Dubai Court Approves Cryptocurrency as Valid Remuneration
UAE court' case number 1739 of 2024 (Labour), the court effectively recognized the payment of salaries in cryptocurrency under employment contracts.
The Dubai Court of First Instance delivered a landmark ruling in 2024, signaling a significant evolution in the UAE judiciary’s approach to cryptocurrency. In case number 1739 of 2024 (Labour), the court effectively recognized the payment of salaries in cryptocurrency under employment contracts.
Notably, this decision stands in stark contrast to a previous ruling in 2023, where a similar claim involving cryptocurrency was denied due to the employee’s inability to provide a precise valuation of the digital currency.
The case arose from an employee’s lawsuit claiming unpaid wages, wrongful termination compensation, and other employment benefits. The plaintiff’s contract stipulated a monthly salary in fiat currency and an additional 5,250 EcoWatt tokens, a form of cryptocurrency.
The dispute centered on the defendant’s failure to pay the EcoWatt token portion of the salary for six months and the alleged wrongful termination of employment.
The 2023 judgment (Judgment No. 6947 of 2023) reflected a cautious approach, as the court refused to award the EcoWatt token portion of the salary due to the lack of a clear method to calculate its value in fiat currency.
Dubai Court Adopts Digital Currency Payment
The court emphasized the need for tangible evidence of financial obligations, particularly when dealing with unconventional payment methods like digital currencies.
However, the 2024 ruling demonstrates a more progressive stance, embracing cryptocurrency as a valid form of remuneration. Additionally, the court ruled in favor of the employee, ordering payment in EcoWatt tokens rather than converting them to fiat currency.
The court based its decision on the principle that wages are a right of the employee for work agreed upon, stating that the employer bears the burden of proving payment.
Nonetheless, this decision marks a significant shift in the court’s approach, demonstrating a greater acceptance of cryptocurrency as a legitimate and enforceable means of payment.
It underscores the importance of upholding contractual agreements as long as they are clear, agreed upon by both parties and not in conflict with public policy or law.
The Dubai Court’s recognition of cryptocurrency as a valid form of remuneration has significant implications for the UAE’s evolving legal landscape. It suggests a growing awareness and acceptance of digital assets, encouraging businesses and individuals to embrace the potential of this innovative technology.
