independent, impartial mediator who facilitates structured discussion between them with the aim of reaching a mutually agreed settlement. The mediator does not make a binding decision. Their role is to help each party understand the other’s position and to identify a settlement that both can accept. In the UAE, mediation is available through the courts’ mediation centres and through specialist financial dispute resolution services. Where a mediated settlement is reached, it is documented in a formal settlement agreement that is legally binding on both parties.
Arbitration
Arbitration is a binding alternative to court litigation. An arbitrator or arbitral panel hears evidence from both parties and issues an award that is binding and enforceable in UAE courts. Arbitration is commonly specified in financial contracts and facility agreements as the mandatory dispute resolution mechanism. Where an arbitration clause exists in the relevant contract, the parties are generally required to use arbitration rather than litigation. The UAE arbitration framework is governed by Federal Arbitration Law No. 6 of 2018.
Step 4: Court Proceedings and Expert Witnesses
Where alternative dispute resolution fails or is not applicable, banking and financial disputes in the UAE proceed to the Commercial Court. Financial disputes involving complex accounting calculations, banking product structures, loan amortisation schedules, investment valuations, or the quantification of financial losses frequently require expert evidence. The court may refer specific financial questions to a registered financial expert, or either party may appoint an expert witness to provide technical evidence in support of their position.
A banking and finance expert witness in UAE proceedings must be registered on the Ministry of Justice’s official expert roster under Federal Decree-Law No. 21 of 2022. The expert prepares a formal report in response to the specific questions referred by the court, presents their findings, and may be examined on their conclusions. The expert’s obligation is to the court, not to the party that engaged them. This independence is what gives expert evidence its weight in proceedings.
The types of financial questions that typically require expert witness evidence in banking disputes include: whether interest was correctly calculated on a loan or facility, whether the bank applied the correct exchange rates to a foreign currency transaction, whether investment advice was consistent with the client’s disclosed risk profile, whether account charges were properly authorised under the facility agreement, and the quantum of financial loss suffered by one party as a result of the other’s conduct.
Disputes Within the DIFC and ADGM
Disputes involving financial institutions regulated by the DIFC or ADGM follow separate pathways. The DIFC Courts have jurisdiction over financial disputes arising within the DIFC and operate under a common law framework in English. The ADGM Courts similarly apply English common law for disputes within Abu Dhabi Global Market. Both jurisdictions have their own financial services regulators (DFSA and FSRA respectively) with their own complaint and enforcement mechanisms. A dispute against a DIFC-regulated institution is not handled by the CBUAE’s Consumer Protection Department.
Frequently Asked Questions (FAQs)
What is the first step in resolving a banking dispute in the UAE?
Submit a formal written complaint to the bank or financial institution’s internal complaints department. The institution must acknowledge receipt and provide a substantive response within 30 calendar days. Document all correspondence, names, and reference numbers from this stage, as they are required for any subsequent escalation.
What is the CBUAE Consumer Protection Department?
The CBUAE Consumer Protection Department (CPD) is the regulatory body that handles unresolved complaints against CBUAE-licensed financial institutions after the internal complaints process has been exhausted. Complaints are submitted through the CBUAE’s online platform. Time limits apply, and evidence of the completed internal process is typically required.
What is the difference between mediation and arbitration in a financial dispute?
Mediation is a non-binding process where an impartial mediator helps both parties reach a voluntary settlement. The mediator cannot impose an outcome. Arbitration is binding: an arbitrator hears evidence from both parties and issues an award that both must comply with and that is enforceable in UAE courts. Arbitration is frequently specified as the mandatory dispute resolution mechanism in financial contracts.
When is an expert witness needed in a banking or financial dispute?
When the dispute involves technical financial questions , interest calculations, loan amortisation, investment valuations, exchange rate applications, or loss quantification , that fall outside the expertise of the court or the parties’ legal teams. The expert witness must be registered on the Ministry of Justice roster under Federal Decree-Law No. 21 of 2022 and prepares a formal report in response to questions referred by the court.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Farahat & Co. provides banking and finance expert witness services in UAE court and arbitration proceedings, preparing formal reports on financial calculations, loan and facility assessments, loss quantification, and related financial questions referred by UAE judicial authorities. Our registered experts support both claimant and respondent legal teams in banking and financial disputes across the UAE courts and arbitral forums.
Contact Farahat & Co. today to discuss your banking and financial dispute requirements.
