UAE issues 6-month moratorium on healthcare claims

The UAE government, at both the federal and local level, has recently issued a decision to stay all actions involving specific healthcare entities for a period of 6 months, in response to the COVID-19 pandemic.

Overview

Since the outbreak of the COVID-19 pandemic, we have witnessed extraordinary measures by governments around the world to support the continuity of business and services in different sectors. These measures have been specifically important in the healthcare sector, considering its role in combating the impact of COVID-19.

The UAE government has always been at the front-line when it comes to implementing laws and regulations to encourage the growth and sustainability of healthcare businesses in the UAE. 

To mitigate the effects of the ongoing pandemic on the healthcare sector and in recognition of the sectors' efforts since the outbreak, the UAE has introduced new legislation which is intended to give temporary reprieve to healthcare entities during these challenging times.

Cabinet Resolution

On 31 May 2020, the UAE Cabinet of Ministers introduced Cabinet Resolution No. 21M/8F (the Cabinet Resolution).

It provides that all claims filed against "companies and establishments", who are supporting the fight against COVID-19 in the UAE's healthcare sector, shall be stayed for a period of six months.

The stay applies broadly to:

• All claims, applications, complaints, appeals and executions against such entities (even cases which have been reserved for judgement); and
• Any attachments against any of such entities including ones imposed on movable assets, real estate, bank accounts, cars, shares, bonds and trade licences etc.

(collectively, the Measures)

Judicial Council

Specifically, the Cabinet Resolution instructed local Judicial Councils to implement the moratorium across the Emirates.

This triggered Resolution No. 17 of 2020, namely "Claims Filed Against Companies and Establishments Working in Health Sector in the Emirate of Dubai", as issued by the Dubai Judicial Council on 1 September 2020 (the Dubai Resolution).

The Dubai Resolution provides:

• That the Measures shall take effect for six months, starting from 1 September 2020.
• A list, issued by the Dubai Health Authority, of over 60 different healthcare entities to whom the Measures apply.
• That any attachments levied on any of the mentioned entities, since 1 January 2020, shall be either cancelled or suspended.

Practical implications

The wording in both the Cabinet Resolution and Dubai Resolution is very broad, meaning the 6-month stay potentially applies to all actions involving any of the concerned entities.

In fact, the UAE Courts have already stayed several cases based on the above, particularly medical malpractice claims brought some of the named entities.

We consider the Dubai Resolution would only apply to the 'onshore' Dubai Courts, and not the financial free zone DIFC Courts, which do not form part of the Judicial Council. That said, we understand this question is currently being considered in the DIFC Courts, the outcome of which is awaited.

On the whole, these legislative changes provide further evidence of the UAE government’s commitment and support to the healthcare sector in response to the global pandemic, and we consider it is a positive development aimed at ensuring continuity for the sector in a period of uncertainty.