‘The biggest risk to Dubai is the cost of living’

I was looking forward to lunch with Habib Al Mulla, perhaps the pre-eminent legal mind in the UAE.

I know from past encounters with Al Mulla – universally known as “Dr Habib”, thanks to a PhD from Cambridge – that he is eloquent, candid and often controversial. His aides had told me he really enjoys his food.

Our rendezvous surpassed my expectations. Over 90 minutes and seven shared dishes, I enjoyed a gastronomic tour of the world, a fascinating appraisal of the legal and moral landscape of Dubai – and a heartfelt call for a radical shake-up of the Emirates’ legal and media systems.

Now that’s what I call lunch.

We met at Mina Brasserie in the Dubai International Financial Centre Gate Village.

The venue is Dr Habib’s choice. I had visited on a couple of occasions, but the restaurant, a modern bustling brasserie with influences from all over the world, had left no particular impression on me.

Our small talk about past cases is interrupted by Rami Nasser, Mina’s acclaimed executive chef.

“I’m going to take care of the menu, if I may. You are in my hands,” says Nasser. We enthusiastically agree.

I’m beginning to realise that Dr Habib is not just a food enthusiast, but something of a culinary connoisseur.

Over “octobite” – a little pancake of potato, confit octopus and chimichurri – he tells me about his website, The Food Advocate, in which he has reviewed more than 1,000 restaurants, and his book A Foodie’s Guide to the World of Gastronomy.

“I do research on what restaurants I should visit. Then I do a rating and review. The problem, of course, sometimes is to get a booking,” the 63-year-old explains.

Given that the book and the website cover some of the most famous eating places in the world, from Tokyo to Los Angeles and many places in between, that problem has obviously been overcome.

He does not choose a favourite, but lists restaurants in Spain’s Basque Country and the Swedish capital Stockholm, and specifically namechecks Ultraviolet in Shanghai. “All outstanding,” he says.

“These days, I meet people and, instead of asking for my legal opinion, they ask for a restaurant recommendation. It’s not a legacy I was expecting to leave behind.”

We chat for a while about food and exercise – he regularly lifts weights and practises yoga – and then get back to the law.

His firm Habib Al Mulla & Partners dates back to 1984 and has played a leading role in the UAE’s transformation into a global financial and commercial hub. He advised the Dubai government on the legal framework for the DIFC, the region’s leading financial marketplace.

What had caught my eye, and sparked my lunch invitation, was the firm’s opening of an office in Moscow. This is only its second outside the UAE after Istanbul, though a Baghdad move is under consideration.

Over a second course of tuna and salmon tartare we discuss the somewhat controversial embrace of Russia.

Most big international law firms have pulled out of Russia since the invasion of Ukraine. Those that remain must tread a minefield of Western sanctions and banking obstacles.

To open up in those circumstances could either be seen as a snub to the Western legal system or an assertion of the “neutral” line that the UAE has taken since the invasion in February 2022.

The rationale for the move is commercial, he says. Many Russian businessmen have moved to the UAE since the invasion, while Emiratis are looking with interest at new opportunities in Russia.

Lawyers are an essential part of that transactional process. “If everyone is pulling out, that means there is an opportunity,” he says – stressing that the firm is scrupulous not to deal with sanctioned individuals or entities.

He points out, however, that “these are not UN sanctions. I think it would have been different if they were UN sanctions.” 

Many other parts of the world, including two of Asia's biggest economies, China and India, have reached the same conclusion and happily do business with Russia.

Russian business is characterised by a buccaneering attitude that does not always adhere strictly to a regulatory framework. I ask Dr Habib if he feels this may damage the image of the UAE elsewhere in the world.

Most Russian businesspeople in the UAE are involved in large-scale transactions, he replies, which often means dealing with the government. “Those are normally careful in how they deal with their partners and how they do their deals."

By now, main courses of king crab spaghetti and roasted seabass are on their way, in thankfully moderate portions expertly judged by Nasser. I’m already getting full.

Now is the time, I calculate, to ask Dr Habib about the most controversial event at his law firm over the past decade – the break-up with the American legal giant Baker McKenzie.

Four Seasons

In 2013 the US and UAE firms had announced a merger that was groundbreaking in the regional legal industry. But that relationship ended in 2022 after Dr Habib posted a series of tweets about the “problem with homosexuality in the West”.

“I think there was what I would call cultural disagreement – I wouldn't say clash of civilisations,” he says over a forkful of spaghetti. 

“When you have an international and global firm or company, you need to adjust to the jurisdictions that you work in. But at least we resolved it in a civilised way.”

