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Commercial Arbitration 2017

Last verified on Tuesday 2nd May 2017

United Arab Emirates

John Gaffney, Thomas R Snider and Dalal Al Houti
Al Tamimi & Company

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
    1. The United Arab Emirates (UAE) contains three separate arbitral regimes: the regime in the UAE itself, the regime in the Dubai International Financial Centre (DIFC), and the regime in the Abu Dhabi Global Market (ADGM).

      The DIFC is a free zone in Dubai created in 2004 that has its own civil and commercial laws (including its own arbitration law), and its own English-language common-law courts. The DIFC is modelled on international best practice and largely follows the English common law approach. It has been designed to appeal to the international business community.

      The ADGM is a free zone in Abu Dhabi established in 2013 that also has its own civil and commercial laws (including its own arbitration regulations), and its own English-language common-law courts. The ADGM directly applies English laws, and, as with DIFC, has been designed to appeal to the international business community.

      As regards the New York Convention, the UAE acceded to the New York Convention in 2006 without making any declarations or reservations. The DIFC and the ADGM are also bound by the New York Convention by virtue of the fact that they are part of the UAE.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
    1. The UAE, including and the DIFC and the ADGM, is a party to the following treaties regarding the recognition and enforcement of arbitral awards: the Washington Convention on the Settlement of the Investment Disputes between States and Nationals of Other States (ICSID) of 1965; the Riyadh Convention on Judicial Cooperation between States of the Arab League of 1983, and the GCC Convention for the Execution of Judgments Delegations, and Judicial Notification of 1996.

      The UAE has entered into bilateral treaties specifically dealing with arbitration with Afghanistan (2009), Algeria (1984), Armenia (2003), Azerbaijan (2007), China (2004), Egypt (2000), France (1992), India (2000), Jordan (1999), Kuwait (2008), Morocco (2006), Pakistan (2005), Somalia (1982), Sudan (2005), Syria (2002). Tajikistan (2007), Tunisia (1975), and the United Kingdom (2007).

      The UAE is also party to bilateral investment treaties (BITs) with several countries, including Algeria (2002), Austria (2003), Azerbaijan (2007), Belarus (2001), Belgium–Luxembourg Economic Union (2007), China (1994), the Czech Republic (1995), Egypt (1999), Finland (1997), France (1995), Germany (1999), Greece (2016), India (2014), Italy (1997), Jordan (2010), Korea (2004), Lebanon (1999), Malaysia (1992), Montenegro (2013), Morocco (2002), Pakistan (1997), Poland (1994), Portugal (2012), Romania (1996), Russia (2013), Serbia (2014), Sweden (2000), Switzerland (1999), Syria (2001), Tunisia (1997), Turkey (2011), Turkmenistan (1999), Ukraine (2004), United Kingdom (1993), Uzbekistan (2008) and Yemen (2001).

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
    1. The DIFC enacted DIFC Law No.1 of 2008 (DIFC Arbitration Law); it is based on the UNCITRAL Model Law. The ADGM enacted Arbitration Regulations in 2015 (ADGM Arbitration Regulations) that are also based on the UNCITRAL Model Law, but with a number of enhancements. The UAE does not have a free-standing arbitration law. Rather, arbitrations in the UAE are governed by the UAE Civil Procedure Law No. 11 of 1992 (CPC), which contains a chapter on arbitration (articles 203–218). The CPC does not conform to the UNCITRAL Model Law. However, a draft Federal Arbitration Law has been circulated for public comment in recent years. Once enacted, the draft Federal Arbitration Law will replace the existing provisions in the CPC. 

  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
    1. The main arbitration centre in “onshore” UAE is the widely used Dubai International Arbitration Centre (DIAC). This centre will act as an appointing authority.

      The DIFC-LCIA Arbitration Centre (“DIFC-LCIA”) is also very active and will act as an appointing authority. The DIFC-LCIA was re-launched in November 2015 and operates through a series of agreements entered into between the DIFC Arbitration Institute (DAI), an organ of the DIFC, and the LCIA for the management and administration of arbitrations and mediations in which the parties have selected the DIFC-LCIA Rules.

