UAE: Arbitration

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This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in UAE.

This Q&A is part of the global guide to Arbitration.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/

  1. What legislation applies to arbitration? Are there any mandatory laws?

    The legislation which applies to an arbitration is dependent on whether the arbitration is governed by the laws of the United Arab Emirates (“UAE”), or by the laws of distinct jurisdictions such as the Dubai International Financial Centre (“DIFC”) or the Abu Dhabi Global Market (“ADGM”), generally understood as “Off-Shore Jurisdictions”), all of which have their own arbitration laws.

    UAE
    Articles 203 to 218 of Federal Law No. 11/192 (the “UAE CPC”) are relevant to arbitration.
    Off-Shore Jurisdictions

    Dubai
    DIFC Law (No. 1 of 2008, as amended by DIFC Law no. 6 of 2013) (the “DIFC Arbitration Law”), governs arbitral disputes which are subject to the jurisdiction of the DIFC.

    The amendment to the DIFC Law No. 1 of 2008 clarified the DIFC Court’s authority to dismiss or stay an action brought before the court (which is also subject to an arbitration agreement) unless it finds ‘that the arbitration agreement is null and void, inoperative or incapable of being performed’’ even where the seat of the arbitration is one other than the DIFC and where no seat has been designated or determined.

    Abu Dhabi
    The ADGM announced the establishment of an arbitration hearing centre (the “ADGM Arbitration Centre”) on Al Maryah Island by early 2018.

    The ADGM Arbitration Regulations 2015 (“ADGM Regulations”), based on the UNCITRAL Model Law will govern arbitrations where the:

    seat of the arbitration is the ADGM; or

    arbitration agreement applies the ADGM Regulations.

    The Judicial Tribunal for the Dubai Courts and the DIFC Courts
    Decree no. 19 of 2016 established the Judicial Tribunal for the Dubai Courts and the DIFC Courts (the “Judicial Tribunal”). The Judicial Tribunal was established to deal with issues including conflicts of jurisdiction between the DIFC and Dubai Courts.

    A limited number of decisions have been issued by the Judicial Tribunal to date. These decisions generally indicate that for arbitration proceedings that are seated in mainland Dubai, the Dubai (Federal) Courts would have curial jurisdiction, whereas the curial jurisdiction of the DIFC Courts would be limited to those arbitration proceedings seated in the DIFC.

  2. Is the country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?

    The UAE is a signatory to the New York Convention since 2006 with no reservations to the general conditions of this convention.

  3. What other arbitration-related treaties and conventions is the country a party to?

    Conventions
    The two most relevant conventions to which the UAE is a party, are the:

    Riyadh Arab Agreement for Judicial Cooperation between States of the Arab League (1983) (the “Riyadh Convention”); and

    GCC Convention for the Execution of Judgements, Delegations and Judicial Notifications (1996) (the “GCC Convention”).

    These above conventions may be more relevant, when attempting to enforce an arbitral award in country-members of the Riyadh Convention, where the New York Convention does not apply, for example Iraq and Yemen.

    Memorandums of Understanding
    The 2009 Memorandum of Understanding between the Dubai Courts and the DIFC Courts (the “2009 MOU”).

    The 2009 MOU promoted the discussion of issues of mutual interest including the formation of joint working groups (such as a committee to ‘develop recommendations and protocols concerning matters such as service of documents between the courts, enforcement of orders between the courts and resolution of jurisdictional questions that might arise between the courts’), ‘technical assistance, cooperation and information sharing and training’.

    The 2009 MOU’s relevance to arbitration may arise for instance when an international award is recognised by the DIFC Courts and then enforced in mainland Dubai, through the Dubai (Federal ) Courts.

  4. Is the law governing international arbitration based on the UNCITRAL Model Law? Are there significant differences between the two?

    UAE
    The articles of the UAE CPC which relate to arbitration, are not based on the UNCITRAL Model Law.

    These differences mainly relate to procedural aspects, violation of which has in the past been shown to lead to nullification of otherwise valid arbitral awards. Examples include the warranty of authority that a party-representative needs to formally demonstrate (usually through a notarised Power of Attorney), as well the requirement for witnesses to be sworn on oath before their evidence can be formally accepted.

