The registration of a distribution relationship in the Commercial Agency Register kept with the Ministry of Economy of the United Arab Emirates automatically entails the application of the UAE Commercial Agency Law which is extremely protective of commercial agents and distributors. The registration of a distribution relationship can have considerable negative legal effects for the manufacturer. One repercussion is that upon registration the commercial agent or distributor obtains the exclusive right of sale for the products covered by the contract in the agreed territory. In addition, the manufacturer is obliged to pay the distribution partner a commission for sales concluded in the contractual territory, even if the distribution partner has not contributed to the conclusion of the deal. Furthermore, the distribution partner is authorised to prevent the import of products which are covered by the registration by third parties and even by the manufacturer itself. In the event of a dispute regarding the validity of a termination or non-renewal of the distribution agreement, the distribution partner retains these rights for the entire duration of the legal proceedings.
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