Commercial Arbitration

Last verified on Thursday 2nd April 2020

Commercial Arbitration: United Arab Emirates

Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Al Tamimi & Company

Infrastructure

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

United Arab Emirates

The United Arab Emirates (UAE) acceded to the New York Convention in 2006 by Federal Decree No. 43 of 2006, without making any declarations or reservations. The New York Convention entered into force in the UAE on 19 November 2006. The Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) are also bound by the New York Convention by virtue of the fact that they are part of the UAE.

The DIFC is a financial free zone located in the Emirate of Dubai and established in 2004. The DIFC has its own civil, commercial, and arbitration laws, and largely follows the English common law approach. It also has its own English-language common law courts, the DIFC Courts. The DIFC has been designed to appeal to the international business community.

The ADGM is a financial free zone located in the Emirate of Abu Dhabi and established in 2013. Similar to the DIFC, it also has its own civil and commercial laws (including its own Arbitration Regulations). The ADGM also has its own English-language common law courts, the ADGM Courts. However, unlike the DIFC, the ADGM directly applies English laws, and, as with the DIFC, has been designed to appeal to the international business community.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

United Arab Emirates

The UAE is a party to the following treaties on the recognition and enforcement of arbitral awards: the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 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 Notifications of 1996.

The UAE has entered into bilateral treaties specifically dealing with mutual judicial cooperation (ie, the recognition and enforcement of court judgments and judicial orders, including orders to enforce arbitral awards) with Afghanistan (2009), Algeria (1984), Armenia (2003), Azerbaijan (2007), China (2004), Egypt (2000), France (1992), India (2000), Jordan (1999), Kuwait (2008), Kyrgyzstan (2015), Morocco (2006), Nigeria (2018), 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 a number of states, including Albania (2017), Algeria (2002), Andorra (2017), Armenia (2017), Austria (2003), Azerbaijan (2007), Belarus (2001), Belgium–Luxembourg Economic Union (2007), Belize (2017), China (1994), Comoros (2017), the Czech Republic (1995), Egypt (1999), Estonia (2012), Finland (1997), France (1995), Germany (1999), Greece (2016), Guinea (2014), India (2014), Italy (1997), Jordan (2010), Korea (2004), Lebanon (1999), Malaysia (1992), Mauritania (2016), Mexico (2018), Montenegro (2013), Morocco (2002), Pakistan (1997), Poland (1994), Portugal (2012), Romania (1996), Russia (2013), Serbia (2014), Slovakia (2018), Sweden (2000), Switzerland (1999), Syria (2001), Thailand (2016), Tunisia (1997), Turkey (2011), Turkmenistan (1999), Ukraine (2004), the United Kingdom (1993), Uzbekistan (2008) and Yemen (2001).

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

3. 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?

United Arab Emirates

Arbitration in the UAE is governed by Federal Law No 6 of 2018 on Arbitration (UAE Arbitration Law), which became effective on 16 June 2018. The UAE Arbitration Law largely adopts the UNCITRAL Model Law. It repeals articles 203-218 of the Federal Law No 11 of 1992 on the Civil Procedures Law (CPC), which previously governed arbitration in the UAE.

The UAE Arbitration Law does not apply to the DIFC or the ADGM, where each has its own arbitration law.

Arbitration in the DIFC is governed by DIFC Law No. 1 of 2008 (DIFC Arbitration Law). It is also largely based on the UNCITRAL Model Law.

Arbitration in the ADGM is governed by the Arbitration Regulations 2015 (ADGM Arbitration Regulations), which are also based on the UNCITRAL Model Law but with a number of enhancements.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

United Arab Emirates

The UAE has a number of leading international arbitration bodies.

The Dubai International Arbitration Centre (DIAC) is located in Dubai and is one of the leading arbitration centres in the UAE. The DIAC can act as an appointing authority in arbitration proceedings. The Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) is another popular institution. It remains unclear whether ADCCAC can act as an appointing authority, but there is nothing in the centre’s rules to prevent it from doing so. In addition, the Emirates Maritime Arbitration Centre (EMAC) was launched in 2016. The EMAC can act as an appointing authority in maritime arbitration proceedings. Furthermore, other Emirates (including Sharjah and Ras Al Khaimah) have introduced arbitration centres. The UAE also hosts the International Islamic Centre of Reconciliation and Arbitration. The centre was set up to hear cases governed by Sharia, the Islamic law.

