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Dubai Court Ruling
A landmark decision from the Dubai Court of First Instance has ruled that employees can be allowed to receive their salaries paid in cryptocurrency under employment contracts. This marks a significant shift in the United Arab Emirates (UAE)’s legal approach to digital currencies with crypto now recognised as a legal and valid form of salary payment.
This ruling emerged from case number 1739 of 2024 and it contrasts with a decision made in 2023 where a similar claim was rejected due to the lack of clear valuation of the cryptocurrency involved. A partner at UAE law firm NeosLegal, Irina Heaver, has praised the ruling and noted it is a “progressive approach” which aligns the evolving nature of financial transactions in the Web3 economy. She stated:
“This decision reflects a broader acceptance of cryptocurrency in employment contracts and highlights the court’s recognition of the evolving nature of financial transactions within the Web3 economy.”
The case came about when an employment dispute arose when an employee sued for unpaid wages. This included 5,250 ecowatt tokens, which were not paid over six months. Other parts of the claim included wrongful termination compensation along with other benefits. The employees contract had noted their monthly salary was to be paid partly in fiat currency and partly in 5,250 EcoWatt tokens. The employer had failed to pay the employee the cryptocurrency portion of their salary over a six month period. This led the employee to file a lawsuit.
The ruling from the court means the employer must fulfil their obligations contractually and pay the salary in EcoWatt tokens without the requirement of conversion of the payment into fiat currency. This ruling has validated cryptocurrency as a legitimate form of remuneration and has emphasised the important of honouring clear contractual agreements.
The court made use of Article 912 of the UAE Civil Transactions Law and Federal Decree-Law No. (33) of 2021. In doing so they highlighted a progressive interpretation which aligns with the evolving financial landscape. This decision sets a precedent for the broader acceptance of cryptocurrency in employment contracts in the UAE.
Back in 2023 the Dubai Court addressed a similar case involving EcoWatt tokens in an employment contract, and back then the court noted the inclusion of payment in cryptocurrency but ruled against the employee’s claim because the plaintiff failed to provide a clear and reliable method for converting the cryptocurrency into fiat currency. At the time the court stated:
“It is established according to the Court of Cassation, that determining the employment relationship, its start, duration, and the resulting effects falls under the authority of the trial court. As the claimant did not provide evidence of the value of the digital currency, the court disregards it.”
This 2024 ruling shows a significant shift in the court’s approach. They recognised that cryptocurrency is a valid form of payment and enforced the payment of the agreed-upon salary in EcoWatt tokens without requiring conversion to fiat. As part of the 2024 ruling the court noted:
“As the respondent did not provide evidence of payment in EcoWatt tokens, the court orders the respondent to pay the claimant the value of her wages in EcoWatt tokens.”
Have a great day.
Peace. CryptoGod-1.
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