      The newest arbitral institution to be established in Dubai is the Emirates Maritime Arbitration Centre (EMAC).

      Abu Dhabi also has its own centre, the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC), which issued a reasonably modern set of rules in 2013. It is not clear if ADCCAC will act as an appointing authority, but there is nothing to prevent it from doing so.

      As of the time of writing, the ADGM does not yet have an arbitration centre. However, it announced in July 2017 the establishment of an arbitration hearing centre in the ADGM by early 2018. This significant milestone augments the recent development and agreement with the International Court of Arbitration of the International Chamber of Commerce (ICC Court), to launch its Middle East representative office in ADGM.

      Other emirates also have arbitration centres, such as Ras Al Khaimah and Sharjah.

      The UAE also hosts the International Islamic Centre of Reconciliation and Arbitration, which was set up to hear cases governed by Islamic shariah law. 

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. Yes, foreign institutions can operate in the DIFC, ADGM, and the UAE. For example, the ICC operates within the UAE and is a popular institution.

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
    1. The DIFC, ADGM, and the UAE do not have a specialist arbitration court. Generally, the judges who sit in the DIFC and ADGM courts are familiar with the law and practice of international arbitration and are supportive of it. DIFC-court and ADGM-court judges sit as international arbitrators (such as Chief Justice Michael Hwang SC of the DIFC courts).

      The UAE courts are less familiar with international arbitration. The highest court (the Court of Cassation), however, contains judges who are more knowledgeable. Recent Court of Cassation judgments demonstrate that the higher UAE courts do have an understanding of international arbitration and are supportive of it, but errant judgments are still sometimes issued.      

    Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
    1. Under the DIFC, ADGM, and the UAE regimes, arbitration agreements can cover future events. The DIFC Arbitration Law and the ADGM Arbitration Regulations follow the UNCITRAL Model Law provision regarding the requirements for a binding arbitration agreement. It must be in a recorded form and can be included by reference.

      Under the CPC, arbitral agreements must be in writing and signed by a person authorised to bind the company to arbitration. For a limited-liability company, this will usually be the general manager, but for other corporate forms a specific power of attorney or company authority may be needed to confirm that the person signing is duly authorised. Under UAE law, it is for each party to verify and satisfy itself that the other party’s signatory has the necessary power to enter into an arbitration agreement. The courts tend to be conservative; accordingly, although arbitral agreements can be incorporated by reference, it is generally advisable that, where this is the case, the arbitral clause is explicitly signed by the parties.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
    1. The DIFC Arbitration Law and ADGM Arbitration Regulations do not explicitly state that certain disputes are non-arbitral. However, the DIFC Arbitration Law and ADGM Arbitration Regulations only regulate civil and commercial matters, and the DIFC and ADGM are subject to the federal laws of the UAE. Therefore, criminal matters, family matters, and public policy matters cannot be arbitrated in the DIFC, ADGM, or the UAE. Moreover, under UAE law, disputes involving certain types of commercial agencies, distributorship, and labour are not arbitrable as they fall under the exclusive jurisdiction of the UAE courts. In recent years, the issue of arbitrability has been a key issue due to a Dubai Court of Cassation judgment that seemed to interpret public policy extremely widely to include all real estate disputes and disputes concerning the circulation of wealth. However, recent judgments in both Dubai and Abu Dhabi have clarified that such disputes can generally be arbitrated, save for issues concerning registration of ownership. As regards consumer contracts and employment disputes, the DIFC Arbitration Law states that these can only be arbitrated if, among other things, consent is given by the employee or consumer after the dispute has arisen.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
    1. The ADGM Arbitration Regulations explicitly refer to the joinder of third parties. The ADGM Arbitration Regulations allow one or more third parties to be joined to the arbitration, provided that such person is a party to the arbitration agreement or has consented to joinder in writing.

