3 Circumstances in which division is impossible and an order for sale is permitted

“No harm to the partners” is the condition of selling the indivisible money

• The legislator permitted the request to sell the whole property in the event that it was not possible to sell the share.

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• Muhammad Naguib: “The amendment reflects the legislator’s farsightedness in deciding the time limit for re-ordering the sale.”

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The arbitrator and legal advisor, Muhammad Naguib, said that the development of the legislative system in the state during the past two years has affected important aspects that the UAE legislator saw the need to reconsider them from the reality of the cases pending before the courts, in line with the public interest, pointing out that the important legal issues affected by the amendment “Divide the joint money.” He added a prerequisite for accepting the request to sell the money that cannot be divided, which is not to harm the rest of the partners.

In detail, Najib stated that the origin of the money is that it is divisible between the partners in it, but this may not be possible in three cases, the first being the inability to divide in kind, and secondly if it would cause harm to the rest of the partners, and thirdly, a significant decrease in the value of the asset to be divided.

He pointed out that in the event that any of the three conditions is achieved, any of the partners may sell his share to another partner, or ask the judge to sell it according to the first paragraph of Article 1166 of Law No. 5 of 1985 regarding civil transactions, which was not subject to amendment.

He added that if it is not possible to sell the share, any of the partners may request to sell the whole eye in the manner specified in the law, and the price is distributed to the partners, each according to his share, pointing out that an amendment was made under Federal Decree Law No. 30 of 2020, on the issue of limiting the bidding to the partners first, In the second paragraph of Article 1166 of the old law, the judge could order that the bidding be restricted to the partners first, if they requested it unanimously, but it was amended to limit the bidding to the partners if one of them requested it, without the requirement of unanimity.

Najib explained that according to this amendment, the legislator permitted the request to sell the whole eye in the event that it was not possible to sell the share, then distribute the price to the partners according to their shares, while the sale request before the amendment was limited to the partner’s share, not the whole eye.

He pointed out that the legislator touched on a very important matter through the lawsuits before the courts, which is that the dispute that occurs between the partners may not be resolved except through the sale of the whole eye, and in light of their lack of consensus on limiting the bidding to them, according to the old law, new parties may enter , which leads to selling the share to a foreigner from outside the family (if the eye is family) (or from outside the partners who have certain ties that were the basis for the existence of this joint money), which causes new problems, so it was sufficient for one of the partners to limit the bidding to the partners first.

Naguib added that the legislator added, pursuant to Federal Decree Law No. 30 of 2020, another important paragraph that states: “In all cases, the sale request is not accepted if it results in greater harm to the rest of the partners, and it is not accepted to submit a new request to sell from the same person before the lapse of a year from the date of the sale. Non-acceptance of the previous request or the removal of the damage, whichever comes first.

He stressed that this amendment reflects the legislator’s consideration in determining the time limit for re-ordering the sale, which is set at one year after his previous request, as the circumstances surrounding the previously rejected sale request may change within a year, or the damage to the partners will disappear, which is a condition for accepting a request. Selling from the ground up, pointing out that in addition to the importance of modifications in strengthening the partnership, it establishes justice between the partners when selling the money shared between them, and reduces the possibility of any deposits in the souls.

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