Draft Confidentiality Agreement in the UAE
A confidentiality agreement establishes how sensitive information may be accessed, used, stored, and disclosed between parties. It can be used in employment relationships, consultancy arrangements, commercial negotiations, investment discussions, supplier relationships, and other situations in which confidential information must be shared.
The agreement should define what information is protected, identify the permitted purpose for using it, establish who may receive it, and explain what happens when the relationship ends.
A confidentiality agreement should not simply label all information as confidential. The drafting should reflect the actual information being exchanged and the commercial interest that requires protection.
Abdulrahman Alshaali Advocates & Legal Consultants assists businesses, employers, consultants, investors, and individuals with preparing and reviewing confidentiality agreements under UAE law.
Confidentiality Agreements Under UAE Law
Federal Law No. 11 of 2021 on the Regulation and Protection of Industrial Property Rights provides statutory protection for qualifying undisclosed information.
Article 61 establishes conditions for protection. The information must be secret, have commercial value because of its secrecy, and be subject to reasonable measures taken by its lawful controller to preserve confidentiality.
Article 63 requires the lawful controller of protected undisclosed information to take appropriate precautions to preserve secrecy and restrict circulation to authorised persons.
Cabinet Resolution No. 6 of 2022, which issues the Executive Regulations of the law, provides additional measures concerning the protection of undisclosed information.
Article 71 addresses protective measures including restrictions on access and confidentiality obligations in relevant employment and third-party business arrangements.
These provisions are particularly relevant where a confidentiality agreement protects commercially valuable information that meets the statutory conditions.
However, contractual confidentiality can also extend to information that the parties agree to protect even where it does not necessarily qualify as protected undisclosed information under industrial property legislation.
The agreement should therefore distinguish the contractual obligations between the parties from any additional statutory protection that may apply.
When Is a Confidentiality Agreement Appropriate?
A confidentiality agreement may be appropriate whenever one party needs to provide sensitive information to another for a defined purpose.
Common examples include:
- Commercial negotiations.
- Investment discussions.
- Consultancy engagements.
- Supplier or manufacturer appointments.
- Employment relationships.
- Business acquisitions.
- Joint ventures.
- Technology projects.
- Outsourcing arrangements.
- Access to internal business records.
For example, a company considering appointing a new supplier may need to disclose pricing structures and product specifications.
The supplier may require that information to prepare a proposal but should not automatically be entitled to use it for another commercial purpose.
A confidentiality agreement can establish the permitted use before the information is disclosed.
The timing is important.
Where possible, confidentiality obligations should be agreed before sensitive information is shared rather than after disclosure has already occurred.
Confidentiality Agreement and NDA: Are They the Same?
The terms confidentiality agreement and non-disclosure agreement are often used to describe similar types of contractual protection.
However, the structure and purpose of the document may differ depending on the relationship.
A draft nda agreement may focus principally on information exchanged during a proposed transaction or negotiation.
A broader confidentiality agreement may form part of an ongoing commercial or professional relationship and address continuing obligations over a longer period.
For example, two companies discussing a potential acquisition may sign an NDA before due diligence begins.
A consultant appointed for several years may instead be subject to a wider confidentiality agreement covering information accessed throughout the engagement.
The appropriate title is less important than the substance of the obligations.
The agreement should define the information, permitted use, authorised recipients, and duration in a way that reflects the actual relationship.
Defining Confidential Information Clearly
The definition of confidential information determines the scope of the agreement.
It should be broad enough to protect genuinely sensitive material without making every piece of information exchanged between the parties confidential automatically.
Depending on the relationship, protected information may include:
- Financial statements.
- Business plans.
- Pricing information.
- Customer and supplier lists.
- Marketing strategies.
- Product specifications.
- Technical drawings.
- Software information.
- Internal procedures.
- Trade secrets.
- Research and development.
- Investment information.
- Unpublished commercial proposals.
The agreement should also address the form in which information is disclosed.
Confidential information may be provided:
- In writing.
- Electronically.
- Orally.
- Visually.
- Through access to premises or systems.
- During meetings or demonstrations.
For example, a manufacturer may observe a proprietary production method during a site visit without receiving a written document.
If the parties intend the observed process to be protected, the definition should address that type of disclosure.
Information That Should Be Excluded from Confidentiality Restrictions
A confidentiality agreement should recognise that some information may fall outside the intended restrictions.
Typical exceptions may include information that:
- Was publicly available when disclosed.
- Becomes public without breach of the agreement.
- Was already lawfully known to the receiving party.
- Is obtained lawfully from another source.
- Is independently developed without using protected information.
- Must be disclosed under applicable law or a lawful order.
These exceptions should be drafted carefully.