      However, neither the DIFC Arbitration Law nor the CPC explicitly refers to the participation of third parties in arbitration, although both regimes generally recognise that only those parties who have signed an arbitration clause will be bound by it. If the parties agree that a third party can be joined, then there is nothing in either the DIFC or UAE arbitral regimes to prevent this. For example, the DIFC-LCIA rules allow a third party to be joined if the third party and at least one party to the arbitration consent. Since the other party to the arbitration has consented to the DIFC-LCIA rules, it is expected that the involvement of a third party in these circumstances would be upheld by both the DIFC and UAE courts. However, it has not been tested to date. 

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
    1. The ADGM Arbitration Regulations explicitly permit consolidation orders. The parties are free to agree (i) to consolidate with other arbitral proceedings or (ii) that concurrent hearing are to be held on such terms as they may agree.

      However, neither the DIFC Arbitration Law nor the CPC explicitly addresses the consolidation of separate arbitral proceedings. Where both parties have numerous contracts with identical arbitration clauses and which are all related to the same commercial endeavour, it has been possible in UAE-seated arbitrations to consolidate them into one arbitral proceeding (eg, where an investor has bought multiple units in the same real estate project under separate sale and purchase agreements). There is no reason why a tribunal in a DIFC-seated arbitration could not do the same. If, however, the parties to the various contracts are not identical, or the contracts contain conflicting arbitration clauses, then it would not be possible to consolidate them in the absence of the consent of all the parties. 

  11. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?

    1. Although it has not been tested, it is likely that the DIFC and ADGM will be heavily influenced by the English approach to piercing the corporate veil (ie, it can only occur where the existence of a separate corporate entity is merely a façade). Under UAE law, although it is technically possible to pierce the corporate veil in limited situations (ie, fraud), it is extremely rare.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. Yes, under both the DIFC, ADGM and UAE arbitral regimes arbitration clauses are considered separate from the main contract and will survive any termination or invalidation of the main contract.

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
    1. Under the DIFC, ADGM, and UAE arbitral regimes, the principle of competence-competence is recognised. However, if a party is not satisfied with the decision of the tribunal, it can approach the supervisory court. Under the DIFC Arbitration Law, this must be done within 30 days of the tribunal’s ruling on jurisdiction, and the arbitration can continue while the request before the DIFC courts is pending. However, the ADGM Arbitration Regulations state that a party must object to the arbitral tribunal’s jurisdiction “not later than the time he takes the first step in the proceedings to contest the merits of any matter in relation to which he challenges the tribunal's jurisdiction”. Under the UAE legal regime, the situation is similar, but there is no set time limit by which a party needs to approach the UAE courts to consider the issue of the tribunal’s jurisdiction. 

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
    1. If the parties desire to use the DIFC as their seat, it is important that the clause explicitly states that “the seat or legal place is the Dubai International Financial Centre”, since a mere reference to “Dubai” is ambiguous. Similarly, if the parties desire to use the ADGM as their seat, they should explicitly state that “the seat or legal place is the Abu Dhabi Global Market”.

       If the parties wish to have the UAE as the seat, it is advisable to state a particular emirate so as to avoid any doubt as to which court will be the supervisory court. If Dubai or Abu Dhabi is to be the seat, it is advisable for this to be stated as “Dubai (excluding the DIFC)” or “Abu Dhabi (excluding the ADGM)” respectively to avoid any ambiguity. Where the UAE is the seat, the language of the arbitration will be Arabic unless otherwise agreed, so it is advisable that parties explicitly choose the language of the arbitration if Arabic is not desired.

      In relation to the confidentiality of the proceedings, although under the DIFC Arbitration Law and ADGM Arbitration Regulations the arbitration proceedings are deemed to be confidential, no such blanket confidentiality provision exists under the CPC. Therefore, if the parties wish any UAE arbitration to be confidential, this should either be explicitly stated or they should choose an institution whose rules include provisions regarding confidentiality.     

      Finally, the UAE courts have held that arbitrators do not have any inherent power to order legal costs. Therefore, as with confidentiality, if the parties wish any tribunal in a UAE-seated arbitration to order legal costs, this should either be explicitly stated in the agreement, or they should choose an institution whose rules grant explicit powers to the tribunal to order legal costs (note that the UAE courts have held that the DIAC rules do not contain any such provisions).

