Arbitration in Abu Dhabi, United Arab Emirates
The MENA region has a long cultural and religious tradition of shura (Arabic: شُورَىٰ, shūrā). Shura can broadly be understood as a shared belief in the desirability of determining common affairs in consultation with those who will be affected by the decision. Traditionally, decisions of common interest in the region were discussed and made in tribal councils known as majalis (Arabic: مجالس Majālis) overseen by tribal leaders and comprising male members who were required to satisfy three key conditions. Majalis members were required to be just; to have enough knowledge to distinguish a good leader from a bad one and to have sufficient wisdom and judgment to select the best leader.
Visitors to the region will find that the tribal tradition of consensus governance through shura and the forum of the majlis is still echoed in modern Arabic homes which will usually have a prime room designated as the extended family and friends majalis (which is akin to but more than a salon). Here guests are received and entertained and special gatherings among common interest groups are often hosted for discussions that range from the administrative to the social, familial or religious. Family and business matters are informally aired, discussed and frequently bindingly resolved – often by older or more senior community members – without recourse to formal process. The principle of Shura or ‘mutual consultation’ is still a key element in the social cohesion and governance by consent and common interest that characterises the region.
It is therefore perhaps not surprising that alternative methods of commercial dispute resolution including arbitration in Abu Dhabi have seen rapid acceptance, adoption and growth in the Emirate and in the wider UAE. It is interesting to speculate in light of the foregoing whether it is perhaps the consensual approach underpinning arbitration proceedings in Abu Dhabi and in the wider region echoes has found such rapid and widespread acceptance precisely because it reflects key aspects of the traditional methods of mutual consultation found in the process of ‘shura’ and in the forum of the ‘majalis’.
The requirement in formal arbitration processes that the parties agree on the arbitration process; on the appointment of the arbitration tribunal and on the rules that will govern the determination of the dispute between them echoes the authority implicitly granted to the majalis and the process of shura in the more traditional tribal governance structures that precede the modern commercial world of the MENA region.
The wider geographical legal enforceability of arbitral awards is of course a key factor in the appeal of formal arbitration proceedings beyond the traditional enforcement of shura decisions as traditionally enforced by tribal hierarchy. Furthermore, arbitration in Abu Dhabi has long been supported by the work of the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC). The ADCCAC has claims to being the first formal arbitration centre established within the Gulf Cooperation Council States. It was set up by the Abu Dhabi Chamber of Commerce and Industry with an aim of providing assisting in the resolution of trade disputes through conciliation and arbitration.
Arbitration in Abu Dhabi and the MENA region recently been given an additional boost by the introduction of a new unified arbitration law in the UAE known as Federal Law No 6 of 2018 (the Arbitration Law). Prior to the introduction of the Arbitration Law the process of enforcement of arbitral awards following arbitration in Abu Dhabi was somewhat outdated and of uncertain outcome. The Arbitration Law (which is largely based on the UNCITRAL Model Arbitration Law – albeit with some modifications) has streamlined the process of enforcement not only of domestic but also of foreign arbitral awards, thereby making arbitration in Abu Dhabi and in the wider UAE an even more attractive commercial dispute resolution process.
Furthermore, the UAE is a signatory to the New York Convention, the GCC Treaty and the Riyadh Convention as well as to several bilateral treaties which govern inter alia the enforcement of foreign arbitral awards. This means that, subject to local laws, arbitral awards issued in the UAE can be enforced abroad and similarly (subject to the requirements of Federal Civil Procedure Code in addition to applicable treaty provisions), that foreign awards can be enforced in the UAE through the local court system.
