Litigation Financing Agreement for United Arab Emirates

Litigation Financing Agreement Template for United Arab Emirates

A comprehensive agreement governed by UAE law that establishes the terms and conditions under which a litigation funder provides financial support to a party pursuing legal claims. The document outlines funding commitments, success fee structures, control mechanisms, and risk allocation between parties, while ensuring compliance with UAE federal laws and regulations. It incorporates specific provisions addressing UAE civil law requirements, local court procedures, and where applicable, DIFC regulations, making it suitable for litigation funding arrangements within the UAE jurisdiction.

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What is a Litigation Financing Agreement?

This document serves as the primary contractual framework for litigation funding arrangements in the UAE, where a third party agrees to finance litigation in exchange for a return from the proceeds. The Litigation Financing Agreement is particularly relevant in complex commercial disputes where claimants seek external funding to pursue their claims. It addresses specific requirements of UAE federal laws, including Civil Code provisions, financial regulations, and where applicable, DIFC requirements. The agreement typically covers funding amount, success fee calculations, control rights, termination provisions, and confidentiality obligations. It's designed to provide clarity on the rights and obligations of both the funder and funded party while ensuring compliance with local regulations regarding financial transactions and litigation procedures. This document type has become increasingly important as litigation funding gains traction in the UAE market, particularly for commercial and international disputes.

What sections should be included in a Litigation Financing Agreement?

1. Parties: Identification of the Funder and the Funded Party, including full legal names and addresses

2. Background: Context of the underlying litigation and purpose of the funding arrangement

3. Definitions: Key terms used throughout the agreement including 'Claim', 'Proceeds', 'Success Fee', 'Adverse Costs', etc.

4. Funding Commitment: Details of the funding amount, drawdown conditions, and funding schedule

5. Success Fee and Returns: Calculation methodology for the funder's return and priority of payments from proceeds

6. Control and Conduct of Litigation: Decision-making rights, level of funder's involvement, and settlement provisions

7. Representations and Warranties: Key assurances from both parties regarding authority, information disclosure, and claim ownership

8. Confidentiality: Obligations regarding confidential information and permitted disclosures

9. Term and Termination: Duration of agreement, termination rights, and consequences of termination

10. General Provisions: Standard boilerplate clauses including notices, amendments, assignment, and governing law

What sections are optional to include in a Litigation Financing Agreement?

1. Security Arrangements: Used when the funder requires security over the claim proceeds or other assets

2. Third Party Rights: Required when other parties (like lawyers or insurers) have rights under the agreement

3. ATE Insurance: Included when after-the-event insurance is part of the funding arrangement

4. Cross-Border Provisions: Required when litigation involves multiple jurisdictions

5. Shariah Compliance: Necessary when the agreement needs to comply with Islamic finance principles

6. Priority and Intercreditor Provisions: Used when multiple funders or creditors are involved

What schedules should be included in a Litigation Financing Agreement?

1. Case Budget: Detailed breakdown of estimated litigation costs and expenses

2. Drawdown Schedule: Timing and conditions for release of funding tranches

3. Success Fee Calculations: Detailed examples and formulas for calculating the funder's return

4. Key Personnel: List of key individuals involved in the litigation and their roles

5. Form of Security Documents: Templates for any required security arrangements

6. Litigation Plan: Strategic overview of the litigation including timeline and key milestones

7. Due Diligence Summary: Summary of key findings from funder's due diligence

8. Counsel's Opinion: Summary or copy of legal opinion on claim merits

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant Industries

Legal Services

Financial Services

Investment Management

Insurance

Private Equity

Banking

Dispute Resolution

Legal Tech

Asset Management

Professional Services

Relevant Teams

Legal

Compliance

Risk Management

Finance

Investment

Operations

Dispute Resolution

Corporate Affairs

Treasury

Deal Advisory

Relevant Roles

Legal Counsel

Chief Legal Officer

Litigation Manager

Investment Manager

Risk Manager

Chief Financial Officer

Compliance Officer

General Counsel

Legal Director

Investment Director

Portfolio Manager

Claims Manager

Director of Operations

Chief Risk Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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