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Guide to International Arbitration in the Middle East: United Arab Emirates

This is the seventh in a series of Guides to International Arbitration in the Middle East.

In this guide, we will look at international arbitration in the United Arab Emirates.

This information found in this guide is accurate as of February 2, 2022.

Is the UAE a signatory to the New York Convention?

The UAE acceded to the New York Convention on August 21, 2006, with no reservations.

What legislation applies to arbitration in the UAE?

The legislation which applies to an arbitration is dependent on whether the arbitral process (i.e. the lex arbitri ) is subject to the Federal Civil Law system of the UAE, or by the laws of two distinct jurisdictions i.e. the Dubai International Financial Centre (“DIFC”) or the Abu Dhabi Global Market (“ADGM”), generally understood as “Common Law Jurisdictions”), both of which have their own arbitration laws/regulations.

UAE- Federal Jurisdiction

Federal Law No. 6 / 2018 on arbitration (the “UAE Arbitration Law”) replaced Articles 203 to 218 of Federal Law No. 11/1992 (the “UAE CPC”).

Articles 203 to 218 of the UAE CPC were those provisions which were relevant to arbitration.

This UAE Arbitration Law applies to all arbitral proceedings carried out in the UAE, unless the parties agree to apply a different arbitration law.

Should the parties agree to apply a different arbitration law, that arbitration law must comply with the requirements of public order and morality in the UAE.

UAE – Common Law 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 has established an arbitration hearing centre (the “ADGM Arbitration Centre”) on Al Maryah Island. The ADGM Arbitration Centre became fully operational on October 17, 2018, as a venue for arbitration.

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

  • seat of the arbitration is the ADGM; or
  • the arbitration agreement applies the ADGM Regulations.
  • the Judicial Tribunal for the Dubai Courts and the DIFC Courts determines the ADGM Regulations applicable.

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.

What other arbitration-related treaties and conventions is the UAE a party to?

The UAE has signed approximately 90 Bilateral Investment Treaties (not all of which are currently in force) most of which are subject to Investor-State Dispute Settlement (“ISDS”) arbitration.

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

UAE – Federal

The UAE Arbitration Law has significant similarities to the UNCITRAL Model Law. However, issues of authority to enter an arbitration agreement have not been clarified under the UAE Arbitration Law and as such, arbitral awards still run the risk of being nullified if it is determined that such authority was lacking.

UAE – Common Law Jurisdictions

Both the DIFC Arbitration Law and the ADGM Arbitration Regulations are largely based on the UNCITRAL Model Law with no significant differences.

What arbitration institutes exist in the UAE?

UAE – Federal Jurisdiction

The main onshore arbitral institutions, in order of case volume, are the:

  • Dubai International Arbitration Centre (“DIAC”), which applies the DIAC Rules (2007) (the “DIACRules”); and
  • Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”), which applies the Procedural Regulations of Arbitration (the “ADCCACRules”).

A specialist arbitration centre for maritime and trade disputes, the Emirates Maritime Arbitration Centre, was established in 2014 within the DIFC and has its own set of arbitration rules (“EMAC”).

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 – Common Law Jurisdictions

The Dubai International Financial Centre / London Court of International Arbitration Centre (“DIFC-LCIA Arbitration Centre”) applies the DIFC-LCIA Arbitration Rules 2021 (the “DIFC-LCIA Arbitration Rules”).

There is currently no arbitral institution within the ADGM, although a state-of-the-art hearing facility was recently set up for arbitration hearings where the ADGM is the seat.

A Decree of the Government of Dubai (Decree No. (34) of 2021) was recently passed which will merge the DIFC-LCIA Arbitration Centre and EMAC into DIAC. The functionality of this process is as of yet undetermined.

What are the validity requirements for an arbitration agreement under the laws of the UAE?

UAE – Federal Jurisdiction

The UAE Arbitration Law sets out the express requirements for a valid arbitration agreement.

Physical Person with Legal Capacity

The parties entering into this agreement must be physical persons with the legal capacity to act (Article 4(1)).

The risk of a person, entering into an arbitration agreement, not being deemed to have the required authority to do so, remains very present, as does the consequent risk that arbitral award could be nullified.

