Dubai Court Sets Precedent by Recognising Crypto as Valid Salary Payment

The Dubai Court of First Instance has ruled that salary payments in cryptocurrency are valid under employment contracts. This decision marks a notable shift from the court's previous stance in 2023, which had rejected a similar claim due to unclear valuation of the cryptocurrency.

The recent case, numbered 1739 of 2024, involved an employee who sued for unpaid wages, wrongful termination compensation, and other benefits. The employment contract specified a salary in fiat currency and 5,250 EcoWatt tokens. The dispute arose when the employer failed to pay the token portion over six months.

Previous and Current Judgments

In 2023, the court had acknowledged the inclusion of EcoWatt tokens in the contract but did not enforce payment in cryptocurrency due to a lack of clear valuation methods. This ruling adhered to a traditional viewpoint, requiring concrete evidence for unconventional payment forms.

However, the 2024 ruling represents a significant change. The court ordered the employer to pay the crypto portion of the salary as per the contract, without converting it into fiat currency. Irina Heaver of NeosLegal described this as a “progressive approach,” reflecting the court’s recognition of the evolving nature of financial transactions.

Legal and Economic Implications

Heaver noted that the decision demonstrates a broader acceptance of cryptocurrency in employment contracts and highlights the court’s alignment with the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021. This consistent application of legal principles supports the integration of digital currencies into the UAE’s financial system.

Future Outlook

The ruling sets a positive precedent for the adoption of digital currencies in everyday transactions, fostering a more innovative and inclusive business environment in the UAE. Heaver emphasised that this decision ensures that both companies and employees must honour contract terms, whether in fiat or cryptocurrency.