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
    1. Institutional international arbitration is far more common than ad hoc arbitration in both the DIFC and the UAE. In general, ad hoc international arbitration proceedings occur in cases where the underlying arbitration agreement is defective or unclear as to the desired institution. When ad hoc arbitrations do occur, they will often use the UNCITRAL Rules. Using an institution in arbitrations seated in the UAE is always recommended so as to help ensure the smooth running of the process. In regards to ADGM, it is too early to say since it has only been in existence as an arbitral seat and a court jurisdiction for a relatively brief period at the time of writing; however, we anticipate that institutional arbitration will be the norm in the ADGM as it develops as well.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
    1. The DIFC Arbitration Law addresses the issue of how a tribunal is to be constituted where there are more than two parties. If the parties have not agreed in writing that the parties represent two separate sides for the formation of the tribunal, the DIFC court will appoint the tribunal without regard to any party’s nomination. When the DIFC court does this the arbitral agreement is to be treated for all purposes as a written agreement for the appointment of the arbitral tribunal by the DIFC court, meaning that the final award should be enforceable under the New York Convention notwithstanding the fact that the parties had no involvement in the formation of the tribunal. Parties should bear this in mind when drafting any multi-party arbitration clauses seated in the DIFC.

      The ADGM Arbitration Regulations also address the appointment of the arbitral tribunal in the case of multi-party disputes. Where the dispute is to be referred to three arbitrators, the multiple claimants, jointly, and the multiple respondents, jointly, will each appoint one arbitrator according to the appointment procedure agreed on by the parties. The two arbitrators appointed will appoint the third arbitrator, who will be the presiding arbitrator. The ADGM courts, or the relevant arbitration institution, may assist if the parties fail to appoint the arbitrator, or if the two arbitrators fail to agree on the third arbitrator within 30 days.

      The UAE regime does not address multi-party arbitrations. Any problems encountered in constituting the tribunal will need to be referred to the local court to be dealt with in the case of ad hoc arbitrations or to the relevant institution in the case of institutional arbitrations. The result will likely be the same as in the DIFC and ADGM regimes (ie, the court will appoint the tribunal).

    Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, the arbitral proceedings commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. There are no limitation periods for commencing arbitration. Under the UAE arbitral regime, there are no particular rules about commencing arbitral proceedings and no time limits. Where an institution is being used, the rules of the institution will need to be followed.

    Choice of law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, if the parties have not agreed on the substantive law, then the tribunal shall apply the law determined by the conflict-of-laws rules that it considers applicable. Under the CPC, there are no provisions concerning how the substantive law is to be determined in the absence of the parties’ agreement. The tribunal, however, has procedural freedom under the CPC and so in practice determines the substantive law using the conflict-of-laws rules it considers applicable.

    Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, there is no restriction on who can sit as arbitrator. In the DIFC, the parties can agree to exclude people of a particular nationality if they wish. However, in the ADGM, parties cannot preclude an arbitrator by reason of his nationality. In the DIFC, ADGM and the UAE, arbitrators must be independent and impartial. Under the CPC, arbitrators must not be a minor or under the legal guardianship of another. They also may not have been convicted of a criminal offence or be bankrupt unless they have undergone “formal rehabilitation”.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
    1. Non-nationals can and regularly do act as arbitrators in arbitrations seated in the UAE and the DIFC. There are no restrictions. Non-nationals can also act as arbitrators in arbitrations seated in ADGM; however, it is too early to say if this will be the case in practice.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
    1. The DIFC Arbitration Law and ADGM Arbitration Regulations specifically allow the competent court to assist with the appointment of an arbitrator where, for some reason, the parties are unable to constitute the tribunal. Likewise, under the CPC, the local court has the power to assist with the appointment of arbitrators should the selection mechanism fail for any reason.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, no arbitrator is liable to any person for any act or omission in connection with an arbitration, unless they are shown to have caused damage by “conscious and deliberate wrongdoing”. This does not, however, apply in relation to any liability incurred by an arbitrator by reason of his or her resigning. Under UAE law, arbitrators are treated as judges and so are generally immune from suit unless they have acted criminally. An arbitrator may, however, be required to compensate the parties where the arbitrator withdraws without a good reason.

