Buyer or Seller Withdraws After Signing an SPA in the UAE, Practical Remedies

When a buyer or seller withdraws after signing a Sale and Purchase Agreement (SPA) in the UAE, the consequences can be significant, particularly where completion conditions have been satisfied, deposits have been paid or substantial transaction costs have been incurred. Whether a buyer refuses to complete, a seller declines to transfer shares, or the parties disagree over outstanding conditions precedent, the available remedies depend on the SPA’s terms, the applicable governing law and the competent court or arbitral tribunal. This guide examines the practical steps available to buyers and sellers in UAE transactions, including interim relief, specific performance, damages, deposit protections and enforcement before UAE onshore courts, the Dubai International Financial Centre (DIFC) Courts and the Abu Dhabi Global Market (ADGM) Courts.

Consider three common scenarios. First, a buyer withdraws pre-closing despite having paid a deposit, citing a change in financing or market conditions. Second, a seller refuses to deliver the sale shares after signature, perhaps because a better offer has arrived. Third, the parties disagree over whether a condition precedent has been satisfied, leaving completion in limbo. Each demands a slightly different response, but all share a common urgency. The practical advice below reflects common practice in DIFC, ADGM and UAE onshore transactions.

First 48 hours, urgent practical steps when a buyer or seller withdraws after signing an SPA

When a buyer or seller withdraws after signing an SPA in the UAE, the priority is to preserve contractual rights, relevant evidence and transaction value before positions become more difficult to resolve. The parties should promptly assess the applicable contractual deadlines and take appropriate steps to protect their position. The following checklist outlines the immediate actions to consider.

• Preserve documents and communications. Lock down all emails, messages, board minutes, drafts and negotiation records. These support both interim applications and any later damages claim.
• Review pending transfer actions. Identify any outstanding share transfers, payments or registry filings and determine whether they can lawfully be suspended under the SPA and applicable requirements. Where necessary, seek appropriate interim protection to prevent completion steps that could prejudice contractual rights.
• Check conditions precedent and termination rights. Confirm whether all conditions have been satisfied or waived, and whether the SPA actually gives the counterparty any right to terminate.
• Confirm deposit or escrow status. Identify who holds any deposit, on what terms, and what triggers release or forfeiture.
• Serve contractual notices. Serve any notice of default or breach strictly in accordance with the SPA’s notice provisions and timing, as defective notice can derail later remedies.
• Preserve evidence for interim relief. Gather evidence of harm, dissipation risk or the uniqueness of the asset, which courts and tribunals require for urgent orders.
• Instruct local counsel. Engage counsel admitted in the relevant forum, onshore, DIFC or ADGM, without delay.
• Assess interim measures. Decide whether an injunction, attachment order or emergency arbitrator application is warranted within the first 24–48 hours.

A short immediate notice should record the fact of the counterparty’s withdrawal or refusal, reserve all rights, demand performance within a stated period, and warn that failure to comply will trigger legal remedies including interim relief. Keep the tone firm but measured, this document may later be read by a judge or arbitrator.

Interim relief and emergency measures, how and where to apply

Interim relief is frequently the most important tool when a buyer seller withdraws after signing spa, because it preserves the subject matter of the deal and the assets needed to satisfy any eventual judgment or award. Across the UAE, the principal interim measures are injunctions (restraining or mandatory), freezing or attachment orders over assets, orders preserving shares or documents, and provisional measures granted by an arbitral tribunal or emergency arbitrator. The procedure, the threshold and the speed differ markedly between onshore courts, the DIFC Courts, the ADGM Courts and arbitration.

The first decision is identifying the appropriate forum and the available route for urgent relief. Where the SPA contains an arbitration agreement, the parties should examine the applicable institutional rules, the arbitral seat and whether emergency arbitrator procedures are available. Depending on the circumstances, interim relief may be sought from an emergency arbitrator, the constituted tribunal or a competent court exercising powers in support of arbitration. Court assistance is not necessarily limited to the enforcement of arbitral awards or where the tribunal cannot act. In the absence of an arbitration agreement, the proper court will be determined by the jurisdiction provisions of the SPA and the applicable jurisdictional rules. The choice of court in the contract alone does not determine jurisdiction where the applicable legal requirements are not met.

The requirements for interim relief depend on the applicable jurisdiction and the particular measure requested. In the DIFC and ADGM Courts, applications for injunctions and other interim remedies are assessed under the relevant court rules and applicable legal principles, including considerations such as the merits of the underlying claim, the risk of harm and the adequacy of damages. Freezing orders require additional justification, including evidence supporting the risk of asset dissipation. UAE onshore courts apply different statutory requirements to provisional and precautionary measures, including precautionary attachment, and the common-law tests should not be treated as universally applicable. Applications must be supported by evidence in the form required by the relevant court, and urgent applications without notice are available only where the applicable procedural requirements are satisfied.