Located in the DIFC, the DIFC-LCIA Arbitration Centre, originally established in 2008, is essentially a joint venture between the DIFC and the London Court of International Arbitration (LCIA). The DIFC-LCIA Arbitration Centre can act as an appointing authority in arbitration proceedings.

The ADGM does not have an institution that administers arbitral proceedings; however, it has established an arbitration centre, the ADGM Arbitration Centre that will facilitate the hearing of arbitrations and offer arbitration and mediation training. The ADGM Arbitration Centre also provides thought leadership, by organising conferences and publishing, for example, ‘Arbitration Guidelines’, which are intended to provide users of arbitration, their counsel, and arbitrators with a set of procedures that they can choose to use in their arbitral proceedings, whether they take place at the ADGM Arbitration Centre or elsewhere.

The International Court of Arbitration of the International Chamber of Commerce (ICC) has a Middle East and North Africa representative office in the ADGM (ICC MENA). The ICC MENA became fully operational in January 2018 and accepts the registration of arbitration cases under the ICC Rules.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

5. Can foreign arbitral providers operate in your jurisdiction?

United Arab Emirates

Yes, foreign institutions can and often do operate in the DIFC, the ADGM and onshore UAE (eg, the LCIA and ICC administer UAE-seated arbitrations). The Court of Arbitration for Sport established an Alternative Hearing Centre in Abu Dhabi.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

United Arab Emirates

The UAE does not have a specialist arbitration court. However, the UAE Arbitration Law designates the UAE Court of Appeal (ie, the federal or local court of appeal, as the case may be) to deal with onshore UAE arbitration matters. In this regard, it should be noted that each of the seven Emirates has the right to choose either to participate in the Federal Judiciary or maintain its own local judicial system. The Emirates of Sharjah, Ajman, Fujairah, and Umm Al Quwain follow the federal judicial system, while those of Abu Dhabi, Dubai, and Ras Al Khaimah maintain their own local judicial system.

Lower level court judges may be less familiar with international arbitration. However, the Court of Cassation judges, the highest level of the onshore UAE Courts, are more knowledgeable and supportive of international arbitration. Recent UAE Court of Cassation judgments demonstrate their support for, and understanding of, international arbitration, but errant judgments are still sometimes issued.

The DIFC and the ADGM do not have a specialist arbitration court. Generally, the DIFC Court and the ADGM Court judges are familiar with and supportive of the arbitration law and the practice of international arbitration. DIFC Court and ADGM Court judges also sit as international arbitrators.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Agreement to arbitrate

7. 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?

United Arab Emirates

Under the DIFC, ADGM and UAE regimes, arbitration agreements can cover future events. The UAE Arbitration Law, DIFC Arbitration Law and ADGM Arbitration Regulations to a great extent 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. The arbitration agreement may also be executed after the dispute arises, subject to the arbitration agreement specifying all matters that will be covered by arbitration. The arbitration agreement must be evidenced in writing. The UAE Arbitration Law provides that this requirement may be fulfilled by an exchange of correspondence (including emails), by reference to an arbitration clause contained in another document and by oral agreement, if made during a court proceeding and recorded in a judgment.

The UAE Arbitration Law provides that a representative of a juridical person must have specific authority to enter into an arbitration agreement. In the case of a limited liability company, the general manager is usually the authorised signatory. In the case of other corporate forms, a specific power of attorney or company authority may be required to confirm that the signatory is duly authorised. As a matter of practice, a party should verify that the other party’s signatory has the necessary power to enter into an arbitration agreement. The UAE Courts tend to be conservative, while arbitration agreements can be incorporated by reference, it is generally advisable that the arbitral clause is explicitly signed by the authorised parties. 