The Matter in dispute must be Capable of ‘Conciliation’

The matter to be arbitrated must be capable of “conciliation” (Article 4(2)) and, therefore, cannot relate to matters of a criminal nature.

The Arbitration Agreement must be in Writing

The requirement for an arbitration agreement to be in writing, is satisfied where the arbitration agreement is:

“contained in a document signed by the Parties or mentioned in an exchange of letters or other means of written communication or made by an electronic communication…” (Article 7(2)(a))

This requirement for a written agreement, is further satisfied where the arbitration agreement makes a clear reference to “a Model Contract, international agreement or any other document containing an arbitral clause” which will form part of the contract (Article 7(2)(b)).

The requirements for an arbitration agreement to be in writing, may further be satisfied by:

“an exchange of written statements between the Parties during the arbitration proceedings or upon acknowledgement before the Court, where one party requests that the dispute be referred for Arbitration and no objection is made by the other party in the course of his defence.” (Article 7(2)(d))

The above denotes an offer and unconditional acceptance of an arbitration agreement.

This is, however, subject to the issuer of such pleadings having the authority to bind the represented party to arbitration, whether by an exchange of pleadings or otherwise.

UAE – Common Law Jurisdictions

The DIFC Arbitration Law (Article 12) and the ADGM Regulations (Regulation 13) broadly require that the arbitration agreement be in writing.

Are arbitration clauses considered separable from the main contract?

Article 6 of the UAE Arbitration Law confirms the UAE’s acceptance of the principle that arbitral agreements are distinct from the underlying contract and as such, uphold the doctrine of separability.

An arbitration agreement is, therefore, unaffected by the “nullity, rescission or termination of the contract” in which it resides, unless the capacity of the parties is affected.

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

Is there anything particular to note in the UAE with regard to multi-party or multi-contract arbitration?

There is no express guidance under the UAE Arbitration Law, DIFC Arbitration Law, or DIAC 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 DIFC-LCIA Rules provide for (under Article 22A) the consolidation of arbitration proceedings either by virtue of the same parties or the same transaction or series of transactions under comparable arbitration agreements, provided no tribunal has yet been formed.

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

In what instances can third parties or non-signatories be bound by an arbitration agreement? Are there any recent court decisions on these issues?

Other than the possible exception of investment treaty arbitration and a party’s subsequent consent to be bound by the arbitration clause, there are no express provisions either in UAE Federal or UAE Common Law jurisdictions that allow for a non-signatory to be bound by an arbitration agreement.

However, Article 22 of the UAE Arbitration Law does envisage the possibility of intervention or joinder of third parties in arbitral proceedings if the same is authorized by the tribunal pursuant to either the request of a party or the joining party, provided that the latter is already a party to the arbitration agreement.

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

UAE – Federal Jurisdiction

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.

UAE – Common Law Jurisdictions

Although Article 41(2)(b)(i) and 44 (1)(b)(iv) of the DIFC Arbitration Law and Articles 53(2)(b)(i) and 57(1)(b)(i) of the ADGM Regulations provide for the possibility of a subject-matter not being capable of settlement by arbitration, there is no prescriptive list within either of these laws as to what matters may not be arbitrable.

Are there any restrictions in the appointment of arbitrators in the UAE?

UAE – Federal Jurisdiction

Article 10 of the UAE Arbitration Law, prescribes that an appointed arbitrator must:

be “a physical person, and he may not be a minor, incapacitated, or deprived of his civil rights due to declaration of bankruptcy unless he is rehabilitated, or due to being sentenced for a felony or misdemeanor involving moral turpitude or dishonesty, even if he is rehabilitated”; and

“not be a member of the Board of Trustees or the administrative branch of the competent Arbitration Institution administering the arbitration case…”.

The arbitrator(s) appointed must also remain independent and impartial for the duration of the arbitral process.

UAE – Common Law Jurisdictions

Both under the DIFC Arbitration Law and the ADGM Regulations, there are provisions that allow for the challenge of arbitrators if justifiable doubts exist as to their impartiality or independence, or if they do not possess qualifications agreed to by the parties.