DIFC interim relief, process and practical tips

The DIFC Courts operate English-language procedures and provide for interim injunctions, preservation orders and other provisional remedies under the Rules of the DIFC Courts, including Part 25. Their jurisdiction must, however, be established under the applicable legislation, including Dubai Law No. 2 of 2025 Concerning Dubai International Financial Centre Courts. A connection with the DIFC does not automatically give the DIFC Courts jurisdiction over every SPA dispute, although parties may expressly agree in writing to DIFC Courts jurisdiction where the statutory requirements are met. The DIFC Courts may also exercise specific powers to grant interim measures in support of proceedings or arbitration outside the DIFC. Applicants should prepare the required supporting evidence, identify the precise relief sought and address the applicable requirements for urgent relief, including any undertaking as to damages.

ADGM interim relief, process and practical tips

The ADGM Courts likewise apply English-language, common-law procedures and have court rules and guidance addressing urgent relief. ADGM remedies for an SPA dispute include injunctions and preservation orders, and the ADGM Courts are supportive of arbitral interim measures and emergency arbitrator orders. As in the DIFC, practical timelines for urgent relief can be comparatively short when the application is properly evidenced. Early engagement with ADGM-registered counsel is essential to meet the court’s procedural and evidential expectations.

Onshore UAE courts, process and practical tips

Onshore proceedings before the Dubai Courts, the Abu Dhabi Judicial Department or other emirate-level courts are conducted in Arabic and follow civil-law procedures. Urgent and provisional measures, including precautionary attachment over assets and shares under the UAE Civil Procedure framework, are available, but the process, the evidentiary expectations and the speed can vary by emirate and by judge. Timelines are generally more variable than in the DIFC or ADGM. Documents typically require certified Arabic translation, and local counsel should advise on the precise filing route and supporting evidence.

Arbitration-based emergency measures (EA and provisional measures)

Where the SPA provides for arbitration, the availability of emergency measures depends on the applicable institutional rules and arbitration agreement. Certain institutional rules permit the appointment of an emergency arbitrator before the main tribunal is constituted, while arbitral tribunals may exercise powers to order interim or precautionary measures under the applicable arbitration law. In arbitrations seated in the UAE and governed by Federal Law No. 6 of 2018, as amended, an arbitral tribunal may order interim or precautionary measures under Article 21, including measures to preserve assets, maintain the status quo and prevent harm. Emergency arbitrator procedures are distinct from these statutory tribunal powers and must be considered under the relevant institutional rules and applicable law. Depending on the circumstances, interim protection may include measures intended to prevent the transfer of disputed shares or preserve assets pending resolution of the dispute.

Enforcement of arbitral interim measures depends on the legal character of the order, the arbitral seat, the applicable arbitration rules and the jurisdiction in which enforcement is sought. The UAE Federal Arbitration Law provides mechanisms for court assistance in relation to interim measures ordered by an arbitral tribunal. The DIFC and ADGM Courts have separate statutory frameworks governing court assistance and enforcement in arbitration matters. An emergency arbitrator’s order should not automatically be treated as equivalent to a tribunal order or final arbitral award for enforcement purposes. The appropriate route must be assessed under the applicable legislation and court procedures.

Specific performance versus damages, availability and strategic choice

When a buyer or seller withdraws after signing an SPA, the non-defaulting party must assess whether to seek completion of the transaction, claim financial compensation or pursue another remedy available under the SPA and applicable law. Specific performance, an order requiring the defaulting party to actually complete the sale or purchase, is a powerful remedy, but its availability differs across UAE jurisdictions and is never automatic.

In onshore UAE, specific performance of contractual obligations is governed by Federal Decree-Law No. 25 of 2025 Promulgating the Civil Transactions Law, which entered into force on 1 June 2026 and repealed Federal Law No. 5 of 1985. The new law provides a framework for enforcing contractual obligations and awarding compensation where performance is impossible or the relevant legal requirements are met. Whether a court can compel completion of a share sale depends on the nature of the contractual obligations, the circumstances of the breach and the applicable corporate and share-transfer requirements. It would therefore be inaccurate to assign a general likelihood of success or suggest that UAE onshore courts ordinarily prefer damages in all such cases. In the DIFC and ADGM, specific performance is also available in appropriate circumstances, subject to the applicable legal principles and judicial discretion, including whether damages would provide an adequate remedy.

A claim for specific performance in UAE disputes is most persuasive where the SPA expressly records that the shares are unique, that damages would be inadequate, and that the parties agree specific performance should be an available remedy. Such wording does not bind a court or tribunal, but it meaningfully strengthens the argument.