      The potential criminal liability of arbitrators in the UAE was expanded on 18 October 2016. Federal Law No. 7 of 2016 amended article 257 of the UAE Penal Code to read that an arbitrator may be punished with imprisonment for issuing a decision “in contravention of the requirements of the duty of neutrality and integrity”. While no doubt well intentioned, this change has led some arbitrators to refuse to accept or continue with appointments, and others have insisted on hearings taking place outside of the UAE. This amendment to article 257 may have a chilling effect on arbitration in the UAE if it is not quickly reversed. However, it remains to be seen whether this will happen and, if so, when.The potential criminal liability extends to the DIFC and ADGM since they are also subject to the federal laws of the UAE.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
    1. Under the DIFC Arbitration Law, an arbitrator may refuse to deliver a final award or terminate the proceedings until the arbitrator’s fees have been paid in full. Under the ADGM Arbitration Regulations, a tribunal will require payment of an advance on costs before proceeding with a case. The precise practice and amounts involved will depend on the institutional rules and practice, where applicable, or the tribunal itself in ad hoc cases. The UAE law is silent on this issue. 

    Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, a party can challenge an arbitrator only if circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality and independence exist, or if the arbitrator does not possess qualifications agreed to by the parties. Under the CPC, a party may seek the removal of an arbitrator if the arbitrator deliberately neglects his or her task despite it being brought to the arbitrator’s attention. An arbitrator may also be removed if he or she becomes bankrupt, subject to a criminal conviction, or is put under guardianship. Since arbitrators are also viewed as judges, the grounds for removing judges also apply to arbitrators, and these include where there is a conflict of interests arising from an arbitrator’s relationship to one of the parties (such as by marriage or family, guardianship, trustee, or a business relationship) or with counsel, witnesses or experts in proceedings.

    Interim relief

  25. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, the tribunal has the power to order any interim measures that it considers necessary. These can include security for costs and orders to preserve goods or evidence. A party can apply to the competent courts to enforce any such order. The DIFC courts and ADGM courts also have the power to issue interim relief to the same extent as they would for proceedings in the DIFC courts and ADGM courts respectively. This also includes orders to preserve goods or evidence or that one party pay security for costs. Under the CPC, tribunals do not have any inherent power to order interim relief, and since the UAE courts themselves rarely grant such relief it is unlikely that any order for interim relief made by a tribunal would be enforced by the court. Both the DIFC and the UAE courts can grant orders stopping a tribunal from proceeding with an arbitration, but this is rare. The practice of the UAE courts tends to be that any issue regarding the jurisdiction of the tribunal is to be determined by the tribunal and can be reviewed by the court once the final award comes before it for recognition.

      The DIFC courts have issued an anti-suit injunction in favour of an arbitration clause to prevent a party pursuing a claim before the Pakistani courts. This type of relief is not available from the UAE courts.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
    1. Under the DIFC Arbitration Law and the ADGM Arbitration Regulations, both tribunals and the DIFC or the ADGM courts, as the case may be, can make orders for security for costs, although this is rare. Under the CPC, security-for-costs orders are not available.

      However, where an arbitral tribunal orders security for costs in the DIFC or the ADGM, and the competent court has ratified the order, the UAE local courts are likely to enforce it (nothing in the law ought to prevent its enforcement since it is not in principle against public policy or sharia law). 

    Procedure

  27. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, the tribunal has procedural freedom, provided that the parties are treated with equality and be given a full opportunity to present their case. Under the CPC, the only mandatory rules are that witnesses must give evidence on oath and the parties must be able to present their cases. It is considered best practice, if not mandatory, to have Terms of Reference prepared and signed by all parties during the arbitration. 

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
    1. Under both the DIFC, ADGM and UAE arbitral regimes, the failure of a respondent to participate does not inhibit the tribunal from proceeding with the arbitration and rendering an enforceable award.