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

UAE – Federal Jurisdiction

Article 11(5) of the UAE Arbitration Law provides that the court may take the relevant actions for the “completion of the composition and appointment of the members of the Arbitral Tribunal”, upon request of a party.

Such actions may be taken where the authorized entity fails to appoint the Arbitral Tribunal, pursuant to the agreement of the parties or the terms of the UAE Arbitration Law.

Article 11(8) of the UAE Arbitration Law further provides for the courts, upon the request of the parties, to ask an arbitral institution to provide a list arbitral specialist for potential appointment. This would seem to expand the possibility more suitable arbitrator may be appointed.

UAE – Common Law Jurisdictions

DIFC

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).

ADGM

Should the parties fail to agree on the procedure for appointing an arbitrator or arbitrators, the ADGM Regulations (Regulation 18) provide the below.

A Sole Arbitrator

Where parties cannot agree on a sole arbitrator, within thirty (30) days of one party requesting the other to do so, the arbitral institution administering the arbitration or the court (where no arbitral institution has been appointed) shall, on the request of either party, appoint the arbitrator.

A Three-Member Arbitral Tribunal

Where an Arbitral Tribunal is to comprise of three members, each party shall appoint one arbitrator. These two appointed arbitrators shall subsequently appoint a third arbitrator as the “presiding arbitrator” or “chairman”.

The arbitral institution which administers the arbitration, or the court (where no arbitral institution has been appointed) on request of either party shall appoint:

  • two arbitrators for a three-member Arbitral Tribunal where no arbitrators have been appointed within thirty (30) days of receipt of a party’s request to the other party to do so; or
  • a “presiding arbitrator” where the two party-appointed arbitrators cannot agree on a “presiding arbitrator” within thirty (30) days of their appointment.

Multiple Claimants and/or Respondents before a Three-Member Arbitral Tribunal

Where there are multiple claimants and/or multiple respondents, the parties shall jointly appoint a single arbitrator on behalf of the claimant and the respondent, in accordance with any procedures agreed upon by the parties.

Where no agreement has been reached between the parties, the Arbitral Tribunal shall appoint the three-member Arbitral Tribunal in accordance with the section entitled ‘A Three-Member Arbitral Tribunal’’ above.

In the absence of joint nomination procedure and where there is no agreement between the parties as to a method for the constitution of the Arbitral Tribunal, the arbitral institution administering the arbitration or the court (where no arbitral institution administering the arbitration has been appointed) shall appoint the arbitrators and “presiding arbitrator”.

The decision of the arbitral institution or the Court is not subject to appeal.

The arbitral institution or the Court, when appointing the Arbitral Tribunal, shall:

  • have due regard to the qualifications of the arbitrators, on which the parties have agreed;
  • have due regard to such considerations which are likely to result in the appointment of an “independent and impartial” arbitrator; and
  • take into account the “advisability of appointing an arbitrator of a nationality other than that of any party”.

Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge?

UAE – Federal Jurisdiction

Article 15 of the UAE Arbitration Law and the DIAC Rules (Article 13) both provide for the challenging of an arbitrator’s position.

Article 14 of the UAE Arbitration Law provides that an arbitrator may be recused, “in circumstances which are likely to give rise to serious doubts regarding his impartibility or independence”.

Additionally, Article 15 of the UAE Arbitration Law requires that a party intending to recuse an arbitrator must write to the Arbitral Tribunal within fifteen (15) days of becoming aware of:

  • “the arbitrator’s appointment” (Article 15(1)); or
  • the grounds for the recusing the arbitrator (Article 15(1)).

This written statement should set out the grounds for the arbitrator’s recusal.

Should the arbitrator not recuse himself / herself or the other party “does not approve the recusal within 15 days from the date of notification”, the challenging party may file its application with the [arbitration authority or court] within fifteen (15) days of the expiry of the above fifteen (15) day period.

The [arbitration authority or court] shall subsequently make its decision as to whether to recuse the arbitrator within ten (10) days.