    Off-Shore Jurisdictions
    The DIFC Arbitration Law and the ADGM Regulations are both based on the UNCITRAL Model Law.

  5. Are there any impending plans to reform the arbitration laws?

    A new, UNCITRAL-based UAE Federal arbitration law has for a number of years been in the process of being considered for ministerial approval.

    This proposed new law will in all likelihood repeal those articles within the UAE CPC which relate to arbitration.

  6. What arbitral institutions (if any) exist? Have there been any amendments to their rules or are there any being considered?

    UAE
    The main On-Shore arbitral institutions, in order of case volume, are the:

    Dubai International Arbitration Centre (“DIAC”), which applies the DIAC Rules (2007) (the “DIAC Rules”); and

    Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”), which applies the Procedural Regulations of Arbitration (the “ADCCAC Rules”).

    There exists, within the remaining Emirates, a number of other arbitration centres, for example in:

    Ras Al Khaimah: The Ras Al Khaimah Centre of Reconciliation and Commercial Arbitration;

    Ajman: The Ajam Centre for Commercial Conciliation and Arbitration; and

    Sharjah: The Tahkeem Sharjah International Arbitration Centre.

    UAE Off-Shore Jurisdictions
    The Dubai International Financial Centre / London Court of International Arbitration Centre (“DIFC-LCIA Arbitration Centre”) which applies the DIFC-LCIA Arbitration Rules 2016 (the “DIFC-LCIA Arbitration Rules”).

    Amendments to Institutional Rules
    The DIAC has proposed rules, intended to replace the current DIAC Rules. These rules propose:

    procedures for appointing an emergency arbitrator; and

    expedited arbitration procedures.

  7. What are the validity requirements for an arbitration agreement?

    UAE
    Article 203 of the UAE CPC requires that for an arbitration agreement to be valid it must be in writing and specified.

    The signatories to the agreement must also have the authority to bind the respective party to undertaking arbitral proceedings and the dispute must be arbitrable.

    Specified
    It is in practice accepted by UAE jurisprudence that an arbitration clause encompassing all disputes that may arise from or be related to the underlying contract is valid.

    The need to specify the dispute arises only in instances where the arbitration agreement is entered into after a given dispute has arisen.

    Authority to Bind
    The accepted position under UAE law is that only the person referred to as “General Manager” in an entity’s trade licence or failing that, any other person empowered by the General Manager through a duly notarised Power of Attorney, would have presumed competence to bind the entity he or she represents to arbitration and to do so to the exclusion of litigation.

    Arbitrable
    Commercial disputes that relate to the registration of real estate, insurance policies and commercial agencies are generally not arbitrable, although there are exceptions and qualifications to the above position.

    UAE Off-Shore Jurisdictions
    The DIFC Arbitration Law (Article 12) and the ADGM Regulations (Regulation 13) broadly require that the Arbitration Agreement be in writing.

  8. Are arbitration clauses considered separable from the main contract?

    It is widely accepted in the UAE that defects in a contract, even those rendering it unenforceable, will not undermine the application of an arbitration agreement therein, provided that the voidness of the contract does not extend to the arbitration clause itself.

    The DIFC Arbitration Law (Article 23), ADGM Regulations (Regulation 14), DIFC-LCIA Arbitration Rules (Article 23) and the DIAC Rules (Article 6) recognizes the principle of separating the arbitration agreement / clause from the underlying contract.

  9. Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?

    There is no express guidance under the UAE CPC, DIFC Arbitration Law, DIAC Rules or DIFC-LCIA Arbitration Rules which addresses the issue of consolidating multi-contract arbitrations.

    Where however there are multiple claims, submitted to arbitration under more than one contract, most arbitral institutions will consider applications for their consolidation of arbitral proceedings which are within their jurisdiction.

    The ADGM Regulations (Regulation 35) however provides for the consolidation of other arbitral proceedings or concurrent hearings.

  10. How is the law applicable to the substance determined?

    The applicable law is normally stated within the underlying contract. Where it is not however, the following applies:

    UAE
    The DIAC Rules (Article 33) provide for an Arbitral Tribunal to decide on the rule of law which the Arbitral Tribunal considers as most appropriate to be applied. Any designation of the law of a given state shall be construed (unless expressly stated otherwise) as the applicable law.

    The Arbitral Tribunal shall, in all cases, take into consideration the terms of the contract and trade usage applicable when deciding on the applicable law.