  29. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

    1. Under both the DIFC and UAE arbitral regimes, the IBA Rules on the Taking of Evidence are widely used and followed. It is too early to comment if the ADGM would use and follow the IBA Rules; however, we anticipate that a similar practice will emerge.

      In the DIFC, ADGM and the UAE, parties generally attach the documentary evidence they wish to rely on to their written pleadings. Following the resolution of any disclosure requests, witness statements and any expert reports will be exchanged. Witnesses and experts then need to attend to be cross-examined under oath. Under the CPC, it is mandatory that witnesses give evidence under oath, so even if the evidence is not contested it is considered prudent to nonetheless hold a hearing so that the witness can make an oath regarding the truth of their witness statement. 

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
    1. Under the DIFC Arbitration Law the tribunal can request assistance from the DIFC court in taking evidence. It is not clear what this may extend to, but it is possible the DIFC court could order a witness to participate or a third party to disclose information.

      Under the UAE arbitral law a tribunal may request the assistance of the domestic courts to obtain evidence or aid in the production of documents from a third party, which may be necessary for determining the dispute before the tribunal.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
    1. Under both the DIFC and UAE arbitral regimes there is no bar to the tribunal ordering parties to disclose documents. The IBA Rules on the Taking of Evidence tend to be used for this purpose.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
    1. Neither the DIFC nor the UAE arbitral regimes make it mandatory to have a final hearing on the merits.

      However, under the UAE arbitral law it is necessary for witnesses to give evidence under oath, so it is prudent to make sure that a hearing takes place even if it is for the sole purpose of having the witness swear an oath as to the truth of a statement previously tendered.

  33. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    1. Yes, under both the DIFC, ADGM and the UAE arbitral regimes hearings and procedural meetings can be conducted elsewhere than the seat. This is, however, unusual and most hearings take place at the seat.

      Under the CPC, the award must be signed in the UAE, otherwise it will be deemed to be a foreign (and not domestic) award, and it may also be seen as a procedural irregularity sufficient for the award to be refused recognition and enforcement  Best practice is for the award to be signed in the UAE, even if that increases the costs or is otherwise inconvenient. 

    Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?
    1. Yes, under both the DIFC and the UAE arbitral regimes the tribunal can decide by majority.

      Under the UAE arbitral law any dissenting opinion should be attached to the award, and if an arbitrator refuses to sign the award this should be stated within the award.

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
    1. The DIFC, ADGM, and the UAE arbitral regimes do not have any explicit restrictions concerning the types of remedies or relief that an arbitral tribunal may grant. However, in the UAE, any orders concerning the registration of property or other rights in a public register would be considered against public policy and unenforceable. It is also unlikely that any award for compound interest would be upheld.

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
    1. Yes, under both the DIFC and the UAE arbitral regimes, dissenting opinions are permitted. Any dissenting opinion should be attached to the award, and if an arbitrator refuses to sign the award this should be stated within the award. The ADGM Arbitration Regulations neither refer to nor preclude dissenting awards. Dissenting opinions are rare but do occur.    

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
    1. Under the DIFC Arbitration Law the award must be in writing and signed by the arbitrators. If any arbitrator refuses to sign this must be stated in the award. The award also needs to state its date and the seat of the arbitration, and to fix the costs of the arbitration. Unless otherwise agreed the award must state the reasons upon which it is based.

      Under the UAE arbitral regime arbitral awards must be made in Arabic unless the parties agree otherwise. They must be signed by a majority of the arbitrators and any dissenting opinions or refusal to sign should be noted within. The award must include the express wording of the agreement in the body of the award and provide a summary of each party’s case and the evidence. It must set out the rationale for the award and the date and place issued. It is also best practice for the terms of reference to be attached to the award, and for the arbitrators to sign the award on every page. The award must also be signed at the seat, since if signed outside this will render the award a foreign award.