This provision may be particularly helpful in ad hoc arbitrations and could be viewed as even more detailed and thorough than the equivalent process set out in some arbitral rules of institutional arbitration proceedings.

Where the relevant grounds exist, this process can be used to remove both arbitrator and chairman alike from their position on the Arbitral Tribunal.

UAE – Common Law 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 fourteen (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 as set out in Article 10 of the DIFC-LCIA Arbitration Rules.

ADGM

Challenging an Arbitrator where no Procedure was agreed by the Parties

Where the parties have not agreed on a procedure for challenging an arbitrator, the ADGM Regulations provide the below.

A party wanting to challenge an arbitrator must send a written statement to the Arbitral Tribunal setting out its reasons, within thirty (30) days of becoming aware of:

  • “the constitution of the arbitral tribunal’’ or;
  • the existence of grounds on which to challenge the arbitrator (Regulation 20(2)).

The grounds for challenging an arbitrator are as followings:

  • “circumstances likely to give rise to justifiable doubts as to his [the arbitrator’s] impartiality or independence”; or
  • he/she does not possess the qualifications agreed upon by the parties (Regulation 19).

The arbitration institution administering the arbitration or the court (where there is no arbitral institution appointed) shall decide on the challenge to the arbitrator, unless the arbitrator withdraws, or the other party agrees to the challenge (Regulation 20(2)).

The arbitration shall, however, not be stayed pending the decision of the arbitral institution or the court (Regulation 20(2)).

Failure or Impossibility to Act

“If an arbitrator becomes as a matter of law or fact unable to perform his function or for other reasons fails to act without undue delay”, his mandate will be termination upon:

  • his “withdraw from his office”; or
  • the parties’ termination of that arbitrator (Regulation 21).

Should the arbitrator not withdraw, or the parties cannot agree on his/her termination, or the “controversy remains concerning any of these grounds”, a party may request that the arbitral institution administering the arbitration or the court (where no arbitral institution has been appointed) to terminate the mandate of the arbitrator.

This decision of the arbitral institution or the court is not subject to appeal.

Are arbitrators immune from liability in the UAE?

UAE – Federal Jurisdiction

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. Indeed, the amendment has now been repealed.

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 they be produced, normally limit an Arbitral Tribunal’s liability to acts of bad faith.

ADCCAC

The ADCCAC Rules do not expressly provide for the grounds on which arbitrators, will or will not be held liable for their actions and/or omissions.

UAE – Common Law Jurisdictions

DIFC

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”.

The above does “not affect any liability incurred by an arbitrator by reason of his resigning”.

ADGM

The ADGM Regulations (Regulation 23) also provides that an arbitrator shall be not be liable unless the “act or omission in connection with an arbitration” is shown to have “caused damage by conscious and deliberate wrongdoing”.

Are there particular rules governing evidentiary matters in arbitration? Will the local courts in the UAE play any role in the obtaining of evidence? Can the local courts compel witnesses to participate in arbitration proceedings?

UAE – Federal Jurisdiction

Article 36 of the UAE Arbitration Law provides for an Arbitral Tribunal, upon its own initiative or pursuant to a party’s request, to seek the court’s assistance in taking evidence.

A witness may, therefore, be required to appear before the Arbitral Tribunal, to:

  • “submit oral testimony”; and/or
  • “present documents or any evidence thereof”.

The request submitted to the president of the Court, may decide on the following:

  1. “Sentencing the witnesses who fail to appear or abstain from answering without legal justification with the penalties prescribed in the applicable laws in the State.
  2. Rendering a decision requiring a third party to produce a document in his possession which is significant to resolve the dispute.
  3. Issuing a letter rogatory”.

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

UAE – Common Law 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.

How are the costs of arbitration proceedings estimated and allocated?

Estimation of Costs

Assessment of the cost of arbitration proceedings 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 schedule, additional fees / costs may be added, for example, those fees levied by the arbitral institution or fees for tribunal appointed experts.

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 Arbitral Tribunal remains at its discretion and there is no definitive rule necessarily applied of “costs following the event”.

Often tribunals are influenced 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 if a party has been entirely successful.

The currently applicable DIAC Rules do not contain any provision for an Arbitral Tribunal to award legal costs.