    UAE Off-Shore Jurisdictions
    The DIFC Arbitration Law (Article 35) provides that ‘Any designation of the law or legal system of a given State or jurisdiction shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State or jurisdiction and not to its conflict of laws rules’.

    In the absence of such designation, the Arbitral Tribunal shall apply the law as determined by the conflict of law rules which the Arbitral Tribunal considers applicable, ‘provided that the parties shall be free to agree in writing that the Arbitral Tribunal may apply the law or rules of law which it considers to be most appropriate in the facts and circumstances of the dispute’.

    In all cases, the Arbitral Tribunal will apply the principles of equity and good conscience, only if the parties have authorised the Arbitral Tribunal to do so.

    The Arbitral Tribunal will take into account the terms of the contract and the trade usages applicable.

  11. Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?

    Commercial disputes which relate to the registration of real estate, insurance policies and commercial agencies are generally not arbitrable.

    The arbitrability of each dispute will however be considered on its own merits.

  12. Are there any restrictions in the appointment of arbitrators?

    There are restrictions in the appointment of an arbitrator, pursuant to Article 206(1) of the UAE CPC:

    "An arbitrator may not be a minor, a legal incompetent, a person deprived of his civil rights for reason of a criminal sentence, or a bankrupt, unless his status is restored’"

    The UAE CPC Article 206(2) provides for an odd number of arbitrators should more than one arbitrator be required.

    In addition to the criteria for potential arbitrators which may be set out in the arbitration agreement / clause, the DIAC Rules (Article 9) and DIFC-LCIA Arbitration Rules (Article 5) make further reference to the ongoing requirement that the arbitrators remain independent and impartial for the duration of the arbitral proceedings.

  13. Are there any default requirements as to the selection of a tribunal?

    There are no default requirements other than those set out at Article 206 of the UAE CPC.

    The DIFC Arbitration Law (Article 17) provides for selection criteria where there is no agreement on the procedure for the appointment of arbitrators.

    The DIAC Rules (Article 9) and the DIFC-LCIA Arbitration Rules (Article 5) require that arbitrators remain independent and impartial.

  14. Can the local courts intervene in the selection of arbitrators? If so, how?

    UAE
    In non-institutional arbitration proceedings, the UAE Courts, pursuant to article 204 of the UAE CPC, may intervene to assist with the constitution of an Arbitral Tribunal. It may do so where an arbitrator or arbitrators have not been agreed, or where the agreed arbitrator(s), refuses to act, has been discharged, cannot act, or there is a ruling rejecting his / her appointment and there is no agreement between the parties on how to address such an eventuality.

    UAE Off-Shore Jurisdictions
    DIFC Arbitration Law
    A party may request the DIFC Court of First Instance to intervene where there has been a failure on behalf of the parties, the arbitrators or third parties (including the relevant arbitral institution) to validly constitute an Arbitral Tribunal (Article 17).

  15. Can the appointment of an arbitrator be challenged? What is the procedure for such challenge? Has there been an increase in number of challenges in your jurisdiction?

    UAE
    The UAE CPC (Article 207) and the DIAC Rules (Article 13) both provide for the challenging of an arbitrator’s position.

    The Court should, pursuant to Article 207 of the UAE CPC, examine any request to reject the arbitrator that must be made within 5 days from notifying the opposing party of the appointment, or from the date the ‘reason for rejection occurred or came to the knowledge’ of the challenging party after the arbitrator’s appointment.

    UAE Off-Shore Jurisdictions
    The appointment of an arbitrator can be challenged pursuant to DIFC Arbitration Law (Article 18) on the grounds he / she is not independent, impartial or does not possess the qualifications agreed upon by the parties.

    A party challenging the arbitrator’s position, must write to the LCIA Court, Arbitral Tribunal and all other parties within 14 days of the formation of the Arbitral Tribunal or becoming aware of the grounds for removal of the arbitrator. Should all other parties agree with the challenge brought, the arbitrator’s appointment shall be revoked by the LCIA Court.

    If the arbitrator does not resign or the parties do not agree to the removal of the arbitrator, the LCIA Court shall issue its decision upon the challenge (Article 10 of the DIFC-LCIA Arbitration Rules).