Pursuant to Ministerial Resolution No.406/2 of 2003, UAE governmental bodies may not enter into an arbitration agreement without prior approval from the Cabinet of Ministers.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

8. Are any types of dispute non-arbitrable? If so, which?

United Arab Emirates

Pursuant to the UAE Arbitration Law, non-arbitrable disputes pertain to matters for which conciliation is not possible are not arbitrable. The UAE federal laws clarify these matters to include matters related to public policy, criminal matters and family matters. Also, certain commercial agency and distributorship disputes (see, eg, articles 6–7 of the Federal Law No. 18 of 1981, as amended also known as the UAE Commercial Agency Law) and all labour disputes (see, eg, Federal Law No. 8 of 1980, also known as the UAE Labour Law) may not be resolved through arbitration.

In the past, the Court of Cassation interpreted public policy widely to include all real estate disputes and those concerning the circulation of wealth. However, more recent Dubai and Abu Dhabi court judgments have clarified that such disputes are indeed arbitrable, save for issues concerning registration of property ownership.

The DIFC and the ADGM are also bound by the federal laws of the UAE, save for civil and commercial matters. Therefore, similar to the restrictions in onshore UAE, an arbitration agreement may not be concluded for criminal matters, family matters and public policy matters. Moreover, disputes involving certain types of commercial agencies, distributorship and labour law may not be arbitrable as they fall under the exclusive jurisdiction of the UAE Courts. However, the DIFC Arbitration Law permits arbitration in relation to consumer contracts and employment disputes, where the consumer or employee has provided consent after the dispute has arisen.

The ADGM Arbitration Regulations do not expressly state that certain disputes are non-arbitrable.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

9. 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?

United Arab Emirates

The UAE Arbitration Law permits joinder of a third party to arbitral proceedings upon the request of any original party or third party, provided that the third party is a party to the underlying arbitration agreement.

The DIFC Arbitration Law does not expressly refer to third-party joinder. However, there is nothing in the DIFC Arbitration Law that prevents third-party participation, provided that the parties and the third party agree to such participation. 

The DIFC-LCIA Arbitration Centre’s Arbitration Rules 2016 (DIFC-LCIA Rules) permit third-party joinder, provided that the third party and one of the parties to the arbitration agreement consent to such joinder. It is expected that the third-party joinder would be upheld by the DIFC Courts, since the parties consented to be bound by the DIFC-LCIA Rules. However, it has not been tested to date.  

The ADGM Arbitration Regulations permits third-party joinder of additional parties, provided that the third party has consented to the joinder in writing.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

10. 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?

United Arab Emirates

Neither the UAE Arbitration Law nor the DIFC Arbitration Law expressly addresses the consolidation of separate arbitration proceedings. In practice, however, in onshore UAE-seated arbitrations, it has been possible to consolidate separate arbitration proceedings into one arbitration where the parties have various contracts related to a similar commercial matter, with identical arbitration clauses (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 an arbitral 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.

The ADGM Arbitration Regulations expressly permit the parties to agree (i) to consolidate arbitral proceedings, or (ii) that “concurrent hearings” (ie, hearings held at the same time) are to be held on such terms as they may agree. These consolidation orders will be made without prejudice to the date on which any claim or defence was raised for the purpose of applying any limitation periods or similar rule or provision of law. The arbitral tribunal has no power to order consolidation of proceedings or concurrent hearings, unless the parties agree to confer such power on the arbitral tribunal. 

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

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

United Arab Emirates

UAE law does not recognise provide the "group of companies doctrine". UAE law provides the possibility of piercing the corporate veil in limited situations (ie, fraud). 

UAE law does not recognise the "group of companies doctrine". UAE law provides the possibility of piercing the corporate veil in limited situations (ie, fraud). 

DIFC law applies the English common law principles of corporate personality. Article 9 of the DIFC Law No. 5 of 2018 (ie, DIFC Companies Law) provides in part “A Company incorporated pursuant to article 8(1) shall have a separate legal personality from that of its Shareholders.” The liabilities of a company, whether arising in contract, tort, or otherwise, are the company’s liabilities and not the personal liabilities of any shareholder or member of the company. Accordingly, DIFC law does not recognise the group of companies doctrine. Piercing the corporate veil is available in limited situations.