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

The ADGM Regulations (Regulation 50(5)) provide that the costs of an arbitration should be set out within the arbitral award.

Should the Arbitral Tribunal fail to do so, a party has 30 days from receiving the arbitral award to apply to the Arbitral Tribunal for a “further order on costs”.

The term “costs” under the ADGM Regulations (Regulation 50(5)(f)) includes:

“the costs for legal representation and assistance of the successful party if such costs were claimed during the arbitration, and only to the extent that the arbitral tribunal determines that the amount of such costs, or a part of them, is reasonable”.

Legal costs may, therefore, be claimed by the successful party to an arbitration, subject to the Arbitral Tribunal’s assessment as to whether such costs are reasonable.

What legal requirements are there in the UAE for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e. substantiated and motivated?

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

Foreign Arbitral Awards

The enforcement of foreign arbitral awards by the UAE Federal Courts or the DIFC Courts is generally straightforward and in general compliance with the New York Convention.

The location of the assets, against which the arbitral award is to be enforced, will ultimately determine the court in which the enforcement proceedings are brought.

Domestic Arbitral Awards

It was commonplace for arbitral awards, prior to the introduction of the UAE Arbitration Law, to be nullified for very idiosyncratic reasons native to the UAE.

The recent introduction of the UAE Arbitration Law has overcome some but not all of the possible reasons for award nullification that existed under the previous legislation.

Article 4 of the UAE Arbitration Law may continue to expose arbitral awards to the risk of nullification.

The grounds for such nullification could be that a natural person (or a representative thereof) who was not legally competent to enter into an agreement to arbitrate, did so.

An agreement to arbitrate entered into by such individuals (or a representative thereof), would be rendered void.

The UAE Arbitration Law also retains certain procedural requirements which may affect the arbitral process.

Article 58(2) of the UAE CPC, for example, requires that “The attorney may not:… go to arbitration; … abandon litigation …or undertake any other action for which the law requires special authorization”.

The requirement for specific powers of attorney for those, other than the “General Manager” named in the company’s trade license, appears to have survived the introduction of the UAE Arbitration Law.

Article 41 of the UAE Arbitration Law prescribes the criteria for an arbitral award, which includes the requirement that the nationalities of the arbitrators are stated in the final award.

A very positive provision of this article confirms that an arbitral award will be deemed to have been signed at the seat of the arbitration, regardless of where it was actually signed.

With regard to reasons of an award, Article 41 (4) of the UAE Arbitration Law, Article 38(2) of the DIFC Arbitration Law, Article 50(2) of the ADGM Regulations, Article 37.5 of the DIAC Rules, Article 28.6 of the ADCCAC regulations and Article 26.2 of the DIFC-LCIA Rules all provide that the award shall be reasoned unless the parties agree otherwise.

What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?

UAE – Federal Jurisdiction

The UAE Arbitration Law introduces a fast-track approach to the recognition and enforcement of arbitral awards (Article 55).

A request, on an ex parte basis, may be submitted to the president of the court, for “the recognition of the arbitral award and the issue of an enforcement order”.

The president of the relevant court or delegated judge must, within sixty (60) days of the date of filing of this request, order the recognition and enforcement of the arbitral award, unless a reason to nullify the award set out in Article 53 is furnished.

Should an action to nullify the arbitral award be filed with the court, the enforcement of the award is not automatically stayed (Article 56).

A party may, however, request that the enforcement of the arbitral award is stayed. A stay will only be granted by the court if the request is based on “serious grounds” (Article 56).

The court must decide on the request to stay the enforcement of an arbitral award within fifteen (15) days of the first hearing to examine this request.

If a stay is granted by the court:

  1. it may request a “final guarantee or security” from the party which requested the stay; and
  2. it is required to decide on the “action in nullity” within sixty (60) days from the date of its decision to stay proceedings.

UAE – Common Law Jurisdictions

DIFC

The Rules of the Dubai International Financial Centre Courts 2014 (the “RDC”) set out the process applicable to arbitration claims (Part 43 of RDC).

