In a groundbreaking decision, a United Arab Emirates court has officially recognized cryptocurrencies as a valid method for salary payments, marking a significant milestone for employment contracts in the region. The Dubai Court of First Instance’s ruling highlights the increasing adoption of digital assets in the UAE, setting a precedent for future cases.
Crypto as Salary Payment
The case involved a plaintiff who sued their former employer for wrongful termination and unpaid wages. The plaintiff sought compensation, including unpaid salaries and other employment benefits. The employment contract had specified a monthly salary in United Arab Emirates Dirham (AED) and an additional 5,250 EcoWatt tokens (EWT). EcoWatt is a cryptocurrency project that combines renewable energy with blockchain technology to address global climate issues.
Central to the lawsuit was the defendant’s failure to pay the agreed-upon EWT tokens for six months. The court recognized the legitimacy of the crypto payment and ruled in favor of the plaintiff. It ordered the defendant to fulfill the wage payment in EWT as outlined in the employment contract, rather than converting the value to fiat currency.
“As the respondent did not provide evidence of payment of the claimant’s salary for the claimed period, and since the documents were void of such evidence, the court orders the respondent to pay the claimant [redacted] AED in addition to [redacted] EcoWatt tokens,” stated the court.
Growing Acceptance of Crypto
This ruling contrasts sharply with a decision made by the same Dubai Court of First Instance last year. In that case, the court took a more traditional stance against employee remuneration in cryptocurrencies. The case also involved unpaid wages in EcoWatt tokens, but the court ruled in favor of the defendant because the plaintiff failed to provide a specific valuation of the cryptocurrencies in fiat.
While the court acknowledged the existence of EWT in the employment contract, it did not require the employer to pay the plaintiff the tokens.
“As the claimant did not provide evidence of the value of the digital currency (EcoWatt tokens), the court disregards it, since the respondent did not provide opposing evidence or any defense, and therefore, the court concludes that the duration of the claimant’s service was [redacted] and that the gross and basic salary was [redacted] AED, and the court rules in the case accordingly,” the court ruled in the earlier case.
The recent decision by the Dubai Court of First Instance reflects a growing acceptance of cryptocurrencies in the region, moving beyond traditional approaches and recognizing the evolving landscape of digital assets.