For example, information should not automatically lose protection merely because part of it becomes publicly available.
A combination of information may still retain commercial value where the particular arrangement remains secret.
The agreement may also require the receiving party to demonstrate that an exception applies where appropriate.
The objective is to protect genuinely confidential material without creating unnecessary restrictions over information that is lawfully available elsewhere.
Restricting the Use of Confidential Information
A confidentiality agreement should address how protected information may be used.
Preventing disclosure alone may not be enough.
A party can misuse information without sharing it with anyone else.
For example, a consultant may receive confidential customer pricing information to advise on a project.
The consultant may keep the information private but use it later to assist another business competing with the client.
A properly drafted agreement can restrict use to a defined purpose.
This purpose might be:
- Evaluating a proposed investment.
- Performing agreed consultancy services.
- Preparing a commercial proposal.
- Conducting due diligence.
- Supplying specified products.
- Performing an employment role.
The agreement should not grant broader commercial rights merely because information is being disclosed.
Access to confidential material does not automatically transfer ownership or create a licence to exploit it for another purpose.
Controlling Who May Access Confidential Information
Commercial information is often shared with more than one person.
A company receiving confidential information may need to involve:
- Employees.
- Directors.
- Accountants.
- Lawyers.
- Consultants.
- Subcontractors.
- Other professional advisers.
The agreement should identify who may receive the information and under what conditions.
For example, an investor may need to share financial information with professional advisers carrying out due diligence.
The agreement may allow this disclosure provided that the advisers genuinely require access and are subject to appropriate confidentiality obligations.
Article 63 of Federal Law No. 11 of 2021 requires lawful controllers of protected undisclosed information to organise and restrict its circulation to authorised persons.
The agreement should therefore support appropriate access controls rather than allowing unrestricted internal distribution.
The receiving party may also be required to take responsibility for disclosure by authorised representatives where appropriate.
Confidentiality Obligations for Employees
Employees frequently receive access to commercially sensitive information during their work.
This may include:
- Customer records.
- Pricing information.
- Business strategies.
- Technical information.
- Financial information.
- Proprietary processes.
- Internal databases.
Article 71 of Cabinet Resolution No. 6 of 2022 contemplates confidentiality protections in relevant employment arrangements where protected undisclosed information is involved.
Employers may therefore include confidentiality provisions in employment documentation or use a separate confidentiality agreement where appropriate.
A draft employment contract or Draft Employment Agreement may incorporate obligations addressing the employee’s use of business information.
The agreement should distinguish confidentiality restrictions from non-compete obligations.
An employee may remain prohibited from disclosing protected information even where they are free to work for another business after employment ends.
A Non-Compete Agreement Draft addresses a different type of restriction and should be considered separately.
Confidentiality Obligations for Consultants and Contractors
Consultants and contractors may receive access to sensitive information while performing services.
The agreement should establish how they may use that information and whether they may share it with their own employees or subcontractors.
For example, a technology consultant may receive administrator-level access to a client’s systems.
The confidentiality agreement should address:
- Access to system information.
- Use of client data.
- Disclosure to subcontractors.
- Storage of documents.
- Return or deletion after completion.
- Continuing obligations after termination.
Where the engagement is broader, a draft consulting services agreement or Draft Service Agreement should coordinate these confidentiality obligations with the consultant’s wider contractual responsibilities.
The agreements should not contain inconsistent rules concerning information handling.
Protecting Customer and Supplier Information
Customer and supplier relationships may represent significant commercial value.
A business may therefore seek to protect information such as:
- Customer identities.
- Contact details.
- Pricing arrangements.
- Purchase histories.
- Negotiated discounts.
- Supplier terms.
- Procurement strategies.
Not all customer or supplier information automatically qualifies as a trade secret.
Its legal protection depends on the nature of the information and the circumstances.
However, a confidentiality agreement can establish contractual restrictions concerning identified information that the parties intend to protect.
For example, a distributor may receive access to a manufacturer’s customer pricing data solely for managing a specific territory.
The agreement may prohibit using that information to approach customers for another competing business.
Where the information contains personal data, additional privacy and data-protection requirements may also need to be considered separately.
Confidentiality and Intellectual Property
Confidential information and intellectual property are related but distinct concepts.
A party may disclose intellectual property without transferring ownership.
For example, a company may provide software documentation, product designs, or technical drawings to a contractor.
The confidentiality agreement may restrict use and disclosure of those materials.
However, it should not be assumed that the agreement itself determines ownership of every underlying intellectual property right.
The relevant commercial agreement should address ownership and licensing separately where necessary.
For example, if a consultant creates new technical materials while using the client’s confidential information, the parties may need separate provisions addressing who owns the resulting work.
The confidentiality agreement should therefore protect secrecy without confusing confidentiality with ownership.