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, there is no time limit by which the award must be issued. Once the award is issued, the parties have 30 days in which to request corrections to the award or an additional award. Any application for setting aside the award must be made within three months from the date the award is received. Under the CPC, an arbitral award must be made within six months of the date of the first hearing in the arbitration, unless the parties agree otherwise. Once issued parties must apply to the court for the interpretation or correction of the award (unless the institutional rules provide otherwise). The court may specifically request an arbitrator to deal with omissions from or clarifications to the award, which must be done within three months from receiving the court’s request.

    Costs and interest

  39. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, the tribunal must fix the costs of the arbitration in its award, and these costs include legal costs. The “loser pays” rule is prevalent in the DIFC. Under the CPC, there is no power given to the tribunal to award legal costs (though they do have the power to award tribunal and institutional costs). This means that in the absence of agreement legal costs are not recoverable. In practice, the institutional rules used by parties often allow for the recovery of costs and, if not, the parties both claim them, thereby implicitly giving consent to the tribunal to award costs. It is best practice, however, for the terms of reference prepared during the arbitration to explicitly confer power on the tribunal to award legal costs. This is particularly important in DIAC cases because the courts have held that the DIAC Rules do not themselves confer power on the tribunal to award legal costs. Because legal costs are generally not recoverable before the UAE courts, if the arbitrator is a UAE lawyer most familiar with UAE court practice, the arbitrator may be disinclined to follow the “loser pays” rule. 

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
    1. Under the DIFC Arbitration Law there are no restrictions on claiming interest, or any mandatory or customary rates.

      Under the UAE arbitral law interest can be claimed and it is customary for arbitral tribunals to award between 9 and 12 per cent per annum. It is said that unlike the practice before the UAE courts, tribunals may award compound interest, but this would be unusual and it is possible the UAE courts would refuse to enforce such an award of interest.

    Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
    1. In the DIFC, ADGM and the UAE arbitral awards are final and cannot be appealed.

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
    1. Under the DIFC Arbitration Law an arbitral award can be set aside under the usual Model Law grounds:

      (1) the party applying for the award to be set aside was under some incapacity, or the agreement to arbitrate was not valid, either under the law the parties subjected it to or under DIFC law;

      (2) the party was not given proper notice of the appointment of an arbitrator or of the proceedings or was otherwise unable to present his case;

      (3) the award covers matters outside the scope of reference given to the tribunal (although the rest of the award may be enforced);

      (4) the composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties or with the DIFC law;

      (5) the matter is not arbitral under DIFC or ADGM law;

      (6) the dispute was expressly referred to a different body or tribunal for resolution under DIFC or ADGM law;

      (7) the award is in conflict with the public policy of the UAE.

      Under UAE law awards may be challenged for the following reasons:

      (1) the award was rendered without an arbitration deed or was based on an invalid document;

      (2) the arbitrator was improperly appointed

      (3) the award was issued by one arbitrator in the absence of other members of the tribunal without permission;

      (4) the award was issued out of time;

      (5) an invalidity occurred in the ruling or in the procedures, which influenced the ruling;

      (6) the award relates to a matter that is not capable of being arbitrated; or

      (7) the award is contrary to the public policy of the UAE.

      Under the CPC awards may be challenged for the following reasons:

      (1) the award was rendered without an arbitration deed or was based on an invalid document;

      (2) the arbitrator was improperly appointed; 

      (3) the award was issued by one arbitrator in the absence of other members of the tribunal without permission;

      (4) the award was issued out of time;

      (5) an invalidity occurred in the ruling or in the procedures, which influenced the ruling;

      (6) the award relates to a matter that is not capable of being arbitrated; or

      (7) the award is contrary to the public policy of the UAE.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
    1. Under the DIFC Arbitration Law, there are no restrictions on the parties agreeing to exclude any right of appeal or recourse to the courts, but such clauses have not been tested. Under the ADGM Arbitration Regulations, the parties may expressly waive fully the right to bring an action for setting aside or may limit their right to one or more recourse grounds. Under UAE law, parties cannot agree to waive their right to challenge an award before the award is issued.

    Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
    1. This has not been tested in either the DIFC, ADGM or the UAE. As New York Convention jurisdictions, it is possible that a foreign award would be refused enforcement if it has been set aside by the courts of the seat. The UAE courts tend to be conservative, so a common view is that they would be disinclined to enforce such an award.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
    1. The DIFC courts are supportive of international arbitration and will enforce foreign arbitral awards. Recent judgments have indicated that the DIFC courts are willing to allow the DIFC to be used as a conduit jurisdiction (ie, an award-creditor can have the award recognised in the DIFC even though the debtor has no assets there, so that the creditor can then have it enforced more easily in other parts of the UAE (or the Middle East) as a court judgment). This is so even if the award is a domestic award seated in other parts of the UAE. However, although the DIFC courts see no issue with this, it appears the Dubai courts find it problematic. A Judicial Tribunal has now been set up under Decree 19 of 2016 to deal with issues of jurisdiction between the DIFC and Dubai courts. Although the Judicial Tribunal has only issued a few decisions, they suggest that the DIFC courts should not be assessing the enforceability of UAE-seated arbitral awards, as according to the Tribunal this is something that only the relevant UAE court can do.  

      As regards the UAE, although the UAE signed the New York Convention in 2006, it is only in recent years that foreign arbitral awards have been presented to the courts for enforcement. The courts have been enforcing foreign awards consistent with the New York Convention, but errant judgments (particularly first instance decisions) do sometimes occur. As regards to ADGM, it is too early to comment.

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
    1. UAE state parties are not immune from suit, but they are immune from execution. UAE law prohibits seizing public or private properties owned by the UAE or one of the Emirates for the purpose of enforcement. Debt due from the governments in the UAE, their emanations, or corporations cannot be recovered by a legal process as they are immune from seizure pursuant to article 247 of the Civil Procedures Code. It is difficult to enforce any arbitral award against sovereign assets in the UAE as the UAE courts will not enforce it on public policy grounds. 

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. The DIFC Arbitration Law and ADGM Arbitration Regulations contain a provision stating that all information relating to the arbitral proceedings shall be kept confidential, except where disclosure is required by a court. Under the CPC, there are no provisions providing for the confidentiality of arbitration proceedings. However, in practice, arbitrations in the UAE are treated as private and confidential.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
    1. Under the DIFC Arbitration Law and ADGM Arbitration Regulations, all information relating to the arbitral proceedings is to be kept confidential, and this arguably extends to evidence produced during the process. Under UAE law, there is no presumption that the arbitration process is confidential, and so, unless otherwise agreed by the parties, it is possible that any pleadings and evidence may be used in later proceedings.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
    1. Lawyers operating in the DIFC are subject to the DIFC Code of Best Legal Practice, which was published in March 2013. In the UAE and ADGM, there are no applicable ethical or professional standards, although lawyers working in the UAE must now comply with the 2015 Charter for the Conduct of Advocates and Legal Consultants.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
    1. Practitioners of international arbitration will find the DIFC to be a familiar and supportive seat for arbitration. As regards the UAE, there are some local rules, which, although well known to those practising in the jurisdiction, may catch others unawares. For example, witnesses must be sworn on oath (and sworn in by the tribunal) and the tribunal must sign the award in the jurisdiction for it to be considered a domestic award and avoid a challenge based on procedural irregularity. Any representatives appearing in the arbitration must submit a valid power of attorney, and terms of reference must be prepared even if not mandated by the institutional rules being used. In Dubai, foreign lawyers (be they foreign counsel or tribunal members) should have their details notified to the Dubai Legal Affairs Department. As regards to ADGM, it is too early to comment.

  51. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction?

    1. Third-party funding is permitted but remains rare. The DIFC courts issued a practice direction in 2017 relating to third-party funding, which, among other things, mandates that notice must be served on all other parties should a party enter into a litigation-funding agreement and that costs orders can be made against funders directly if the court deems it appropriate in the circumstances of the case. The ADGM Arbitration Regulations do not refer to third-party funding in arbitral proceedings. UAE law does not prohibit third-party funding in general. UAE permits subrogation of claims by insurers according to article 1030 of the UAE Civil Transaction Code. However, the law prohibits law firms providing funding by way of a contingency-fee agreement.

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?


  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?


  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
  63. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction?