Product safety and liabilitySafety and environmental
What are the most relevant automotive-related product compliance safety and environmental regulations, and how are they enforced? Are there specific rules for product recalls?
There are no specific product recall rules that exclusively apply to the automotive industry in the UAE. We have therefore set out general principles in relation to product recalls and compliance safety below.
Consumer safety and protection are regulated by the MOE. The safety and quality of products are further standardised in the UAE by ESMA and local authorities such as the Department of Economic Development, the the Dubai Municipality and Abu Dhabi Quality and Conformity Council. Together with the emirate-level authorities, the MOE has the power to investigate and enforce the recall of defective products based on consumer complaints and reports from international markets.
The laws relevant to product recall are the consumer protection laws under Federal Law No. 24 of 2006 and Federal Cabinet Resolution No. 12 of 2007. These state that a supplier of goods must promptly report any harmful defect discovered in any goods to the relevant UAE authorities and consumers. The Cabinet Resolution contains more detailed provisions regarding the notification and other procedures that must be followed by a supplier where a defect is found in goods. In practice, the notification is made to the UAE Ministry of Economy Consumer Protection Department, and an advertisement of the recall is published in UAE newspapers to notify consumers. The notification to the Consumer Protection Department must be made within 14 days of the commencement of any product recall. It should be in Arabic (but can be accompanied by the home language of the supplier) and it must:
- state the name of the goods, the supplier and the country of origin;
- contain a colour photograph of the goods and the defective part;
- contain a detailed description of the defect and its causes;
- indicate the number of products sold and the quantity to be recalled;
- suggest the type and nature of probable damage to consumers;
- indicate procedures adopted by the supplier to recall the goods;
- provide the manner of announcing the recall (such as a newspaper advertisement), together with the duration and timing of such announcements;
- provide procedures to be adopted by the supplier in relation to the defective goods; and
- estimate the time frame expected to remedy the defect.
The supplier has a further obligation to notify the Consumer Protection Department with a report within 30 days from initiation of the recall, which must set out the following information:
- the quantity of the goods recalled in the UAE;
- the number of recalled goods either repaired (in which case providing details of the defective parts repaired), replaced or returned for a full refund; and
- the procedures to be adopted to avoid the defect arising, where possible.
The advertisement in local UAE newspapers is also quite prescriptive in that it must not be less than 15cm by 15cm in size and must contain the following information:
- the name and address of the supplier;
- the name of the goods and the country of origin;
- a description of the defect;
- the trademark of the goods;
- instructions that consumers should follow to avoid harm; and
- instructions that consumers should follow to have the goods repaired or replaced or to have the price of the goods refunded.
The responsibility to notify the authorities and consumer will lie with both the manufacturer and the distributor, but it is the distributor that will be found liable for any failure to do so. Penalties for non-compliance in connection with product recall rules include a fine of a minimum of 1,000 dirhams (with no maximum financial penalty stipulated) and referral to the Public Prosecutor for possible prosecution for commercial fraud, which may result in a prison sentence of up to two years, presumably for the manager of the establishment being prosecuted.Product liability and recall
Describe the significance of product liability law, and any key issues specifically relevant to the automotive industry. How relevant are class actions or other consumer litigation in product liability, product recall cases, or other contexts relating to the automotive industry?
There are no specific product liability laws or regulations that exclusively apply to the automotive industry in the UAE. We have therefore set out below the general principles that apply in relation to consumer litigation in product liability and product recalls. Question 7 contains information relevant to sanctions a distributor may face for failure to comply with product recall laws.
A consumer can make a claim against a manufacturer or an importer under the UAE Civil Code if any products are defective and such defects are not covered by a warranty, or if the products do not fit their descriptions. Distributors can also be sued for misrepresentation in such cases. Additionally, consumers can bring claims for breach of contract against distributors under the Commercial Transactions Law No. 18 of 1993 if any vehicles are not fit for purpose.
In cases of ‘gross cheating’, the consumer can have the entire contract with the distributor invalidated. As a general rule, courts in the UAE only award damages for direct losses. Class actions do not yet exist in the UAE, and are unlikely to be introduced in the near future.
When claims are brought by consumers against distributors or importers, vehicle manufacturers may be required under the supply contract to indemnify such parties for the cost of remedying the defects in vehicles or spare parts.