How Long Should Confidentiality Obligations Continue?
The appropriate duration depends on the nature of the information.
Some information may lose commercial value quickly.
Other information may remain sensitive for many years.
For example, a proposed transaction price may cease to be commercially sensitive after a deal becomes public.
A proprietary manufacturing process may remain valuable as long as it remains secret.
The agreement may therefore apply different periods to different categories of information where appropriate.
The parties should also distinguish the term of the commercial relationship from the duration of confidentiality obligations.
An agreement may terminate while confidentiality obligations concerning previously disclosed information continue.
Where information qualifies for statutory protection as undisclosed information, protection depends on continued satisfaction of the statutory conditions, including secrecy and reasonable protective measures.
A fixed contractual period should therefore not be assumed to determine the entire lifespan of every statutory right.
Returning and Deleting Confidential Information
When the relationship ends, the disclosing party may require protected materials to be returned or deleted.
The agreement should address:
- Physical documents.
- Electronic files.
- Copies.
- Backup records.
- Information held by authorised representatives.
- Access credentials.
- Confidential materials stored on personal devices.
For example, a consultant completing a project may hold copies of internal reports and technical documents.
The client may require those materials to be returned or permanently deleted.
However, certain information may need to be retained for legal, regulatory, professional, or legitimate record-keeping purposes.
The agreement should distinguish permitted retention from unrestricted continued use.
Any retained confidential information should remain subject to applicable confidentiality obligations where appropriate.
Handling Legally Required Disclosure
A confidentiality agreement cannot prevent a party from complying with mandatory legal obligations.
A court, regulator, or other competent authority may require disclosure of information.
The agreement should establish an appropriate procedure for these circumstances.
Where legally permitted, the receiving party may be required to:
- Notify the disclosing party.
- Disclose only the information legally required.
- Cooperate with reasonable protective measures.
- Preserve confidentiality over information not required to be disclosed.
For example, a company may receive a lawful regulatory request for documents containing another party’s confidential information.
The company cannot simply refuse to comply because of the confidentiality agreement.
The agreement should instead provide a practical process for dealing with compulsory disclosure.
Any notification requirement should remain subject to situations in which the law prohibits advance notice.
Security Measures for Confidential Information
Contractual confidentiality should be supported by practical security measures.
Federal Law No. 11 of 2021 requires reasonable measures to preserve the secrecy of qualifying undisclosed information.
Depending on the sensitivity of the material, reasonable measures may include:
- Restricting access to authorised personnel.
- Password protection.
- Secure document storage.
- Access logs.
- Controlled data rooms.
- Confidentiality notices.
- Restrictions on copying.
- Secure disposal procedures.
The agreement may require the receiving party to maintain safeguards proportionate to the nature of the information.
For example, highly sensitive technical documentation should not be made available to every employee simply because the receiving company has signed a confidentiality agreement.
Contractual protection and practical information-security procedures should operate together.
Failure to take reasonable protective measures may also affect whether information qualifies for statutory protection as undisclosed information.
Confidentiality in Due Diligence and Investment Transactions
Investment and acquisition transactions frequently require extensive disclosure of sensitive information.
Potential investors may need access to:
- Financial statements.
- Customer contracts.
- Employee information.
- Intellectual property.
- Litigation information.
- Supplier arrangements.
- Business forecasts.
The disclosing company may provide this information through a controlled data room.
A confidentiality agreement can establish who may access the materials and how they may be used.
For example, information may be disclosed solely for evaluating a proposed Draft Investment Agreement.
If the transaction does not proceed, the investor should not automatically be entitled to retain and use the information for another commercial purpose.
The agreement may also restrict contact with customers, employees, or suppliers where such restrictions are legally appropriate and commercially justified.
Confidentiality in Negotiations Between Companies
Two companies may exchange sensitive information before deciding whether to enter into a commercial relationship.
For example, a supplier and distributor may discuss pricing, customers, territories, and operational strategies before signing a final agreement.
A Draft Agreement Between Two Companies may later govern the commercial relationship.
The confidentiality agreement should address the information exchanged before that final contract is signed.
It may also clarify that disclosure does not create an obligation to complete the proposed transaction.
This can be important where negotiations involve extensive information exchange but either party remains free to discontinue discussions.
The agreement should therefore distinguish confidentiality obligations from any obligation to proceed with the underlying deal.
Remedies for Breach of Confidentiality
A confidentiality breach may arise where protected information is disclosed or used outside the agreed purpose.
The available legal remedies depend on:
- The agreement.
- The nature of the information.
- The conduct involved.
- The loss suffered.
- Any statutory protection applicable to the information.