  16. What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?

    UAE
    Article 212 of the UAE CPC confirms that as long as the majority of the Arbitral Tribunal sign the award, it will be considered as validly issued. The absence of any arbitrator’s signature must however be recorded within the body of the Arbitral Award.

    Alternatively, the DIAC Rules (Article 15) provide for the revocation of appointment of the absent arbitrator and appointment of a replacement thereof (Article 14).

    The above procedures do not however cater for the risk that the arbitrator is not replaced and remaining arbitrators cannot reach a consensus on liability or quantum.

    UAE Off-Shore Jurisdictions
    The Arbitral Tribunal, on permission of the LCIA Court, may continue proceedings and issue an arbitral award. Alternatively, in the event that the remaining arbitrators do not wish to continue, the LICA Court may direct for the revocation of the delinquent arbitrator’s appointment and the replacement thereof (Articles 10 to 12 of the DIFC-LCIA Arbitration Rules).

  17. Are arbitrators immune from liability?

    UAE
    An English translation of the recent amendment to Article 257 of the UAE's Federal Law No. 3 of 1987 by Federal Decree Law No. 7 of 2016 (the “Penal Code”) provides that:

    ‘Temporary imprisonment shall be inflicted on whoever issues a decision or expresses an opinion or submits a report or presents a case or proves an incident, in favour of a person or against him, contrary to the duty of fairness and unbiasedness, in his capacity as an arbitrator, expert, translator or investigator who is appointed by a judicial or an administrative authority or elected by the parties.’

    The introduction of the above caused significant concern amongst the arbitration community, with both experts and arbitrators rejecting potential appointments.

    The concern within the arbitration market has however subsided, assisted by the fact that no arrests nor convictions of either arbitrators or experts have occurred since the promulgation of the above amendment.

    DIAC
    The DIAC Rules (Article 40) provides for immunity for any act or omission in connection with the arbitration, by an arbitrator. The terms of reference, should the be produced, normally limit a tribunal’s liability to acts of bad faith.

    UAE Off-Shore Jurisdictions
    DIFC Arbitration Law (Article 22) provides that an arbitrator will only be liable for his / her acts or omissions where such have caused ‘damage by conscious and deliberate wrongdoing’.

  18. Is the principle of competence-competence recognised? What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?

    UAE
    Although the DIAC Rules (Article 6), expressly confer power on an Arbitral Tribunal to determine its own jurisdiction, this principle is not expressly stated in the UAE CPC.

    The UAE Courts have the power to nullify an award for lack of jurisdiction regardless of the determination of the Arbitral Tribunal as to its own jurisdiction.

    Claimant may however attempt to bypass the contractually required arbitration process and file their claim directly with the courts. The party that wishes to restore the arbitration process must raise objection ‘at the first hearing’ in accordance with Article 203 of the UAE CPC or be deemed to have waived its right to arbitrate.

    UAE Off-Shore Jurisdictions
    The DIFC Arbitration Law (Article 23) empowers an Arbitral Tribunal to rule on its own jurisdiction. This is further supported by the DIFC-LCIA Arbitration Rules (Article 23).

  19. How are arbitral proceedings commenced? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?

    How an arbitration is commenced is subject to the rules of the relevant arbitral institution which is to govern the arbitration process or those rules and procedures that an ad hoc tribunal may choose to adopt.

    UAE
    Where there is no specific time limit in the arbitration agreement, for the issue of the final award, Article 210 of the UAE CPC provides for a period of six months (from the date of the ‘initial arbitration hearing’) to issue the final award.

    The parties may however agree either “implicitly” or “explicitly” to extend the date for issue of the final award which was ‘prescribed by law or by agreement’. The parties may also empower the Arbitral Tribunal to extend the date for issue of the final award to a particular date.

    Subject to the request of the Arbitral Tribunal or one of the parties, the granting of further extensions of time to issue the final award is at the discretion of the Court.

    DIAC
    Pursuant to the DIAC Rules (Article 36), an Arbitral Tribunal has six months from the date the sole arbitrator or chairman (where three arbitrators are appointed) received the file, to issue the final award.

    The above period may be extended by a further six months, at the Arbitral Tribunal’s discretion. The Executive Committee of the DIAC may further extend this period, pursuant to a reasoned request from the Arbitral Tribunal or on the Executive Committee’s own initiative, should it ‘decide that it is necessary to do so’.

