Due to rising income and wealth, marriage and divorce have now started becoming a complex transaction. Pre-nuptial agreements have come to rescue for such complicated marital issues arising out of marriages either among Muslims or non-Muslims. Pre-nuptial agreement in general is a tool to legal and financial risk mitigation and regulate how division of the assets between future spouses should be divided in the event of divorce. Such pre-nuptial agreements include various issues, inter alia, spousal support, assets movable or immovable or the residence after the divorce or custody of children.
There are certain situations in which the parties to dispute may consider having a prenuptial agreement drafted: -
- The inheritance rights of children from previous marriage needs to be protected;
- Both or either one of the party has inherited the assets and are expecting the same;
- The parties want to protect their bank balance; and
- The husband and wife want to decide how the asset would be divided in case of divorce.
As reported in leading newspapers and articles, there has been a steady rise in divorce rate among parties in UAE, not only among expats but among GCC nationals and Emiratis. In fact, the Emirati nationals had divorce rate of 35% by 2015 as per one estimate which is observed to have increased by 2019.
In UAE, there courts with legal system that deals with such matters but the matters have been divided between Muslims and Non-Muslims when the court seize of such matter. In fact, UAE courts believe in the legal principle that wherever a person travels he/she carries with him/her their personal set of laws. Hence, the UAE courts provide a choice to an expatriate to enforce divorce law of the country of citizenship of the parties. For Muslims, the UAE Courts follow the Shari'a principles of law and pre-nuptial agreements are permitted only as long as they do not conflict with these laws. The UAE Federal Law Number 28 of 2005 regarding Personal Status (the Personal Status Law) creates a distinction between non-Muslims, Muslim expatriates and UAE nationals along with the validity of pre-nuptial agreements.
The non-Muslim pre-nuptial and post-nuptial agreements are generally permissible if the national laws of the contracting parties i.e. the country of nationality or of marriage provide for matrimonial division upon marriage dissolution or it allows enforceability of such agreements. Also, there is a distinction between assets movable or immovable that may be located in the UAE and abroad. With regards to the UAE assets, Article 1(2) of the Personal Status Law reads as:
"The provisions of this law shall apply to the citizens of the United Arab Emirates unless the non-Muslims of them are subject to special provisions applicable, its provisions shall also apply to foreigners as long as none of them insists on applying his law."
Further, Article 5 of Personal Status Law states that "The state courts shall be competent to try personal status actions initiated against citizens or foreigners having a domicile, residence or workplace in the state."
Hence, a bare reading of Article 1(2) in conjunction with Article 5 provide that the pre-nuptial and post-nuptial agreements amongst foreigners which complies with the parameters in Article 5 shall be enforceable in accordance with the governing law agreed in the pre-nuptial agreement. Also, for the UAE assets and the assets outside the UAE, the contract enforceability shall be subject to the law of the place where those properties are situated.
In case of the Muslim expatriates, it is crucial to make difference between expatriate Muslim who wish to enforce pre-nuptial agreement
- Divorce law within UAE
- Divorce finalized some other country outside UAE
For divorce procedure set in motion within the UAE, the Personal Status Law shall be applicable and the status of the pre-nuptial agreement shall be at par with that which would be applicable and enforceable for UAE nationals. But in the event the pre-nuptial agreement is enforced after the conclusion of divorce which is being finalized outside UAE, the agreement would be regarded as enforcement of a contract subject to UAE Federal Law Number 5 of 1985 regarding Civil Transactions Law.
When it comes to UAE nationals, Islamic Shari'a law does not recognize the validity of legal principle of matrimonial property and rather proclaims the autonomous financial status of the spouses. Therefore, every property gained or established by either of the spouses during the term of the marriage would and remains the sole property of that spouse with no rights of division or any right whatsoever.
Shari'a law as matter of fact and custom allows the contracting parties of nikah to enter into any sort of agreement that governs their rights and obligations unless they stand contradictory to the Holy Quran and fundamental principles of Shari'a law. It is also notable to point that this allowance of such contract is laid down in Article 20 of the Personal Status Law that permits written conditions to be elaborated and mentioned in the official marriage certificate without any limitation as to the scope of the conditions.
The Personal Status Law also has an explanatory memorandum under its Article 20 that explicitly mentions that contracts which are meant to codify best interests of the parties are valid but then that marriage contract does not differ in its treatment similar to that of a civil-nature contract. Therefore, under the law for UAE nationals, in the marriage certificate certain conditions can be included and is permissible under the law. But there is a divergence of opinion amongst Shari'a scholars with regard to the scope of conditions that could be included in the marriage certificate. Some favour wider conditions and some limit it but in all they stress on omnipresent factor being it should not contradict Shari'a Law.
An explanatory memorandum to the Personal Status Law mentions that the legislators have adopted the views of the Islamic scholars and hence encompass eclectic scope to strike the correct balance between public and private interests. Thus, such wide option would quarter the aspirations of changing society with Sharia' law and also protect parties from unnecessary harassment by other parties when divorce takes place thereby protecting the rights. Thus, pre-nuptial agreement provide transparency, flexibility, and saves time in divorce cases. It also helps to conclude divorces in an amicable manner rather than boisterous or in mud-slinging manner.
The case in point is Court of Cassation, Dubai Case Number 2 of 2010, in which wife sought to file divorce on the ground of cruelty and mental and physical harm and pleaded dissolution of marriage as it was irretrievable breakdown. She sought to impose a post-nuptial agreement executed with her husband as per the terms of which her husband promised her a residential property in her name in UAE. The Court on 28 September 2010 granted her the divorce, but held that it was not legal to enforce post-nuptial agreement as the conditions were not written down into the marriage certificate; and therefore article 20 of the Personal Status Law would not be applicable. Hence, the Court adopted the stance of interpreting such pledge by the husband as any ordinary contract would be governed by the Civil Transactions Law. But ultimately even that post-nuptial pledged was not upheld by the Court as the clause of the agreement did not satisfy the requirements of the Civil Transactions Law, i.e. offer and acceptance of a contract, were missing in the agreement.
Foregoing paragraphs have given us a brief idea of the status of pre-nuptial agreements in UAE among UAE nationals, Muslim expats and the non-Muslims. The main benefit of pre-nuptial agreement lies in the fact that the property enlisted in the official marriage contract, rather than annex agreement, is that the terms are understood to be agreed upon and accepted by the parties to the marriage. In the case of a post-nuptial agreement, one must take cognizance of the fact the terms have to be in line with the Civil Transactions Law in order to ensure all legal requirements are met.
In view of the above, it can be easily inferred that a pre-nuptial contract entered into (prospective) between spouses as per which matrimonial assets or alimony is dealt with or where one spouse undertakes to transfer certain assets to the other upon divorce are usually held valid by the personal status courts and made binding on the party which had taken the obligations to itself.
Besides, pre and post-nuptial agreements are significant when it deals with the properties which are located outside the UAE and in countries which enforce such agreement and with certain legal formalities fulfilled. Also, pre-nuptial agreements are risk mitigators in case any UAE national has wife who is a foreign national and would be in position to file a divorce proceeding for the assets located in UAE but the husband does not want foreign courts to decide on such UAE based property.
As a final note it is stressed that while drafting pre-nuptial agreement, to safeguard rights over matrimonial assets, it is important that legal advice should be sought so that in case of UAE nationals the scope of such conditions does not conflict Shari'a principles and in case of expatriates Muslim or Non-Muslims, there is no biasness to one party.
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.