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Commercial Arbitration

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United Arab Emirates

Robert Karrar-Lewsley
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 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 law), 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.

      This questionnaire will address the DIFC and the UAE jurisdictions. It does not address the ADGM regime because, although a promising jurisdiction with an UNCITRAL model law and (what are expected to be) competent arbitration-friendly courts, it is still new and has not had the time to properly establish itself.

      As regards the New York Convention, the UAE acceded to the New York Convention in 2006 without making any declarations or reservations. The DIFC is also a party to the New York Convention by virtue of the fact that it is 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, and by extension the DIFC, 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 more than 40 bilateral investment treaties (BITs) with the following countries: Algeria (2002), Austria (2002), Azerbaijan (2007), Belarus (2001), Belgium-Luxembourg Economic Union (2005), China (1994), the Czech Republic (1995), Egypt (1998), Finland (1997), Germany (1998), Italy (1995), Jordan (2009), Korea (2004), Lebanon (1998), Malaysia (1992), Mongolia (2002), Morocco (1999), Pakistan (1996), Poland (1994), Romania (1996), South Korea, Sudan (2002), Sweden (2000), Switzerland (1999), Syria (1999), Tajikistan (2000), Tunisia (1997), Turkey (2006), Turkmenistan (1999), Ukraine (2004), United Kingdom (1993), United States of America (1992), Uzbekistan (2008), Vietnam (2009), 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 has an Arbitration Law (DIFC Law No.1 of 2008) that is based on the UNCITRAL Model Law and will be familiar to the international community.

      The UAE does not have a free-standing arbitration law. Arbitrations are governed by the UAE Federal Law on Civil Procedure 1992, which contains a chapter on arbitration (articles 203–218). This law does not conform to the UNCITRAL Model Law.

  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. Located in the DIFC is the DIFC-LCIA, which is essentially a branch of the LCIA in London and like the LCIA will act as an appointing authority. In 2014 a law was issued creating a Disputes Resolution Authority in the DIFC, comprising of the pre-existing DIFC Courts and a new entity named the DIFC Arbitration Institute. It is currently not clear whether the DIFC Arbitration Institute will administer arbitrations but it seems likely that it will do so, along with other functions such as arranging education programmes on arbitration.

      The main arbitration centre in the UAE is the widely used Dubai International Arbitration Centre (DIAC). This centre will act as an appointing authority.

      Abu Dhabi also has its own centre, the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC), which issued a 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.

      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. The newest institution is the Emirates Maritime Arbitration Centre, based in Dubai.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. Yes, in both the DIFC and the UAE foreign institutions can operate. 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. Neither the DIFC nor the UAE has a specialist arbitration court.

      Generally the judges who sit in the DIFC courts are familiar with the law and practice of international arbitration and are supportive of it, and many of the judges sit as international arbitrators (such as Chief Justice Michael Hwang SC).

      The UAE courts are less familiar with international arbitration. The courts in the UAE are civil law courts with a weak system of precedent. First instance judges may have little or no familiarity with international arbitration, but the highest court (the Court of Cassation) contains judges who are more knowledgeable. Recent Court of Cassation judgments demonstrate that the 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 both the DIFC and the UAE regimes arbitration agreements can cover future events.

      The DIFC arbitration law follows the 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 UAE arbitration law arbitral agreements must be in writing and signed by a person authorised to bind the company to arbitration. For an LLC 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 check 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 so that although arbitral agreements can be incorporated by reference, it is generally advised 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 does not explicitly state that certain disputes are non-arbitral, but since DIFC Arbitration Law only covers civil and commercial matters it can be presumed that criminal and family matters cannot be arbitrated. As regards consumer contracts and employment disputes, the 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.

      Under UAE law, disputes involving commercial agency, 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 judgement that seemed to interpret public policy extremely widely to include all real estate disputes and disputes concerning the circulation of wealth. However recent judgements in both Dubai and Abu Dhabi have clarified that such disputes can generally be arbitrated, save for issues concerning registration of ownership.

