Arbitration in Dubai, United Arab Emirates
The MENA region has a long cultural and religious tradition of referring disputes to a respected third party in order to reach an informal resolution. It is therefore perhaps surprising that until relatively recently, formal alternative dispute resolution processes such as mediation and arbitration in Dubai and elsewhere were viewed as complex specialist processes suited mainly to the construction and property sectors.
In recent years however, alternative methods of commercial dispute resolution have seen rapid growth in the UAE – and in the MENA region as a whole. The introduction of a new unified arbitration law in the UAE and the expansion of a well-regarded network of regional arbitration institutions have both been particularly important factors contributing to continued development of arbitration in Dubai and the UAE.
In combination with the tradition of informal resolution through dispute referral, the inherent advantages of arbitration have become increasingly apparent to parties outside the real estate sector, and as a result arbitration in Dubai is increasingly being adopted by a wider range of regional and international commercial parties to resolve many types of corporate and contractual disputes.
The key perceived advantages of arbitration over court-based litigation in the region include:
· the confidentiality of proceedings which in the courts are matters of record;
· the right to conduct proceedings in the language agreed by the parties rather than court-mandated Arabic;
· the ability to present oral testimony rather than follow a documents-only evidentiary process as customarily adopted by the courts;
· the right to appoint arbitrators with technical expertise as needed; and
· the limited rights of appeal available against arbitral awards.
Prior to the introduction of Federal Law No 6 of 2018 (the Arbitration Law), the process of enforcement of arbitral awards following arbitration in Dubai was somewhat outdated and of uncertain outcome.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 Dubai and in the wider UAE a more attractive commercial dispute resolution process than was perhaps previously the case.
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. The growing popularity of arbitration in Dubai and throughout the wider region is supported by several well-regarded arbitration institutions such as the Dubai International Arbitration Centre www.diac.ae; the London Court of International Arbitration www.lcia.org; the Abu Dhabi International Arbitrtion Centre www.arbitratead.ae as well as specialised institutions such as the International Islamic Centre for Reconciliation and Arbitration (IICRA) www.iicra.com. Arbitration in Dubai is particularly popular (with Dubai frequently chosen as the arbitral seat) – although other Emirates also have their own arbitration institutes including the Sharjah International Commercial Arbitration Centre (Tahkeem) www.tahkeem.ae and the Ras Al-Khaimah Centre for Reconciliation and Commercial Arbitration www.rakchamber.ae.
Other developments that have supported the growth of arbitration in Dubai include the growing cooperation between arbitral institutions amongst themselves and with the local courts including the establishment of a judicial tribunal to resolve conflicts of jurisdiction between the Dubai Courts and the DIFC Courts.
