eSignature Legality Guide

The ADGM Electronic Transactions Regulations apply within the ADGM free zone. They state that if an ADGM regulation or applicable law requires a signature, or sets consequences for not signing a document or record, this requirement is met if an electronic signature is used—unless the regulation or law specifically prohibits electronic signatures. As long as the electronic signature is "valid" under the ADGM Electronic Transactions Regulations, it is treated the same as a handwritten signature.

The DIFC free zone has its own electronic transactions law, the DIFC Electronic Transactions Law, which provides that any requirement for a signature in other DIFC laws can be satisfied with an electronic signature. Additionally, information cannot be denied legal effect, validity, or enforceability solely because it is in electronic form.

Key changes in e-signature law since 2020 include:

• The replacement of Federal Law No. 1 of 2006 on 20 September 2021, which addressed e-transactions and e-commerce, with the UAE Electronic Transactions Law;
• The repeal of Dubai’s electronic signatures law (Dubai Law No. 2 of 2002 on electronic transactions and commerce) following the introduction of the UAE Electronic Signatures Law on 20 September 2021;
• The introduction of the ADGM Electronic Transactions Regulations 2021 on 28 February 2021, which are specific to electronic signatures in the ADGM free zone.

Onshore UAE

The UAE Electronic Transactions Law defines an electronic signature as "A signature consisting of letters, numbers, symbols, sound, fingerprint, or an electronic form processing system, attached to, or logically associated with an Electronic Document, verifying the identity of the Signatory and his/her approval of the information contained in such document."

The law also introduces the concepts of Reliable and Qualified Electronic Signatures.

• "Reliable Electronic Signatures" must meet the following criteria:
  1. They are linked to, and under the full and exclusive control of, the signatory
  2. They can identify the Signatory
  3. They are connected to the signed data in a way that any changes to the data can be detected
  4. They are created using technical and security methods as specified by the Executive Regulations, and
  5. They meet any other conditions set by the Executive Regulations
• "Qualified Electronic Signatures" are Reliable Electronic Signatures that are created by qualified electronic signature devices and are issued based on qualified electronic signature authentication certificates. These devices must comply with certain requirements in the UAE Electronic Transactions Law to ensure the confidentiality, security, and authenticity of the signature. A qualified electronic signature authentication certificate is an electronic signature authentication document issued by a TDRA-approved qualified trust service provider.

Generally, using a Qualified Electronic Signature is considered to fulfill the requirements of the UAE Electronic Transactions Law, so the electronically signed document is treated as meeting the legal signature requirements for the relevant transaction. It is not clear if Reliable Electronic Signatures have any special status under the law.

The ADGM Electronic Transactions Regulations define an electronic signature as "an electronic sound, symbol or process attached to or logically associated with an electronic record, which may be used to identify the signatory and to indicate the signatory’s approval of the Information contained in the electronic record."

An Electronic Signature is considered "valid" under the ADGM Electronic Transactions Regulations if the type of signature used is either "reliable" and suitable for the purpose for which the electronic record was created or sent, considering all circumstances (including any agreement between the parties), or if it is proven to have fulfilled these functions by itself or with additional evidence.

An Electronic Signature is "reliable" if:

• The signature creation data are, in the context used, linked to the signatory and to no one else;
• The signature creation data were, at the time of signing, under the signatory’s control and no one else’s;
• Any changes to the electronic signature after signing can be detected; and
• If the legal requirement for a signature is to ensure the integrity of the information, any changes to that information after signing can be detected.

As noted above, only electronic signatures that are "valid" (and thus also "reliable") under the ADGM Electronic Transactions Regulations are treated the same as handwritten signatures. Unlike the UAE Electronic Transactions Law, the ADGM regulations do not require electronic signatures to be issued by, or give special status to, providers authorized by the TDRA.

The DIFC Electronic Transactions Law defines an electronic signature as an "electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record."

According to the DIFC Electronic Transactions Law, an electronic signature is "valid" if it is considered to identify the relevant person and show their intention regarding the information in the electronic record, provided that the electronic signature is:

• as reliable as appropriate for the purpose for which the document or record was created or sent, considering all circumstances, including any relevant agreement; or
• proven to have fulfilled these functions, either alone or with further evidence.

Additionally, an electronic signature is attributed to a person if it was their act. This can be shown in any way, including by demonstrating the effectiveness of any security procedure used to identify the person to whom the electronic record or signature is attributed. The effect of an electronic signature attributed to a person is determined by the context and circumstances at the time of its creation, execution, or adoption, including any agreement between the parties, and as otherwise provided by law.

Unlike the UAE Electronic Transactions Law, the DIFC Electronic Transactions Law does not require electronic signatures to be issued by, or give special status to, providers authorized by the TDRA.

The Electronic Transactions Laws do not specifically prohibit the use of electronic signatures for any particular types of documents or transactions. However, some government ministries may still require handwritten signatures for certain forms or documents submitted to them.

Because of the current uncertainties in the Electronic Transaction Laws, it is advisable to exercise caution before using electronic signatures for high-value or business-critical agreements—even if the agreements state that electronic execution is valid and binding.

Onshore UAE

As mentioned above, the UAE Electronic Signatures Law and its Executive Regulations are only available in Arabic. This guidance will be updated once official English translations are released.

ADGM

The ADGM Electronic Transactions Regulations specifically allow for the recognition of electronic signatures that are created, issued, used, or performed outside the ADGM or UAE.

DIFC

None.

There are no statutory penalties for using electronic signatures in the UAE (including ADGM and DIFC). However, if electronic signatures do not comply with the relevant laws, the signed documents may not be recognized as validly executed.

Except for the ADGM and DIFC, the UAE does not have a unified system of court reporting or judicial precedent. To our knowledge, there are no published cases regarding the Electronic Transactions Laws.