My Principal Terminated or Won't Renew Our Distribution Agreement

What counts as a commercial agency: the law defines it as the representation of a principal by an agent 'under a contract of agency, distribution, sale, offer or concession, or the provision of goods or services inside the State in exchange for a commission or profit' (Art. 1). A distribution agreement can fall within that definition, but the statute's protections follow registration: only persons registered in the Commercial Agencies Register at the Ministry of Economy and Tourism may practise commercial agency (Art. 3), the agency contract must be notarised (Art. 4), and the law provides that an agency not registered in the register is not valid.

Who can be registered: UAE nationals, UAE public legal persons, private companies wholly owned by UAE nationals, and public joint stock companies at least 51% owned by UAE nationals (Art. 2). A fully foreign-owned distributor therefore generally cannot hold a registration and relies on its contract; whether a free-zone company can be registered turns on the same ownership test. The Cabinet may exceptionally let a foreign principal sell directly without an agent, but only where no agent exists and the arrangement is new.

How to check the register: the Ministry keeps the register and issues extracts from it (Art. 18). Ask for a current extract rather than relying on an old certificate, and check the principal, the products or services and the territory it covers; the Ministry's online service was not reviewed for this page. If you are registered, Steps 2, 3 and 5 apply to you; if not, go to Step 4.

The five lawful grounds: under Art. 9, a registered agency ends on expiry without renewal, on a party's exercise of a contractual termination right, by mutual agreement, by a final court judgment, or as otherwise provided by law. The 1981 law's requirement of a 'material reason' is gone, so the question is usually less whether the principal could end the agency than whether it gave the notice the law requires and what it owes.

Notice: unless the parties agreed otherwise, the principal must give notice of one year or half the remaining term of the contract, whichever is shorter (Art. 10, headed 'controls on termination or non-renewal'). Because the rule gives way to agreement, the notice clause in your contract matters as much as the statute, and the two should be read together.

Showrooms, stores and service centres: where the contract required the agent to build display buildings, stores or maintenance facilities, its term is five years unless the parties agreed otherwise (Art. 6). If your agency pre-dates the 2022 law, check the transition rules in Step 5 before accepting that an expiry or a contractual termination has taken effect.

Art. 11 gives the agent a claim for compensation on expiry, non-renewal or termination where its legitimate activity contributed to the principal's success and it would lose future profit as a result. It covers an agency the principal simply lets lapse, not only one cut short.

The evidence that supports it: sales growth in the territory over the life of the agency, marketing and market-building spend, showrooms, service centres and after-sales commitments, staff hired for the brand, the customer base you built and the stock you still hold. Keep the principal's own praise, targets met and incentive awards; they speak directly to your contribution to its success.

Stock and assets: unless agreed otherwise, on expiry the old agent's assets devolve to the principal or the new agent at fair value where they relate to the agency, are agreed upon, are in the agent's possession at termination and are free of transfer restrictions (Art. 9(2)). Unpaid invoices are an ordinary commercial claim; see our page on a client who won't pay. The Commercial Agencies Law sets no limitation period for compensation, and whether the five-year period between merchants applies to an Art. 11 claim was not determined, so treat the claim as urgent.

Your contract's own terms: an unregistered arrangement gets none of the Art. 9–11 protections or the Committee route; it is an ordinary commercial contract. Its termination, notice, exclusivity, renewal, stock and non-compete clauses decide most outcomes, together with any governing-law, jurisdiction or arbitration clause. If the principal skipped a notice or cure step its own contract required, that is a claim in itself.

General civil and commercial law: between merchants, the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) applies the parties' agreement, then commercial custom, then the civil law, and claims about merchants' obligations to each other are generally barred five years after the obligation fell due (Art. 92). The Civil Transactions Law (Federal Decree-Law No. 25 of 2025) has applied since 1 June 2026 and is not retroactive to earlier facts and acts unless it provides otherwise (Art. 4(1)); our guide to the new Civil Transactions Law explains what changed.

Exclusivity and competition law: an exclusive territory can raise questions under the Competition Law (Federal Decree-Law No. 36 of 2023) and Cabinet Resolution No. 59 of 2026; how they treat exclusive distribution was not reviewed for this page. If you acted as an agent without registration, any administrative penalty is left to a Cabinet regulation (Art. 22) that was not reviewed either, so take advice before either side raises the point.

The committee question: for an agency registered with the Ministry, disputes between agent and principal go first to the Commercial Agencies Committee, and 'no action shall be admitted before courts in this regard before referral to the Committee' (Art. 24(1)). The Committee, governed by Cabinet Resolution No. 82 of 2023, is chaired by a judge with four members; it starts hearing a dispute within 22 working days of a complete application and must decide within 120 days. A Ministry fee is payable before the application is registered.

The courts: if the Committee does not decide in time, either party may go to court within 60 days after the time limit lapses. A Committee decision can be challenged within 60 days of its notification; after that it cannot be, and it has the force of a writ of execution (Art. 24(2)). The law does not name the court, so a lawyer confirms which court hears the case. An unregistered contract does not go to the Committee; Dubai has a pre-litigation amicable-settlement stage for some claims, and a lawyer confirms whether yours is one.

Arbitration: the law expressly preserves any agreement between agent and principal to arbitrate their disputes, with the arbitration held inside the UAE unless they agree otherwise (Art. 26(1)–(2)); commentary describing registered-agency disputes as non-arbitrable reflects the old law. If a party starts arbitration after a Committee decision, within the challenge period, the decision has no effect (Art. 26(3)).

Agencies registered under the 1981 law: the 2022 law governs them, with a transitional shield. For agency contracts in force when it was issued, the expiry and contractual-termination grounds in Art. 9(1)(a)–(b) do not apply until two years after the law came into force, or ten years for agencies registered to the same agent for more than ten years or where the agent's investment exceeds AED 100,000,000, assessed under the Minister's standards (Art. 30). Which test your agency meets, and what it means for your dates, is a question for a lawyer.

Before you serve notice: obtain a current register extract to confirm whether, and for what, the agent is registered; check the contract's term, termination and notice clauses against Arts. 9 and 10, the five-year rule in Art. 6 and the transition in Art. 30; assess the Art. 11 exposure; and check the arbitration clause alongside the Committee route (Arts. 24 and 26). Serve notice in the form the contract requires and keep proof of delivery.

Appointing a new distributor: the law does not say whether a new agent can be registered while a dispute is pending. It does say that, during a dispute, goods or services may be brought in from exclusive sources, with the principal liable to the old agent for any compensation awarded by final judgment, on terms the Ministry regulates (Art. 9(3)); that goods covered by a registered agency may not be imported for trade other than through the agent, and customs will not release them without the Ministry's or the agent's approval (Art. 20); and that the agent must apply to strike off within 60 days of the agency expiring without renewal (Art. 16).

Plan the handover: stock (the fair-value rule in Art. 9(2) applies unless agreed otherwise), customer contracts, warranty and after-sales service, and how and when to tell the market. A principal outside the UAE should also check which law and forum its contract names before acting, ideally with a lawyer experienced in cross-border distribution.

Keep performing and keep records. Continue to meet your obligations during any notice period, and preserve the agreement and every amendment, the register extract, sales and marketing records, correspondence about performance, and the termination notice itself — the principal's portals and shared systems may close once the dispute is clear.

Watch stock, receivables, customer contracts, staff and after-sales obligations. A registered agent can ask, through the Ministry, for customs to attach goods imported by others and hold them until the dispute is decided (Art. 20). Dubai's Department of Economy and Tourism also lists a service titled 'File a Commercial Agency Infringement Complaint'; what it covers was not confirmed for this page, and nor was whether a non-compete in a commercial agreement can be enforced after termination.

Bring to a first meeting the agreement and amendments, the register extract, the notice, sales figures for the life of the agency, a list of the investments you made for the brand and a short timeline. Then explore potentially suitable commercial-agency and litigation lawyers through LEXNOVA Legal Connect; every match is reviewed by a person, and the lawyer reviews your agreement and registration and advises on your options and their fees.