Where information qualifies as protected undisclosed information under Federal Law No. 11 of 2021, the statutory framework may provide additional protection against unlawful acquisition, use, or disclosure.
A contractual breach may also give rise to remedies under the law governing contractual obligations.
The agreement may establish procedures for responding to a suspected breach.
These can include prompt notification and reasonable measures to prevent further dissemination.
However, parties should not assume that any contractual compensation figure or remedy will automatically be applied exactly as drafted regardless of applicable law and the circumstances.
A Practical Example: Confidential Information Shared with a Contractor
Consider a UAE company appointing an external contractor to help develop a new product.
The contractor receives technical drawings, pricing information, supplier details, and access to internal product-development meetings.
The contract includes only a short sentence requiring the contractor to “keep company information confidential.”
After the project ends, the contractor begins advising another business in the same sector.
A dispute arises over whether the contractor may use knowledge gained during the project.
A more carefully prepared confidentiality agreement could have defined the protected information, identified the permitted project purpose, established access controls, and addressed the use of information after the engagement ended.
It could also have distinguished confidential company information from the contractor’s general professional skills and experience.
The example demonstrates why confidentiality provisions should define obligations rather than rely on a broad statement requiring secrecy.
Documents Required to Draft a Confidentiality Agreement
The information required depends on the relationship and the material being protected.
Relevant documents and details may include:
- Identification or corporate documents of the parties.
- Description of the proposed relationship.
- Categories of confidential information.
- Existing contracts affecting the information.
- Details of authorised recipients.
- Existing confidentiality obligations.
- Intellectual property information.
- Information-security requirements.
- Relevant employment or consultancy documents.
- Proposed duration of confidentiality obligations.
Where information belongs to a third party, the disclosing party should also establish whether it is authorised to provide that information.
The drafting process should identify the actual confidentiality risks rather than relying on a generic form.
Confidentiality Agreement Drafting Assistance from Abdulrahman Alshaali Advocates & Legal Consultants
A confidentiality agreement should reflect the information being protected, the reason it is being disclosed, and the relationship between the parties.
Abdulrahman Alshaali Advocates & Legal Consultants assists companies, employers, consultants, investors, and individuals with preparing and reviewing confidentiality agreements under UAE law.
Our services may include defining confidential information, developing permitted-use restrictions, establishing disclosure controls, reviewing continuing obligations, and coordinating confidentiality provisions with wider commercial agreements.
Where confidential information is being exchanged before a proposed transaction, a draft nda agreement may also be appropriate.
Clients seeking broader contractual assistance can explore our contract drafting services.
We assist clients in developing confidentiality arrangements appropriate to their commercial relationships and the applicable UAE legal framework.
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Request Assistance with Your Draft Confidentiality Agreement
Whether you are sharing commercially sensitive information with an employee, consultant, investor, supplier, or potential business partner, the agreement should clearly establish how that information may be used and protected.
Abdulrahman Alshaali Advocates & Legal Consultants assists clients with preparing and reviewing confidentiality agreements under UAE law.
Contact our team to discuss the information requiring protection and the contractual arrangements appropriate to your relationship.
Frequently Asked Questions
Can a Confidentiality Agreement Protect Information That Is Not a Trade Secret?
Yes. Parties may contractually agree to protect information even where it does not satisfy every statutory requirement for protection as undisclosed information.
The agreement should define the information clearly and establish the relevant contractual obligations.
Statutory trade-secret-style protection and contractual confidentiality are related but separate forms of protection.
Can Confidentiality Obligations Continue After the Main Contract Ends?
Yes. A confidentiality agreement may provide that specified obligations continue after termination or expiry of the main commercial relationship.
The appropriate duration depends on the nature of the information and applicable law.
Parties should avoid assuming that every category of information requires the same protection period.
Can a Receiving Party Share Confidential Information with Its Lawyers or Accountants?
The agreement may permit disclosure to professional advisers who genuinely require the information for the authorised purpose.
The wording should identify the permitted recipients and establish appropriate confidentiality safeguards.
The receiving party should not assume that every external adviser or consultant may access the information automatically.
Can Information Lose Its Confidential Status?
Yes. Information may cease to qualify for particular contractual or statutory protection where, for example, it lawfully enters the public domain or otherwise falls within an agreed exception.
For statutory undisclosed information, continued protection depends on the legal conditions remaining satisfied.
The treatment of information should therefore be assessed according to the agreement and the circumstances in which its status changes.
Sources
Federal Law No. 11 of 2021 on the Regulation and Protection of Industrial Property Rights.
UAE Legislation Platform – Official Legislation
Cabinet Resolution No. 6 of 2022 Concerning the Executive Regulations of Federal Law No. 11 of 2021 on the Regulation and Protection of Industrial Property Rights.
