In last month's Law Update (Issue 229) we looked at the
steps being taken by the authorities to promote consumer awareness
in the United Arab Emirates. These included the establishment by
the Dubai Department of Economic Development of a consumer rights
website, www.consumerrights.ae,
and a proposal to create specialist consumer courts in Abu Dhabi,
Dubai and Ras Al Khaimah. In addition, we focussed on product
liability issues arising from defective products, being one of the
three areas of regulation covered by the UAE Consumer Protection
Law of 2006 (the "Law") and its implementing Regulations
of 2007 (the "Regulations").
In this article, we will give an overview of the second area of
regulation covered by the Law and the Regulations, trade practices
law.
Trade Practices Law
This area of law deals with a supplier's obligations in the
context of the sale of goods and services and covers issues such as
labeling requirements, warranties and after sales service
obligations. Trade practices issues are covered principally by
chapters four and five of the Law.
The main principles covered by these chapters and the Regulations
relate to:
- Display of sale prices of goods;
- Deceptive and misleading advertising of goods;
- Labelling of goods in Arabic and providing certain details in respect of the goods;
- Replacement of defective goods
- Imposition of liability for damages resulting from the use and consumption of goods;
- Availability of spare parts;
- Compliance with applicable UAE standards and health and safety requirements;
- Honouring advertised warranties;
- Warranting of services for a period of time commensurate with the nature of the service;
- Offering replacement goods where the fulfillment of the terms of any warranty is to exceed a certain period; and
- Requirements with regard to invoicing for repairs and minimum warranty obligations with respect to spare parts used in repairs.
It is clear that certain of the principles set out in the Law
and Regulations allow for a significant degree of subjectivity in
their interpretation. For example, what constitutes a suitable time
for providing spare parts when the Law requires that this must be
ascertained by reference to the "nature of the goods"? Or
what is a suitable warranty period for a particular service when
this, again, is to be determined by reference to the "nature
of the service". There is also the question of what exactly is
being warranted (presumably that the service will be carried out in
a reasonable manner and in accordance with what was promised)?
Enquiries can always be made of the Department of Consumer
Protection although responses that can be considered
"binding" may not be able to be given. In our view a
common sense approach needs to be taken and reference should be
made to established custom, to the extent available, when
interpreting these requirements in the context of any specific
situation.
In addition, there are no doubt many violations of the Law and
Regulations occurring in the United Arab Emirates, for example,
with regard to labelling requirements. It would not be possible for
the authorities to ensure 100% compliance with the Law and the
Regulations. This is one of the reasons why it is important to
raise awareness of consumer protection laws throughout the United
Arab Emirates, both by consumers, so that they can pursue their
rights against those breaching these laws, and suppliers and
producers so that they can ensure their compliance with these
laws.
Penalties
In addition to the costs of compensating consumers for
their losses and rectifying the defects, the Law and Regulations
also set out penalties for breaches.
A fine of not less than AED 10,000 will apply if a product does not
have a conspicuous warning of the risks associated with using it.
In all other cases the fine is not less than AED 1,000. In
addition, the court may direct that the product be confiscated or
destroyed along with the equipment and raw materials used in its
manufacture. The Law also contains a very broad power granted to
the Minister of Economy to suspend trading by any business that
does not comply with the Law for up to a week and to also refer the
issue of permanent closure of the business and disposal of any
goods which do not comply with the Law to the courts.
Conclusion
The Law and Regulations provide a fundamentally solid, if
somewhat broadly expressed, framework for consumer rights in the
United Arab Emirates and there are clear signs from the authorities
that they intend to educate consumers as to their rights whilst
also enforcing compliance by suppliers and local manufacturers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