Damages for breach of an SPA may be available where the applicable law and contractual requirements for compensation are satisfied. The recoverable amount depends on the governing law, the nature of the breach, the evidence of loss and any contractual limitations or agreed compensation provisions. Rules concerning causation, recoverable loss, foreseeability and mitigation differ between UAE onshore law and the legal frameworks applicable in the DIFC and ADGM. Two relevant categories of contractual protection and compensation are:

• Liquidated or agreed damages. A clause fixing the sum payable on breach can simplify recovery, though under UAE law the courts retain the power to adjust an agreed sum so that it reflects the actual loss suffered.

• General damages. Where no agreed compensation provision applies, the claimant must establish entitlement to compensation under the governing law, including the relevant requirements concerning breach, causation and recoverable loss. The extent of any obligation to mitigate loss and the recoverability of costs must be assessed under the applicable legal framework.

Strategically, specific performance is preferred where the asset is unique or where completion preserves far more value than compensation; damages are preferred where a clean financial exit is acceptable, the asset is fungible, or enforcement of a performance order would be difficult. The deposit and escrow position, discussed next, often influences which route delivers the fastest recovery.

Escrow, deposit and contractual protections, preserving transaction value

Deposit and escrow arrangements can provide important protection when a buyer or seller withdraws after signing an SPA in the UAE. Their effectiveness depends on the contractual release conditions, the nature of the deposit and the applicable governing law. A deposit does not necessarily become payable to the non-defaulting party merely because the counterparty fails to complete. The main protective structures include escrow accounts holding completion or deposit funds, contractual release mechanisms, holdbacks securing specified obligations and agreed compensation provisions. Step-in rights may also be negotiated where appropriate, although their operation depends on the transaction structure and any required third-party or regulatory approvals.

Where a deposit is held in escrow, the escrow agreement should specify the conditions for its release, including completion, termination and default. The escrow agent’s obligations depend on those instructions, the governing law and any applicable legal or regulatory requirements. Release may require specified documents, joint instructions or confirmation that a contractual condition has been satisfied. If entitlement to the deposit is disputed, the agent may be required to retain the funds pending resolution, depending on the escrow agreement. A party seeking to protect the deposit should consider whether contractual restrictions or appropriate court or arbitral measures are available to prevent its premature release.

Sample escrow wording for discussion only, and to be settled with counsel, should address the following:

• Release triggers. Define precisely the events that cause release to each party, tied to completion, breach or termination.
• Default forfeiture. Specify whether the deposit is intended as security, an amount payable on default or an agreed measure of compensation, and identify the circumstances in which it may be retained or recovered. Any forfeiture provision should be assessed under the governing law, including applicable rules concerning agreed compensation and judicial adjustment.
• Dispute mechanism. Specify how the escrow agent must respond to conflicting instructions, including whether the funds are to be retained pending joint instructions, an agreed determination or an enforceable court or arbitral decision, subject to the applicable law.
• Agent obligations. Confirm the agent acts only on the agreed documentary triggers.

Where a party claims entitlement to retain or recover a deposit following default, the first step is to confirm the contractual basis for that claim and comply with any applicable notice or termination requirements. The escrow agent should then be instructed in accordance with the SPA and escrow agreement. If release is disputed, the parties may need to pursue the agreed dispute resolution procedure or seek an appropriate court or arbitral order. Interim protection should be considered where there is a sufficient legal and evidential basis to prevent dissipation or premature release of the funds.

Drafting SPA clauses to enable interim relief and enforcement

Prevention is far cheaper than cure. Many problems that arise when a buyer seller withdraws after signing spa can be anticipated at the drafting stage through a disciplined dispute resolution clause and supporting provisions. The following clause bank, offered for discussion only, and to be settled with counsel, reflects common protective drafting in UAE deals.

• Dispute resolution and forum selection. Choose the court or arbitral seat deliberately (onshore, DIFC or ADGM), and align the jurisdiction clause with where assets and enforcement will realistically occur.
• Emergency arbitrator and interim measures. Expressly permit recourse to an emergency arbitrator and preserve the right to seek interim relief from the courts in aid of arbitration.
• Expedited injunctive relief. Acknowledge that breach may cause harm not fully remediable by damages and that the innocent party may seek urgent injunctive relief and specific performance.
• Preservation of rights. Confirm that seeking one remedy does not waive any other, and that interim applications do not prejudice the substantive claim.
• Escrow instructions. Build the deposit and escrow release and forfeiture triggers into the SPA and the escrow agreement so they are consistent.
• Specific performance acknowledgement. Record that the shares are unique and that damages may be inadequate, to support a later performance claim.
• Confidentiality for emergency filings. Address how urgent applications and arbitral measures are handled to protect commercially sensitive information.

