Life After Decree No. 34 of 2021: DIAC and LCIA Agree to Terms for the Administration of Disputes

In September 2021, in a move that shocked the arbitration community, Dubai Decree No. 34 of 2021 concerning the Dubai International Arbitration Centre (“DIAC“) came into force (the “Decree“). Effectively, this Decree abolished the Emirates Maritime Arbitration Centre (“EMAC”) and the Dubai International Financial Centre (“DIFC“)’s Arbitration Institute (“DAI“), more commonly known as the DIFC-LCIA. Furthermore, the Decree transferred the assets, funds, rights and obligations of the abolished EMAC and DAI to DIAC, along with the employees and arbitrators of the abolished arbitration centres. In essence, this was done to cement DIAC as the central hub of arbitration in the UAE.

Now, 190 days later, it seems the plan is working.

As of 28 March 2022, DIAC and the London Centre for International Arbitration (“LCIA”) have agreed to terms consistent with the Decree by which the LCIA will administer all existing DIFC-LCIA cases (i.e., those commenced and registered by the DIFC-LCIA under a designated case number on or before 20 March 2022) from London.

The DIAC and the LCIA have agreed on a mechanism for the orderly management of funds paid by parties into bank accounts previously held on behalf of DIFC-LCIA and now owned by DIAC. Pursuant to which the DIAC shall transfer such casework related payments to the LCIA to be disbursed to the respective beneficiaries by the LCIA directly.

All arbitrations, mediations and other alternative dispute resolution proceedings referring to the respective rules of the DIFC-LCIA, including ad hoc proceedings where the DIFC-LCIA is requested to act as appointing authority or administrator, commenced on or after 21 March 2022 (or commenced before 21 March 2022 but not registered by the DIFC-LCIA under a designated case number) shall be registered by DIAC and administered directly by its administrative body in accordance with the respective rules of procedure of DIAC, including the tables of fees and costs in force from time to time, through DIAC’s own case management systems, unless otherwise agreed by the parties.

Payments made by the parties to arbitration in respect of the arbitration costs of cases to be commenced on or after 21 March 2022 shall be paid into accounts owned by DIAC.

As time passes, more terms will likely be agreed upon between DIAC and LCIA which will build the framework for disputes administered by DIAC and LCIA. However, at this stage, it seems both institutes are striving towards engineering DIAC into the global hub for arbitration considering the number of factors that support that argument.

We will provide further updates and developments as they are presented to us. If you would like to read our previous article on DIAC’s 2022 Rules of Arbitration, please click here.

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