A General Introduction to International Arbitration in the United Arab Emirates
All the questions
i The legal system
The United Arab Emirates (UAE) is a federation of seven emirates, founded on December 2, 1971. The UAE legal system includes the federal court system, separate rules and laws applicable to particular emirates within the UAE, and those applicable to some of the free zones established in the UAE.
Each emirate is bound by federal law but is also allowed under the federation to establish its own legislative and judicial branch, although federal law retains primacy. Of the seven emirates, Abu Dhabi, Dubai and Ras Al Khaimah have their own laws and judicial systems.
In Abu Dhabi and Dubai, respectively, the Abu Dhabi Global Market (ADGM) and Dubai International Financial Center (DIFC) are offshore “islands” with their own courts and laws based on common law.
ii UAE Arbitration Law
Agreements to arbitrate disputes in contract and tort sitting in the United Arab Emirates, apart from the ADGM and the DIFC, are governed by the Federal Law No. 6 of 2018 concerning Arbitration (the Emirates Arbitration Law United Arabs).
The UAE Arbitration Law was long overdue and is based on the UNCITRAL Model Law, which entered into force in June 2018. Article 26 of the UAE Arbitration Law reflects the principle of equality between parties in the UNCITRAL Model Law and provides that the parties shall be treated equally and given an adequate and sufficient opportunity to present their claims and defences.
Under the UAE Arbitration Law, arbitration agreements must be evidenced in writing, and although the UAE Arbitration Law provides that the arbitration agreement may be incorporated by reference and concluded by correspondence, including by e-mail (article 7), breaking with the UNCITRAL model In law, the person who concludes an arbitration agreement must have the capacity or the authority to do so (article 4).
Courts in the United Arab Emirates must dismiss an action brought in respect of a dispute where there is a valid arbitration agreement if the defendant raises the existence of an arbitration agreement “before bringing any other request or plea on the subject of the action” (article 8).
Not all provisions of the UAE Arbitration Law are binding, with many providing the parties with the option of agreeing otherwise. One such example is that found in the UAE Arbitration Law regarding the commencement date of arbitration. Article 27 provides that “Unless otherwise agreed by the parties to the arbitration, the arbitral proceedings begin on the day following that of the constitution of the arbitral tribunal”. This article represents a departure from the UNCITRAL Model Law which provides that the procedure begins from the date on which the respondent receives the request for arbitration.
iii Arbitration Sitting in UAE Free Zones
UAE Free Zones conduct activities for specific purposes in geographic areas under an amendment to the UAE Constitution authorizing their establishment. There are two major free zones in the UAE which have their own system of laws and courts: DIFC and ADGM.
Dubai International Financial Center
The DIFC is one of several Free Economic Zones established across the UAE by Federal Law 35/2004 and Dubai Law 9/2004. Federal Law 8/2004 exempts the DIFC from federal commercial and civil jurisdiction and regulation. DIFC courts, however, do not have jurisdiction over criminal, administrative and money laundering laws. Dubai Law 12/2004 established the Judicial Authority of the DIFC and the Judicial System of the DIFC, which comprises the Magistrate Court and the Court of Appeal. The DIFC Arbitration Act No. 1 of 2008 applies to arbitrations sitting in the DIFC.
Abu Dhabi World Market
The ADGM is a free zone established in 2015 in Abu Dhabi with another set of laws and courts based on common law, including a court of first instance and a court of appeal. The ADGM Application of English Law Regulations 2015 dictate that ‘the common law of England (including principles and rules of equity), as they appear from time to time, shall apply and have the force of law and shall form part of the law of, Abu Dhabi Global Market”, “to the extent that it applies to the circumstances of the Abu Dhabi Global Market” and “subject to such modifications as those circumstances require” (Article 1) .
