- Dubai Court upholds cryptocurrency salaries, ruling that contracts specifying crypto payments must be honored under UAE law.
- The 2024 ruling in Dubai sets a new precedent for cryptocurrency use in employment contracts, contrasting with the 2023 decision.
- UAE law now recognizes cryptocurrency as valid payment for wages, encouraging further integration of digital currencies in contracts.
In a notable ruling, the Dubai Court of First Instance has upheld the legality of using cryptocurrency for salary payments in employment contracts. This decision arose from a lawsuit involving an employee who claimed unpaid wages amounting to 5,250 EcoWatt tokens over six months.
The 2024 ruling, identified as case number 1739 of 2024, marked a shift in the United Arab Emirates’ legal stance on digital currencies and reflects the growing recognition of cryptocurrency in the financial sector.
A Shift in Legal Stance
This ruling contrasts with a 2023 decision, where the court had denied a similar claim due to the lack of clear valuation for the cryptocurrency involved. In that case, the court had acknowledged the presence of cryptocurrency in the employment contract but had refused to enforce it without concrete evidence of its value in fiat terms.
However, in 2024, the court took a different approach, ruling in favor of the employee and recognizing the salary payment in EcoWatt tokens as valid and enforceable, without the need for conversion into fiat currency.
Legal Foundation of the Ruling
The court based its ruling on Article 912 of the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021, emphasizing the importance of adhering to the terms outlined in employment contracts.
The employee’s contract specified both fiat and EcoWatt tokens as part of the agreed salary, and the court ruled that this agreement must be honored. The ruling signals a progressive interpretation of the law, one that aligns with the evolving nature of financial transactions in the digital age.
Impact on Employment Contracts
This decision sets a positive precedent for the acceptance of cryptocurrency in employment contracts across the UAE. The court’s ruling highlights the importance of clear contractual agreements and demonstrates the increasing integration of digital currencies into the UAE’s legal framework.
Notably, this ruling is expected to influence future employment contract disputes involving cryptocurrency and further solidify the role of digital currencies in financial transactions within the UAE.
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