    ADCCAC
    The ADCCAC Rules (Article 27) also provide for an initial period of six months from the date the file is received, for an arbitrator or panel of arbitrators to issue the final award.

    The Arbitral Tribunal may, on its own initiative or at the request for one of the parties, extended the time to issue the final award by up to three months.

    The Committee (the body in charge of administrating commercial arbitration cases) may grant a further extension of time to issue the final award, upon the reasonable application of either the Arbitral Tribunal or the one of the parties.

    UAE Off-Shore Jurisdictions
    Neither the DIFC-LCIA Arbitration Rules (for a DIFC seated arbitration) nor the DIFC Arbitration Law provide for a time limit for the issue of the final arbitral award.

  20. What happens when a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings?

    The UAE CPC cannot compel a respondent to participate in the arbitration process.

    A respondent which chooses not to participate may allege that it was not given appropriate notice of the commencement of arbitration proceedings. It may then attempt to rely on such grounds to challenge any arbitral award made against it.

    A claimant may easily evidence its compliance with the requirement to properly notify the respondent, should the arbitration be administered by the courts or an arbitral institution.

    In an ad hoc arbitration, where notifications may not be as authoritative as they would be in an institutional arbitration, a party may utilise the services of a UAE Federal Court bailiff to deliver a legal notice (or any other formal notice) informing the other party of the commencement of arbitral proceedings or of any other procedural part that is of critical importance to communicate.

  21. In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?

    There is no concept of immunity for the state or state entity, in the UAE. The claimant must however submit its claim to the Government of Dubai Legal Affairs Department (the “DLAD”), before it can issue an action. The DLAD will then attempt to settle the dispute amicably within a fixed period of time. After the expiry of such time period, the claimant may proceed with its claim against the state or state entity.

  22. In what instances can third parties or non-signatories be bound by an arbitration agreement or award?

    A third party may not be bound by an arbitration agreement or award pursuant to UAE CPC.
    The DIFC-LCIA Arbitration Rules (Article 22) further provides that one or more third parties may to be joined to the arbitration subject to the agreement of the third party and the applicant party.

  23. What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?

    UAE
    A party may apply to the UAE Courts for a precautionary attachment of movable property, pursuant to Article 252 of the UAE CPC, to secure its debt.

    The constitution of an Arbitral Tribunal is not the key event in institutional arbitrations for such an application to be made. Rather, it is the commencement of arbitral proceedings, in any form this can be documented. For example, arbitral proceedings are commenced pursuant to Article 4 of the DIAC Rules with the filing of a Request for Arbitration.

    The Arbitral Tribunal can also be asked by a party to suspend proceedings, pursuant to article 209 of UAE CPC, should criminal proceedings have been taken in relation to the dispute that is arbitrated.

    The DIAC Rules (Article 31) also provide for an Arbitral Tribunal to issue provisional orders or other interim / conservatory measures, including injunctions, at the request of a party.
    Interim measures may however be subject to the requesting party furnishing appropriate security.

    UAE Off-Shore Jurisdictions
    DIFC Arbitration Law
    Unless agreed otherwise, an Arbitral Tribunal has the power to order interim measures at the request of a party pursuant to Article 24 of the DIFC Arbitration Law.

    With the written permission of the Arbitral Tribunal, the party in whose favour the order was granted may apply to the DIFC Court of First Instance for the enforcement of the order.

    The party requesting interim measures may however be liable to ‘any costs or damages caused by the measure to any other party if the Arbitral Tribunal later determines that…the measure should not have been granted’’.

    DIFC-LCIA
    The DIFC-LCIA Arbitration Rules (Article 25) provide that an Arbitral Tribunal may, upon application of any party and ‘after giving all other parties a reasonable opportunity to respond to such application’, apply various interim and conservative measures.

    The Arbitral Tribunal is also empowered, subject to the above, to order any claiming party to provide security for legal and arbitration costs.

  24. Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?

    UAE
    Article 209 of the UAE CPC provides that, in specific circumstances:

    "The arbitration shall…cease his function to refer to the president of the court concerned for the following action to be taken:

    'To rule for the legal penalty to be applied to any witnesses who fail to attend or decline to answer

    To rule that some other party be required to produce a document in his possession which is essential for an arbitration ruling to be given.'"