The ADGM Arbitration Rules 2015 (the ADGM Arbitration Law), which is based on the UNCITRAL Model Law, applies to ‘arbitrations where the seat of arbitration is Abu Dhabi Global Market, or when an arbitration agreement applies these rules” (article 8).
iv UAE Arbitration InstitutionsDubai International Arbitration Center
The Dubai International Arbitration Center (DIAC) was established in Dubai by the Dubai Chamber of Commerce and Industry in 1994 and today continues to be one of the most active arbitration institutions in the Emirates United Arabs. On September 20, 2021, Dubai International Arbitration Center Decree No. 34 of 2021 (DIAC Decree) came into force, abolishing both the DIFC Arbitration Institute (DAI) and the Arbitration Center Emirates Maritime (EMAC) and transferring their assets, rights and obligations to DIAC, establishing a single unified arbitration center under a new revamped DIAC. DIAC’s recent announcement on March 21, 2022 confirmed that arbitrations commenced on or after this date by reference to the DIFC-LCIA Rules will be administered by DIAC in accordance with the new 2022 DIAC Rules, unless the parties agree otherwise. . DIAC’s new arbitration rules came into effect on March 21, 2022, replacing its old 2007 rules.
Abu Dhabi Commercial, Conciliation and Arbitration Center
The Abu Dhabi Commercial, Conciliation and Arbitration Center (ADCCAC) was established in 1993.
DIFC-LCIA Arbitration Center
The DIFC-LCIA Arbitration Center was established in 2008 as a joint venture between DAI and the London Court of International Arbitration (LCIA). Following the promulgation of the DIAC Decree, on September 20, 2021, the DAI was effectively abolished, beginning an uncertain transitional period of six months for existing arbitrations administered by the DIFC-LCIA Arbitration Center as well as for new arbitrations referring to the rules of the DIFC-LCIA. Given the success of the DIFC-LCIA Arbitration Center, the DIAC Executive Order came as a surprise to many and subsequently, in March 2022, once an agreement was reached between DIAC and the LCIA, it was clarified that all existing cases started with the DIFC-LCIA. (and having received a registered case number) no later than March 20, 2022 will be administered to completion by the LCIA. Arbitrations commenced after that date under the DIFC-LCIA Rules will be administered by the new DIAC under the new 2022 DIAC Rules, unless the parties agree otherwise.
ADGM Arbitration Center
The ADGM Arbitration Center was launched in October 2018. The ADGM Arbitration Center is not an arbitration institution, but rather a neutral facility intended to conduct hearings for mediations and arbitrations. arbitrations. The ADGM Arbitration Center may be used to conduct hearings for arbitrations sitting at the ADGM, as well as for any other arbitration.
It is evident that the International Chamber of Commerce (ICC) is expected to open a representative office within the ADGM Arbitration Center since its launch, and in December 2020, the ICC Court Secretariat announced that he was about to open his fifth international business management. office at the ADGM Arbitration Center.
Other Arbitral Institutions
Other noteworthy institutions include (1) the Sharjah Center for International Commercial Arbitration (Tahkeem); (2) the Ras Al Khaimah Center for Reconciliation and Commercial Arbitration; and (3) the International Islamic Center for Reconciliation and Arbitration (IICRA) (an international, independent, non-profit organization of the Islamic finance industry).
The UAE acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) on November 19, 2006.
The UAE is also a signatory to the multilateral treaty known as the 1996 Agreement on the Enforcement of Court Judgments, Delegations and Judicial Opinions in the States of the Gulf Cooperation Council (GCC), regarding concerns the enforcement of arbitral awards between GCC States. Additionally, the United Arab Emirates is a party to the Riyadh Convention. There are bilateral treaties concluded by the UAE for the enforcement of judgments at the international level in France, India, China, Khazakhstan, Pakistan, Armenia, Azerbaijan, Afghanistan, Nigeria and Tujikistan.
The DIFC and ADGM also benefit from additional bilateral guidance memoranda for the reciprocal recognition of judgments with countries such as England and Wales, Australia, New Zealand, Hong Kong and Singapore.