A clear dispute resolution clause that combines a defined forum, emergency-relief access and escrow-backed deposits gives the non-defaulting party credible, fast remedies and a strong negotiating position if the other side considers walking away.

Enforcement, cross-jurisdiction execution and real-world considerations

A judgment or award is only as valuable as its enforceability. Because UAE deals span onshore, DIFC and ADGM, the enforcement pathway must be mapped at the outset. Orders of the DIFC Courts are enforceable within the DIFC, and orders of the ADGM Courts within the ADGM; cross-enforcement to onshore assets, and between the financial free zones and onshore, proceeds through established referral and recognition mechanisms (including the DIFC–Dubai Courts and ADGM–Abu Dhabi Courts memoranda and the applicable judicial authority laws), so counsel should plan the route to the debtor’s actual assets early.

Arbitral awards benefit from established recognition and enforcement mechanisms, although the applicable procedure depends on whether the award is domestic or foreign and the jurisdiction in which enforcement is sought. UAE-seated arbitral awards governed by the Federal Arbitration Law are subject to the recognition and enforcement provisions of that legislation, while foreign arbitral awards may be recognised and enforced under the New York Convention and applicable UAE procedural rules, subject to the relevant conditions and grounds for refusal. Foreign court judgments are subject to separate recognition and enforcement requirements under the applicable UAE procedural framework and any relevant bilateral or multilateral treaty. Parties should identify the appropriate enforcement route by reference to the origin of the judgment or award and the location of the assets against which enforcement is sought.

Practical enforcement considerations include the location and availability of the counterparty’s assets, the possibility of interim measures to protect those assets and the effect of any applicable insolvency or restructuring proceedings. In share sale disputes, parties must also consider whether completion requires corporate approvals, amendments to constitutional documents or registrations with the relevant mainland or free-zone authority. The location of assets does not, by itself, determine which court has jurisdiction over the underlying dispute. Parties should therefore assess jurisdiction, recognition and enforcement separately, including the procedures necessary to give effect to a share transfer or enforce a monetary judgment. Where the transaction has an international element, the potential cross-border enforceability of an arbitral award may be relevant when selecting the dispute resolution mechanism.

Practical case studies and sample letters

These short illustrative examples show how remedies operate in practice.

Buyer withdraws pre-closing with a deposit at stake

A purchaser indicates that it will not complete despite the satisfaction of the applicable conditions precedent, with a deposit held in escrow. The seller preserves the relevant communications, reviews the SPA’s default and termination provisions and serves any required contractual notice. If the SPA provides for retention of the deposit following buyer default, the seller may seek its release in accordance with the escrow agreement. Where entitlement is disputed, further legal steps may be necessary. Whether the seller can retain the deposit, recover additional damages or compel completion depends on the governing law, the contractual provisions and the circumstances of the breach.

Seller refuses to deliver shares

After signature, a vendor declined to transfer the sale shares. A buyer relying on an arbitration clause with an emergency arbitrator provision can seek a provisional measure restraining any dealing with the shares, then pursue specific performance supported by SPA wording recording the uniqueness of the holding.

A sample urgent notice should state the withdrawal or refusal, reserve all rights, demand performance within a defined period and warn of interim relief. A sample interim application outline should identify the serious issue, the harm, the risk of dissipation where relevant, the balance of convenience and the precise order sought, each supported by appropriate evidence. All sample wording is for discussion only, seek counsel before use.

Comparison table, remedies available: onshore UAE versus DIFC versus ADGM

Signed sale and purchase agreement with UAE skyline in background, illustrating the remedies available when a buyer seller withdraws after signing spa.

Conclusion and next steps

When a buyer or seller withdraws after signing an SPA in the UAE, prompt action is essential to preserving contractual rights and transaction value. The parties should preserve relevant evidence, review pending transfers and filings, assess outstanding conditions precedent and termination rights, confirm the deposit and escrow position, and comply with applicable contractual notice requirements. Where necessary, interim relief or emergency arbitration should be considered in light of the available procedures and the circumstances of the dispute. The choice between specific performance and damages must take account of the governing law, the contractual provisions and the practical requirements for enforcement.

Deal teams who map remedies and enforcement before signing, and who act decisively when a counterparty withdraws, are the ones most likely to preserve value. For further guidance, see Corporate Transactions, United Arab Emirates and the directory of UAE Corporate Transactions lawyers.

Need Legal Advice?

This article was produced by Global Law Experts. For specialist advice on this topic, contact Jakob Kisser at Kisser Legal, a member of the Global Law Experts network.

Sources

1. 1. UAE Civil Transactions Law 2025
   2. UAE Federal Arbitration Law
   3. UAE Civil Procedure Code
   4. Dubai Law No. 2 of 2025
   5. DIFC Courts Rules, Part 25
   6. ADGM Courts legislation and procedure