    Whilst rarely exercised, these powers to allow, in theory, an Arbitral Tribunal to access to the local courts and impose the production of evidence.

    UAE Off-Shore Jurisdictions
    Article 34 of the DIFC Arbitration Law and Regulation 43 of the ADGM Regulations provide that the Arbitral Tribunal or a party (with approval of the Arbitral Tribunal) the right to request ‘assistance in taking evidence’.

    The rules of arbitral institutions such as the DIAC Rules (Article 27) or DIFC-LCIA Arbitration Rules (Article 22) provide the Arbitral Tribunal with the discretion to adopt its preferred rules on evidence. In respect of the DIFC-LCIA Arbitration Rules (Article 22) this discretion may only be exercised after giving the parties a reasonable opportunity to state their views.

  25. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings?

    The DLAD has published the ‘Charter for the Conduct of Advocates and Legal Consultants in the Emirate of Dubai’ (the “Charter”). The Charter applies to legal services including arbitration. This Charter however remains in draft form and therefore may be subject to amendment.

    The DIFC Court’s Code of Best Legal Professional Practice (“DIFC COP”), applies to both practitioners who undertake contentious work in the DIFC Courts and those who undertake non-contentious work but are licenced to conduct business in the DIFC ‘(and who are registered with and authorised by DFSA (Dubai Financial Services Authority) as Ancillary Service Providers)’. The DIFC COP does not however have any regulatory status.

  26. How are the costs of arbitration proceedings estimated and allocated?

    Estimation of Costs
    How the cost of the arbitration is assessed, is dependent on the rules of the arbitral institution which governs the proceedings.

    The DIAC and ADCAAC provide a costs schedule based on the value of the claim.

    To this cost additional fees / costs may be added, for example those fees levied by the arbitral institution which are expressed as a fixed sum in DIAC arbitrations and a percentage of the fees to the arbitrator(s) in ADCAAC arbitrations.

    The DIFC-LCIA Arbitration Centre, in contrast to the above, determines the cost of the arbitration based on the hourly rate of the appointed arbitrators, the institution’s staff and the general expenses of both.

    Allocation of Costs
    The parties must agree to empower the Arbitral Tribunal to award legal costs. This agreement is also normally recorded within either the Terms of Reference or within the rules of the applicable arbitral institutions.

    In practice whether that power will be exercised by a given tribunal remains at its discretion and there is no definitive rule necessarily applied of costs following the event. Often tribunals are influence by the procedural law governing litigation in their home jurisdiction and may be reluctant to award substantial legal costs, even if empowered to do so and even in the event of a party being entirely successful.

    The currently applicable DIAC Rules do not contain any provision for a tribunal to award legal costs. However, the new draft DIAC rules do make such provision.

    The DIFC-LCIA Arbitration Rules (Article 28) empowers arbitrators to award legal costs.

  27. Can pre- and post-award interest be included on the principal claim and costs incurred?

  28. What legal requirements are there for the recognition of an award?

    The legal requirements for the recognition of an arbitral award, differ between those applied to foreign and domestic arbitral awards.

    Foreign Arbitral Awards
    Foreign arbitral awards are those awards which are not subject to the jurisdiction of the laws of the UAE and whose enforcement are essentially subject to the provisions of the New York Convention.

    Domestic Arbitral Awards
    Domestic arbitral awards are those awards which are subject to the jurisdiction of the laws of the UAE, and which can be nullified for very idiosyncratic reasons native to the UAE.

    Article 212 of the UAE CPC states that, for as long as the majority of the tribunal members sign the award, it will be considered as validly issued. However, the absence of the signature of an arbitrator (and/or a dissenting view if applicable) must be recorded within the body of the award.

    One highly debatable aspect of which documents must be included in the award relates to the requirement (again within Article 212) for a copy of the arbitration agreement to be physically attached to the award as opposed to the text of it being quoted within the body of the award.

    Other elements of the award, set out within Article 212, include a summary of the statements and exhibits of the opposing parties. The award must be reasoned, dated and must state where it was issued.

