A New Set of Rules for the Same Game: DIAC New 2022 Rules of Arbitration

The Dubai International Arbitration Center (“DIAC”) has published their latest Rules of Arbitration which will come into force as of 21 March 2022 (the “New Rules”).

The New Rules were drafted with a focus on streamlining arbitration procedures and facilitating further efficiency of the proceedings. They were approved on 25 February 2022.

The following are some notable additions to the New Rules:

Consolidation and Joinder

Article 8.1 of the New Rules provides for the claimant to submit a single request for arbitration in respect of multiple claims arising out of more than one arbitration agreement. Under Article 8.2, where there is more than one arbitration agreement, the Arbitration Court may allow the proceedings to continue as a single arbitration where certain conditions are satisfied, including (without limitation) where the same parties are involved. Pursuant to Articles 8.5 to 8.9, powers are also conferred onto tribunals to consolidate arbitrations after their appointment.

Additionally, provisions – such as Article 9 – included in the New Rules permit the joinder of third parties to the arbitration (as additional claimants or respondents). As per Articles 9.1 and 9.4, the joinder may be permitted either by the Arbitration Court or the tribunal itself.

Third-party Funding

In comparison to the previous rules, the New Rules now expressly provide for and permit the use of third-party funding in arbitration, provided that the funded party discloses the fact, together with details of the funder’s identity and whether the funder has committed to any adverse costs liability. Third-party funding generally falls under Article 22 of the New Rules Importantly, under Article 22.3 of the New Rules, the tribunal may take into account the existence of any third party adverse costs liability when apportioning the costs of the arbitration.

Expediated Proceedings

Following the suit of other arbitral institutes across the globe, the New Rules include provisions for expediated proceedings, primarily under Article 32. Pursuant to Article 32.1 of the New Rules, expedited proceedings shall be applied where:

• the sums claimed and counterclaimed are AED 1,000,000 or less (unless otherwise agreed),
• the parties agree to the proceedings being expedited, or
• the case is of exceptional urgency.

In the event expediated proceedings are triggered, and in accordance with Article 32.5, the award must be issued within three (3) months from when the tribunal receives the file, unless the Arbitration Court agrees otherwise. Having said that, the provisions applicable to expediated proceedings will only apply for agreements made after the New Rules came into force (i.e., 21 March 2022 and onwards).

Interim Measures and Emergency Arbitrators

Appendix II of the New Rules covers “Exceptional Procedures”, which are primarily interim measures, emergency arbitrators, and conciliation procedures. Under Article 1 of Appendix II, powers for tribunals to order interim measures are specifically set out. The interim measures that are made available to the tribunal are rather extensive but generally in line with the provisions of the UAE Arbitration Law.

Legal Costs

With respect to fees, Article 36.3 of the New Rules provides that legal fees are now part of the arbitration costs and could be claimed by the parties under the New Rules. The issue of costs and party-incurred expenses has been a gray zone in the past. This provision will seek to provide guidance on such issues.

Conclusion

DIAC has rapidly cemented it’s presence among the leading arbitral institutes in the world, with the UAE developing an arbitration-friendly ecosystem to compliment.

The New Rules will come into effect starting 21 March 2022 and will govern all new requests for arbitration and exceptional procedures submitted after this date.

If you would like to read the New Rules, please click here.

If you require an arbitrator for a dispute please click here to view our roster of arbitrators, or contact us for assistance in selecting an arbitrator.