Dr Habib says his stance was driven by his “cultural and religious” beliefs. When I ask if he sees himself as a defender of Emirati values, the response is an emphatic “Yes, yes”.

In recent years, a raft of legal changes have created a more liberal social environment in the UAE. Homosexuality and heterosexual sex outside marriage remain illegal, but cohabitation is no longer routinely prosecuted. Is the government adopting a blind eye approach?

“I think it’s something that, if there is no complaint from any private parties, the authorities will not act on their own,” he replies, pointing out that there are also discrepancies between federal legislation and individual emirates’ laws.

It is expensive to do business in Dubai today. And I have to be frank, Dubai is not a cheap hub today for startups

There has also been vague speculation about the possibility of a relaxation of the UAE’s strict attitude to illegal drugs, but Dr Habib believes that is still a step too far for a Muslim society such as the UAE.

He says emphatically he would never act for the defence in any case that involved drugs or prostitution.

As an observant Muslim, he never drinks alcohol, even with all that fine dining. We laugh at my little joke: “What do you call a meal without wine? Breakfast.” 

He asks for a Coke Zero with ice and lemon. I suppress the fleeting urge for a glass of something stronger.

His firm does not have an operation in Saudi Arabia, where the legal market is “already saturated”, nor does he travel there much, but he thinks allowing alcohol in the kingdom is a “bigger step than it was in the UAE”.

By now, the delicious main courses have been cleared away and we are looking at bowls of beautifully served peach and chocolate tart and pistachio ice cream.

Dr Habib has a reputation as a moderniser and reformer within the UAE economic and legal system, so I think it is essential to hear his view on the current state of the Emirates. Even in troubled regional times, the economy is going along nicely. How long will that last?

“I think for the short term, maybe another two years,” he replies.

That is quite specific, I say. What are the factors that could slow down the boom?

“Normally, I’d say political turmoil around the region, but the UAE has often benefited from that. I think what really threatens the UAE is the cost of living. That’s an issue that is going to affect real estate and everything else,” he says.

He singles out school fees – “ridiculously, ridiculously high” – and government levies as costs that could act as a brake on economic expansion. “It is expensive to do business in Dubai today. And I have to be frank, Dubai is not a cheap hub today for startups.”

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Some of his Dubai-based employees have asked to work remotely from other jurisdictions. “They are telling me, 'Let us work from our own country for half the amount. We’ll save the school fees.'” 

On the rising cost of rental real estate, he calls on the government to close “loopholes” that allow landlords to charge huge increases and threaten eviction. “Of course this should be stopped,” he says.

Even at the top of the Dubai financial apex, people are feeling the pinch. “I know investors who today prefer to incorporate their companies in Abu Dhabi Global Market rather than DIFC because it's cheaper. Even at that level, people think about the cost.”

Over coffee now, he is on a roll: “I think the biggest challenge and risk that Dubai is facing today is the rising cost of living. If it gets out of hand, if we reach a stage where it's unbearable, it will be extremely difficult to gain that back. 

“Those who will leave, companies and people, they will leave. It's very difficult to bring them back again.

“It’s not enough to say we are attracting millionaires. That’s one class. But we also need to maintain the middle class,” he says.

We indulge in a bit of small talk about the US election, the competitive nature of the legal business in the UAE and the banking scene, but I sense that Dr Habib has something he wants to get off his chest. 

“What does the UAE need to modernise or improve next?” I ask.

What follows amounts to a call for a radical transformation of the UAE’s legal, financial and media infrastructure.

“There is no capital markets law. You have two major stock exchanges, certain provisions in commercial companies’ law, but no capital markets law. Egypt has capital markets laws. You cannot be a leading economy if you don’t have capital markets laws,” he says.

Next he turns to criminal law: “I think the whole UAE criminal system needs a complete revamp. You cannot present yourself in the 21st century as a modern economy and still deny the accused the right to have a lawyer during police or prosecution interrogation.”

I’m surveying the bill – excellent food and service over nearly two hours for AED726.50 – and chatting about the local media scene, Dr Habib throws his final bombshell.

He does not read regional media any more, he says, but sees the Financial Times occasionally. Would the UAE benefit from its own version of the FT, I ask?

“I think that would be very desirable, but it needs two things: it needs investment – journalism is not something you make a profit from, at least not immediately.

“And you need to give [journalists] some room. You cannot treat them as government oriented or part of a government mouthpiece. I think if you want your media or journalism to gain credibility, you need to allow them to fly a bit – within the law. If they are just repeating the government statements, readers can see it,” he says.

To hear that from such a respected and influential member of the Emirati community was worth the price of lunch on its own.