Contracts With UAE Counterparties: A Russian-Law Checklist

A contract between a Russian company and a UAE counterparty is governed by the law the parties choose, and Russian law respects that choice under Article 1210 of the Russian Civil Code. If the contract is silent, a Russian court applies, unless the law provides otherwise, the law of the country where the party whose performance is decisive for the contract had its residence or principal place of business when the contract was made; for a sale this is the seller (Article 1211(1)–(2)). Under Article 1211(9) the court may apply another law if the contract is clearly more closely connected with another country. The first practical step is therefore simple: write the governing law, the dispute forum and the payment route into the contract before the first invoice is issued.

These three clauses decide most of what happens if the deal goes wrong. They define which court or tribunal hears the case, whether its decision can be enforced against the other side's assets, and whether payment can pass through banks at all. This guide looks at a typical Russia–UAE supply or service contract from the Russian side: what a Russian court will check, which documents a Russian bank will ask for, and where foreign parties most often make mistakes.

Who Is Actually Signing on the UAE Side

Before negotiating terms, establish the legal entity you are dealing with. Forming a company in the UAE can happen on the mainland or in one of many free zones, and the type of licence determines what the company may legally do and where. A trading licence, the commercial register extract and the documents showing who may sign on behalf of the company are the minimum set to request.

Russian private international law refers questions of a foreign company's legal capacity and the way it acquires rights and assumes obligations, and therefore the authority of its officers, to the law of the country where it was established (Article 1202 of the Civil Code). A Russian court will not presume that a manager with a business card had the right to sign. A power of attorney or board resolution, legalised for use in Russia, closes this gap.

Choosing the Governing Law

Parties may choose Russian law, UAE law or a neutral third law. The choice may cover the whole contract or only parts of it, and it may be made or changed after signing; a later choice applies retroactively from the date of the contract without prejudice to third parties' rights (Article 1210). Russian public-law requirements, such as currency control rules, apply to the Russian party regardless of the chosen law.

Russia is a party to the 1980 UN Convention on Contracts for the International Sale of Goods. As of 16 October 2026 the UAE is not listed in the UNCITRAL status table for the Convention, so it does not apply to a Russia–UAE sale merely because both parties' states are contracting states. It can still apply under Article 1(1)(b) when the rules of private international law lead to Russian law, unless the parties exclude it. The safest course is to state in the contract whether the Convention applies, and to recheck the status table at the time of signing.

Arbitration or State Courts

A clause that sends disputes to a Russian state court leaves the foreign party with a judgment that then has to be recognised in the UAE. A clause choosing a UAE court creates the mirror problem in Russia. Many Russia–UAE contracts choose arbitration instead, because both Russia and the UAE are parties to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (in force for the UAE since 19 November 2006, according to the UNCITRAL status table).

The arbitration clause should name the institution, the seat, the language and the number of arbitrators. Ambiguous clauses that mention two institutions or "arbitration in Dubai or Moscow" lead to preliminary fights about jurisdiction. Some UAE free zones have their own courts and arbitration bodies with procedures that differ from the onshore system; which forum suits a particular deal is checked under local law.

A Russian party subject to foreign sanctions should be aware of Article 248.1 of the Arbitrazh Procedure Code. It gives Russian arbitrazh courts exclusive jurisdiction over many disputes involving sanctioned persons, and under Article 248.1(4) this also applies where a foreign forum or arbitration clause cannot be performed because the restrictive measures create obstacles to the sanctioned party's access to justice. Article 248.2 allows a Russian court to prohibit proceedings elsewhere. A UAE counterparty should take this into account when assessing how a dispute might unfold.

Payments and Russian Currency Control

For the Russian party, a foreign trade contract triggers obligations under Federal Law No. 173-FZ "On Currency Regulation and Currency Control". Unless the law provides otherwise, a Russian exporter must ensure that the price is received into its accounts within the contract deadlines, and an importer must ensure that goods are delivered or advance payments returned (Article 19(1)). Contracts above the threshold set by Bank of Russia Instruction No. 181-I of 16 August 2017, which remains in force as of 16 October 2026, have to be registered with the Russian bank that services the payments; the current thresholds are checked in the Instruction itself.

The payment route deserves as much attention as the price. Foreign banks apply their own compliance checks, and a transfer can be delayed or returned even when both parties act lawfully. A clause that allows a change of the receiving bank, defines who bears the cost of returned payments and extends deadlines when a bank holds a transfer protects both sides.

Penalties, Liability and Force Majeure

Russian law allows the parties to agree a contractual penalty for late delivery or late payment. Under Article 333 of the Civil Code a Russian court may reduce a penalty that is clearly disproportionate to the consequences of the breach, so an exaggerated figure is no assurance of recovering it in full. A liability cap and an exclusion of lost profit are generally enforceable between businesses, but an advance agreement excluding or limiting liability for intentional breach is void (Article 401(4) of the Civil Code). A business is also liable without fault unless the breach was caused by force majeure (Article 401(3)).

Force majeure clauses should name the events that matter for the deal, including restrictions on payments and transport, and set out a procedure: written notice, supporting evidence and the right to terminate if the obstacle lasts too long. A general reference to "circumstances beyond control" leaves the court to decide what was covered.

Documents, Language and Evidence

A Russian state court requires documents in a foreign language to be accompanied by a duly certified Russian translation (Article 75(5) of the Arbitrazh Procedure Code). Signing the contract in Russian and English, with a clause on which version prevails, saves time and money later. If a UAE court may be involved, Arabic translation and local requirements for documents are checked under local law.

Keep the full trail of correspondence: offers, specifications, delivery documents, acceptance reports and payment confirmations. When UAE businesses and Russian companies trade on a series of purchase orders rather than one master contract, each order should refer to the framework terms, otherwise each shipment may end up governed by a different set of rules.

Before You Sign: Practical Steps

Request and verify the counterparty's licence and signatory powers. Agree governing law and the dispute forum in writing, with a clear arbitration clause if arbitration is chosen. Map the payment route and confirm with the Russian bank which documents it will require. Decide how penalties, liability limits and force majeure will work for this particular deal.

The attorney advises foreign companies and Russian businesses on cross-border contracts from the Russian-law side: drafting and review of governing law and arbitration clauses, currency control questions for the Russian party, and pre-dispute assessment of claims. Every contract has its own risk profile, so review starts with the draft and the parties' documents.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.