    The ADCCAC Rules state in Article 18 that the default language of the arbitration and award as Arabic, unless another language is expressly stipulated as being applicable within the arbitration clause/agreement. This is in contrast the DIAC Rules (Article 21) and the DIFC-LCIA Arbitration Rules (Article 17) which adopt the more traditional approach of the language of the arbitration agreement.

  29. Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?

    There are no specific limits on the remedies that an Arbitral Tribunal in an On-Shore arbitration may award.

    Neither the DIFC Court nor the ADGM Court impose any specific limit, nor expressly classify any remedies as unenforceable.

  30. Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?

    UAE
    There are no specific provisions in the UAE CPC to challenge arbitral proceedings which are in motion. Should a party consider that the arbitration has been commenced subject to a defective arbitration clause, or that no arbitration clause exists, a party may instigate legal proceedings, in certain instances, for example if it has a counterclaim.

    Further, arbitral proceedings may be suspended pursuant to Article 209 of the UAE CPC where the underlying dispute, subject to arbitration is also subject to criminal proceedings.

    The grounds for an application to nullify an arbitral award are set out in Article 216 of the UAE CPC. These grounds include that:

    there was no arbitration deed or the award was rendered in absence of a valid arbitration deed;

    the validity of the arbitration agreement had lapsed through prescription (through the operation of law);

    the actions of the arbitrators exceeded the scope of the arbitration deed;

    the arbitrator’s ruling was given by arbitrators not appointed in accordance with the law;

    the arbitral award was issued by some not all of the arbitral tribunal, without the permission of the remaining arbitral tribunal;

    the award was issued pursuant to a deed of arbitration in which the subject of the dispute was not given;

    the award issued pursuant to a deed of arbitration whose signatories were not empowered to form such a deed;

    the arbitral award was issued by an arbitrator who did not fulfil the legal requirements; and

    in instance where the following generic provision may be deemed by the UAE Courts to apply: ‘…there is something invalid in the ruling or in the procedures affecting the ruling’.

    Should a dissatisfied party wish to appeal the nullification or ratification of an arbitral award, it may do so through the remaining tiers of the court system, the:

    Court of Appeal;

    Court of Cassation or Supreme Court in the Emirate of Abu Dhabi.

    At all times, it is the nullification or ratification which is subject to appeal, not the merits of the arbitral award itself.

    UAE Off-Shore Jurisdictions
    The DIFC Arbitration Law (Article 41) and the ADGM Regulations (Regulation 53) set out the grounds on which an application for setting aside award may be made.

    ADGM
    An Arbitral Award may be set aside under the ADGM Regulations only where the Court of First Instance finds that:

    ‘the subject-matter of the dispute is not capable of settlement by arbitration under the Laws of the ADGM’; or

    the recognition or enforcement of the award would be contrary to the public policy of the UAE’.

    The above grounds are essentially the same as those on which a foreign arbitral award may be refused recognition and enforcement under Article V of the New York Convention.

    DIFC
    An Arbitral Award may be set aside under the DIFC Arbitration Law where the Court finds that:

    ‘the subject-matter of the dispute is not capable of settlement by arbitration under DIFC Law;

    the dispute is expressly referred to a different body or tribunal for resolution under this Law or any mandatory provision of DIFC Law; or

    the award is in conflict with the public policy of the UAE.

    The first and last requirement listed above, as with the ADGM Regulations, are essentially the same as in Article V of the New York Convention.

  31. Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?

    UAE
    The right to challenge an arbitral award cannot be waived prior to the issue of the award.

    The right of challenge may be exercised at the time when the Court is validating the arbitral award. The grounds for such a challenge is set out at Article 216 of the UAE CPC, as previously outlined and subject to appeal under Article 217 of the UAE CPC.

    There are two levels of appeal which a dissatisfied party may avail of, the:

    Court of Appeal;

    Court of Cassation or Supreme Court in the Emirate of Abu Dhabi.

    As noted previously it is only the ratification or annulment that can be challenged, not the merits of the award.

    UAE Off-Shore Jurisdictions
    The DIFC Arbitration Law does not expressly restrict the parties to the arbitration from agreeing to exclude rights of appeal or recourse to the Courts.

    This right may however be waived by the parties or the grounds on which such an application may be permitted can be limited by agreement under the ADGM Regulations (Regulation 54).

