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A counterclaim is a claim the defendant files back against the claimant inside the same case, instead of starting a separate lawsuit. UAE courts allow it where the counterclaim is connected to the original dispute — for example, a contractor sued for defects counterclaims for unpaid invoices, or a tenant sued for rent counterclaims for the deposit. It matters because both claims are heard by the same judge on the same evidence, which saves time and court fees and prevents inconsistent judgments. It also changes settlement dynamics: a claimant facing a substantial counterclaim often negotiates differently. You meet it in commercial, construction, employment and rental disputes, where it is routine. Procedurally it is filed as part of the defence stage, and the court rules on both the original claim and the counterclaim in a single judgment.