An arbitration claim, including an application to either recognize or enforce an arbitral award (Part 43.2(3)(xii) of the RDC), must be commenced through the issue of the arbitration claim form in accordance with Part 8 of RDC (Part 43.3 of the RDC).

An application to either recognize an arbitral award (Article 43 of DIFC Arbitration Law) or enforce an arbitral award (Article 42(1) of the DIFC Arbitration Law) “may be made without notice” (Part 43.62 of the RDC).

The court does, however, retain the authority to specify which parties to the arbitration must be served with an arbitration claim form (Part 43.63 of the RDC).

The Order enforcing or recognizing the arbitral award must be served on the party against which recourse is sought (Part 43.68 of the RDC).

The recipient has 14 days after the service of an Order, made without notice, to apply to set aside the Order (Part 43.70 of the RDC).

Where an Order is served outside of Dubai, the court will determine the period of time during which the recipient can apply to set aside the Order (Part 43.70 of RDC).

ADGM

The ADGM Court Procedure Rules 2016 (the “ADGM CPR”) set out the rules in relation to Arbitrations (Part 27 of the ADGM CPR) and arbitral awards.

An arbitration claim, including a claim for the enforcement of an arbitral award, must be made through the issue of an arbitration claim form pursuant to Rule 30 of ADGM CPR (Rule 231(2) of the ADGM CPR).

The ADGM CPR, however, provides that an application made pursuant to section 56 of the ADGM Regulations [recognition and enforcement of awards] for the enforcement of an award may be made without notice.

However, the court may “specify those parties to the arbitration, on whom the claim form must be served” (Rules 232(2) of the ADGM CPR).

Following service of an Order to enforce an arbitral award, the recipient has 14 days, from the date of service, to apply for the setting aside of the Order (Rule 234(3) of the ADGM CPR).

Where the recipient of the Order is outside of the jurisdiction, the Court may decide upon the time period, within which the recipient may apply to set aside the Order (Rule 234(3) of the ADGM CPR).

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

UAE – Federal Jurisdiction

Should a party wish to nullify an arbitral award, it may only do so by “lodging an action of nullity with the Court” (Article 53) or by objecting during the process for recognizing an arbitral award.

The Process for Challenging

Pursuant to Article 54 of the UAE Arbitration Law, a party has thirty (30) days, from the date of notification of the arbitral award to apply to nullify the arbitral award.

The court may, at the request of a party, stay enforcement proceedings for a period of up to sixty (60) days in order to provide the Arbitral Tribunal with the opportunity to address any possible grounds  for award nullification.

The Grounds for Challenging

The party which intends the arbitral award to be nullified, pursuant to Article 53 of the UAE Arbitration Law, can do so on the following grounds:

  1. there was no arbitration agreement, or such agreement was null and void or forfeited pursuant the law applied by the parties or the UAE Arbitration Law, where no law was chosen;
  2. a party to the arbitration agreement was incapacitated or lacked capacity, at the time of its conclusion;
  3. a party had no legal capacity to be part of the arbitration;
  4. a party was unable to submit his statement of defense due to having been given improper notice of the appointment of an arbitrator or arbitral proceedings, or by reason of a failure on behalf of the Tribunal, or for any reasons outside the control the party;
  5. the arbitral award did not apply the law agreed by the parties, to the subject of the dispute;
  6. the appointment and/or composition of the Arbitral Tribunal was contrary to the UAE Arbitration Law or the agreement of the parties;
  7. the arbitral process is void in such a way that it influenced the arbitral award, or the arbitral award was issued after the deadline for issuing the arbitral award; and
  8. the arbitral award addressed matters not covered by the arbitration agreement, or beyond the scope of the arbitration, unless such matters can be separated from the arbitral award.

Should a dissatisfied party wish to appeal court’ decision on nullification of an arbitral award, it may do so through the Court of Cassation.

UAE – Common Law 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.

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 are essentially the same as in Article V of the New York Convention.

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.

Conclusion

If you require an arbitrator for a dispute relating to the jurisdiction of the United Arab Emirates, please click here to view our roster of arbitrators, or contact us for assistance in selecting an arbitrator for your dispute.