  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. Neither DIFC law nor UAE law explicitly refers to the participation of third parties in arbitration, although generally both regimes 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. Neither the DIFC Arbitration Law nor UAE law 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 (e.g., 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 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 will be heavily influenced by the English approach to piercing the corporate veil (i.e., 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 (i.e., fraud), it is extremely rare.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. Yes, under both the DIFC and UAE arbitral regimes it is the case that 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 both the DIFC 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. 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 state “the seat or legal place is the Dubai International Financial Centre”, since a mere reference to “Dubai” is ambiguous.

      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 is to be the seat, it is advisable for this to be stated as “Dubai (excluding the DIFC)” 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 arbitration proceedings are deemed to be confidential, no such blanket confidentiality provision exists under UAE law. 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 includes 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 (please 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 avoid having to involve the local courts.

       

  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 UAE regime does not address multi-party arbitrations, but in the absence of an institution any problems encountered in constituting the tribunal will need to be referred to the local court to be dealt with. The result will likely be the same as in the DIFC regime (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 an arbitration commences 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, nor any 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, if the parties have not agreed the substantive law then the tribunal shall apply the law determined by the conflict of laws rules that it considers applicable.

      Under UAE arbitration law 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 UAE law 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 there is no restriction on who can sit as arbitrator, and the parties can agree to exclude people of a particular nationality if they wish. Arbitrators must, however, be independent and impartial.

      Under the UAE arbitral law 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.

  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. In the DIFC the Arbitration Law specifically allows the DIFC courts to assist with the appointment of an arbitrator where for some reason the parties are unable to get the tribunal constituted.

      Likewise, under the UAE arbitral law 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 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.

  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.

      The UAE law is silent on this issue.

      The main institutions in the UAE and the DIFC (that is the DIAC, ADCCAC, and the DIFC-LCIA) will ensure that at least some (if not all) the fees for the arbitration are paid in advance.

    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 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 UAE arbitral law, 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 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 DIFC courts to enforce any such order. The DIFC courts themselves also have the power to issue interim relief, the same as they would for proceedings in the DIFC courts. This also includes orders to preserve goods or evidence or that one party pay security for costs.

      Under the UAE arbitral law 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.

  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, both tribunals and the DIFC courts can make orders for security for costs, although this is rare.

      Under the UAE arbitral law no such orders are available. Even if the parties conferred such a power to the tribunal and the tribunal granted such an order, it is unlikely that the order would be enforced by the local court.

    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 the tribunal has procedural freedom, but parties must be treated with equality and be given a full opportunity to present their case.

      Under the UAE arbitral law 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 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 Commercial 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. Parties generally attach the documentary evidence they wish to rely on to their statements of case. 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 UAE arbitral law 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 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 UAE law 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. Neither the DIFC nor the UAE arbitral regimes 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.

      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 there is no time limit by which the award must be issued, but once 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 UAE law, 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 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 UAE Arbitral Law there is no power given to the tribunal to award legal costs (though they do have the power to award the costs of the tribunal and any institution used). This means that in the absence of agreement legal costs are not recoverable. In practice the institutional rules used by parties 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. The “loser pays” rule is prevalent in the UAE but not ubiquitous. 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 both the DIFC 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 law; (6) the dispute was expressly referred to a different body or tribunal for resolution under DIFC 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; (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 UAE arbitration 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 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.

      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 under the New York Convention, but errant judgments (particularly first instance decisions) do still sometimes occur.

  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. There is no state immunity in either the DIFC or the UAE, both for foreign states and the domestic emirates. Some emirates do require that notice be served on their legal affairs departments before commencing arbitration, and consent for the arbitration to proceed is routinely granted.

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. The DIFC Arbitration Law contains a provision stating that all information relating to the arbitral proceedings shall be kept confidential, except where disclosure is required by the DIFC court.

      Under UAE arbitration law 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, 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 generally there are no applicable ethical or professional standards, although lawyers working in Dubai 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

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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 Commercial 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?