Skip to content Skip to Search
Skip navigation

Sharp rise in family disputes, says Emirati lawyer

  • Conflicts arise from generational shift
  • Insistence on family control regardless of qualification
  • UAE and Saudi introduced legal changes to support family firms 

The UAE has seen a marked increase in disputes within family-run businesses which is likely to continue, according to a leading Emirati lawyer.

Habib Al Mulla has been practising in the UAE for four decades and had until five years ago only seen one dispute case involving family members and shareholders of a company.

However, Al Mulla, who has drafted and advised on Federal and Emirate-level laws, has encountered 12 cases recently.

“We are talking about large conglomerates,” Al Mulla said. “We’re not talking about small entities, we’re talking about billions of dirhams.”

A report published by KPMG last October noted that the top 10 family businesses in the region, as ranked by assets, employ 600,000 people and have a net worth of more than $31 billion (AED114 billion).

The report also revealed that 38 percent of these businesses are still chaired by the first generation, while 47 percent are run by the second generation and just 15 percent are managed by the third generation or later. 

A survey conducted among high net worth individuals (HNWIs) in the Middle East in June last year by Swiss private wealth management bank Lombard Odier found that, out of 300 established HNWIs, only 24 percent have already put a full estate plan in place for their private assets.

Al Mulla said the conflict was arising from the shift from one generation to the next.

“The founders are passing away and the new generation is coming in," he said.

"Previously it was one person, possibly two, that were making decisions, making it easy for them.

“Now you have 10 or 12. Obviously everyone has their own opinion on how businesses should be run.

“That’s why you have all these disputes and I think it will continue for a while before it starts to settle.”

Disputes and insistence on family control regardless of qualification are the biggest challenges facing GCC family businesses, according to a survey carried out at the launch of the DIFC Family Wealth Centre last month. 

The remaining top five concerns were talent retention and recruitment, lack of legal structure, digitisation and new technology, and tax.

UAE family business disputesSupplied
Emirati lawyer Habib Al Mulla says family-run business disputes can amount to billions of dirhams

In February last year Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum appointed a judicial committee to resolve a dispute among the heirs of the late Majid Al Futtaim, founder of the emirate’s property and retail conglomerate. 

“Succession planning is now a hot topic,” said Hani Kayal, deputy CEO of Saudi-headquartered Seraj Holding. 

“There’s no one-size-fits-all solution but a lot of conflict can be avoided if you plan ahead and the first milestone is putting in place strong governance. 

“In the family office I oversee, every son has a vertical that they’re responsible for and that way, while the sons work independently of each other, they all share in each other’s losses and gains.” 

In an effort to address this, both the UAE and Saudi Arabia have recently introduced significant regulatory and legal changes aimed at supporting family businesses. 

In January 2022, then UAE President Sheikh Khalifa, issued a new family business ownership governance law to ease the transition to successive generations. The law was implemented in January this year. 

The following month, Dubai’s ruler Sheikh Mohammed issued a decree establishing the Family Business Centre in Dubai which has a mandate of helping companies draw up succession plans in order to drive their sustainability and growth. 

Meanwhile, in January this year, Saudi Arabia implemented a new Companies Law which allows for the enactment of a family charter to regulate ownership, governance, management, work policy, relatives’ employment, and dividends distribution in an effort to ensure the sustainability of family-owned companies.

Latest articles

It is hoped the use of AI will speed up the time-consuming process of screening patients for cancer

Mubadala-backed US startup working on AI cancer care

A US genomics startup, backed by Abu Dhabi’s sovereign wealth fund Mubadala, is working with ChatGPT creator OpenAI to improve cancer screening and treatment using artificial intelligence models. Color Health, which uses data science and machine learning for genetic testing and counselling in hereditary cancer and heart conditions, has developed an AI assistant, or “copilot”, […]

Gems operates more than 60 schools with over 130,000 students across the Middle East and North Africa

Brookfield to invest in Dubai’s Gems Education

A consortium led by Canada’s Brookfield Asset Management is to invest in Gems Education, the UAE’s private school operator. Other members of the group include Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of the Republic of Azerbaijan. Financial details were not disclosed but the investment is expected to be almost $2 […]

Two companies are dominant in the lithium industry – Chile’s SQM and US business Albemarle. In 2023, each commanded about 20 percent of global supply

Saudi Arabia targets Chile for lithium investments

Saudi Arabia’s mining minister Bandar Alkhorayef will visit Chile next month to negotiate a deal to secure lithium to support the kingdom’s ambition to expand its electric vehicle (EV) sector, a news report said. Alkhorayef will meet with his counterpart in Santiago, Reuters reported, quoting a Chilean government statement. The report said the two officials will discuss […]

Oman's tourism revenue increase was driven by a 15 percent rise in hotel guest numbers

Luxury hotel revenues in Oman rise to $242m

Oman’s luxury hotels continued to make money in April as the number of guests surged. The revenue of three- to five-star hotels rose 11 percent year on year to OMR93 million ($242 million), the state-run Oman News Agency said, quoting the National Centre for Statistics and Information data. The revenue increase was driven by a […]