  32. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

    Neither an Emirate of the UAE nor government bodies thereof have immunity. At the enforcement stage, barriers exist to the enforcement of awards against an Emirate or governmental body. For example, an award may not be satisfied by the seizure of public or private property owned by an Emirate or government body (Article 247 of the UAE CPC).

  33. To what extent might a third party challenge the recognition of an award?

    UAE
    There are no statutory provisions whereby a third party may challenge the recognition of an arbitral award.

    UAE Off-Shore Jurisdictions
    DIFC Arbitration Law & ADGM Regulations.

    The DIFC Arbitration Law (Article 44) and the ADGM Regulations (Regulation 53) do not provide for an arbitral award to be challenged by a third party.

  34. Have there been any significant developments with regard to third party funding recently?

    The local arbitration market has not been significantly impacted by Third Party Funding although the option has been promoted within the region to interested stakeholders.

  35. Is emergency arbitrator relief available? Is this frequently used?

    UAE
    The concept of emergency arbitrator relief was not envisaged by the UAE CPC. Neither the DIAC nor the ADCCAC currently provide this service.

    The new draft DIAC rules do however state that the services of an emergency arbitrator will be offered in the future.

    UAE Off-Shore Jurisdictions
    Article 9(b) of the DIFC-LCIA Arbitration Rules provide for the appointment of an emergency arbitrator.

    The International Chambers of Commerce announced in 2017 that it would open a representative office in Abu Dhabi located in the ADGM. The ICC Arbitration Rules (2012) and the ICC Arbitration Rules (2017) both provide the services of an emergency arbitrator.

  36. Are there arbitral laws or arbitration institutional rules providing for simplified or expedited procedures for claims under a certain value? Are they often used?

    There are no provisions within the UAE CPC related to expedited procedures for claims below a certain value.

    No such services are presently offered by the DIAC or the ADCCAC.

    The draft new DIAC rules propose the provision of expedited proceedings for those arbitrations subject to its new rules and whose value is below AED 2,000,000.

    The arbitration rules of the ICC, once the institution is operational in the UAE, will provide for expedited procedures for arbitrations which it administers where the:

    ICC Rules 2017 are applicable; and

    claim(s) are for less than USD 2,000,000.

  37. Have measures been taken by arbitral institutions to promote transparency in arbitration?

    The ICC announced in 2017, the opening of a new representative office which will be established in the ADGM.

    The ICC Rules 2012, Article 11(4) provides that:

    "the decision of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final, and the reasons for such decisions shall not be communicated".

    The ICC Rules 2017, will remove the restriction on the Court’s ability to communicate to the parties the reasons for its decisions related to the ‘appointment, confirmation, challenge or replacement of an arbitrator’.

    Should the Court elect to do so, it will illuminate the reasons behind the Court’s action, which the parties may consider important to their case.

  38. Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted? If so, how?

    The population of the UAE is a confluence of cultures, with professionals stemming from a range of jurisdictions, ethnicities and differing legal traditions, working in a single market. The arbitration community reflects this diversity both as counsel and arbitrators.

    The UAE further recognises the benefits of developing the new generation of young arbitrators when it previously launched “DIAC 40”. An initiative to support the development of younger arbitrators in the MENA area.

  39. Have there been any developments regarding mediation?

    UAE
    The Dubai Courts
    There have been no recent developments in field of mediation within the UAE. However, mediation represents a mandatory (albeit merely procedural) pre-requisite for litigants before the Dubai Federal Courts.

    Dubai previously established the Centre for Amicable Settlement of Disputes to deal with claims including claims against Banks and those related to debts subject to a financial cap. Certain claims, such as those related to personal status or labour are not within this centre’s remit.

    UAE Off-Shore Jurisdictions
    DIFC
    The Rules of the DIFC Court provide for Alternative Dispute Resolution, including mediation. Mediation however is not mandatory.

    The DIFC-LCIA Arbitration Centre and the ADGM Arbitration Centre also cater for mediation proceedings.

  40. Have there been any recent court decisions considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?

    The have been no recent decisions on the setting aside of arbitral awards enforced in a different jurisdiction. Foreign arbitral awards which seek enforcement in the UAE, are subject to the requirements of Article V of the New York Convention.

    As previously indicated, the Joint Judicial Committee has however been established to deal with amongst other issues, jurisdictional conflicts between the DIFC Courts and Dubai Courts.