ADGM law does not recognise the "group of companies doctrine" either. It is likely that the ADGM will be heavily influenced by the English approach to piercing the corporate veil (eg, where the existence of a separate corporate entity is merely a façade), although this has not been tested yet.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

12. Are arbitration clauses considered separable from the main contract?

United Arab Emirates

Yes. Under the UAE, the DIFC, and the ADGM arbitral regimes, arbitration clauses are considered separate from the main contract and may survive termination or invalidation of the main contract.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

13. 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 tribunals jurisdiction and competence?

United Arab Emirates

The principle of competence-competence is recognised in the UAE, the DIFC and the ADGM.

The UAE Arbitration Law permits the arbitral tribunal to rule on its own jurisdiction, including objections in relation to the nullity, non-existence, or expiration of an arbitration agreement. The arbitral tribunal may rule on a plea either as a preliminary question or in a final award. A party may, in the event where the arbitral tribunal rules as a preliminary question that it has jurisdiction, request the competent Court of Appeal to review and make its own determination on the matter within 15 days of notification. The competent Court of Appeal is required to issue its decision within 30 days of the party’s request. The arbitration proceedings have to be stayed pending the judicial decision, unless the arbitral tribunal decides to continue the proceedings upon request of a party.

Similarly, the DIFC Arbitration Law permits the arbitral tribunal to rule on its own jurisdiction, including any objections in relation to the existence or validity of the arbitration agreement. The arbitral tribunal may rule on a plea either as a preliminary question or in an award on the merits. A party may, in the event where the arbitral tribunal rules as a preliminary question that it has jurisdiction, request the DIFC Court of First Instance to review and make its own determination on the matter within 30 days of notification. The parties cannot appeal the decision of the DIFC Court of First Instance. The arbitral tribunal may proceed with the arbitration proceedings and make an award while such a request is pending.

The ADGM Arbitration Regulations provide that, unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, including any objections in relation to the validity of the arbitration agreement, the constitution of the arbitral tribunal, and the matters submitted to arbitration in accordance with the arbitration agreement. The arbitral tribunal may rule on a plea either as a preliminary question or in an award on the merits, subject to the parties’ agreement. A party may, in the event where the arbitral tribunal rules as a preliminary question that it has jurisdiction, request the ADGM Court of First Instance to review and make its own determination on the matter. However, the application must be made with the written agreement of all parties or the permission of the arbitral tribunal and the court is satisfied that the (i) determination is likely to substantially save costs, (ii) the application was made without delay, and (iii) there is a good reason why the ADGM Court of First Instance should decide on the matter. The arbitral tribunal may decide whether to stay the arbitration proceedings pending the result of the judicial review, unless the parties agree otherwise.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

14. 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?

United Arab Emirates

There are a number of issues to note when drafting an arbitration clause in the UAE, including: 

Seat of the arbitration

Where the parties choose the onshore UAE as their seat of arbitration, the parties must expressly state the particular city or Emirate in the arbitration clause (eg, Dubai, United Arab Emirates (excluding the DIFC) or Abu Dhabi, United Arab Emirates (excluding the ADGM)), in order to avoid any doubt as to which court will be the supervisory court.

Similarly, where the parties choose the DIFC as their seat, the parties must expressly state that the seat or legal place is the Dubai International Financial Centre or DIFC in the arbitration clause. The same holds true for the ADGM: where the parties choose the ADGM as their seat, the parties must expressly state that the seat or legal place is the Abu Dhabi Global Market or ADGM in the arbitration clause.

Language of the arbitration

The parties should expressly state the desired language of the arbitration in the arbitration clause, especially where the parties desire to use a language in the arbitration proceedings other than the given default language of the seat.

In onshore UAE arbitration proceedings, the default language is Arabic. In the DIFC and the ADGM arbitration proceedings, the arbitral tribunal determines the language(s) to be used in the absence of the parties’ agreement.

Number of arbitrators

The parties should expressly state their desired number of arbitrators in the arbitration clause (provided it is an odd number of arbitrators), where they do not wish to comply with the default number. In onshore UAE arbitration proceedings, the default number of arbitrators is three. In the DIFC and the ADGM arbitration proceedings, the default number of arbitrators is one.

Confidentiality

The UAE Arbitration Law provides that the arbitration hearings are held at private meetings and the arbitral awards are confidential.

Similarly, the ADGM Arbitration Regulations provides that any information relating to the arbitration proceedings and the awards are confidential. Meanwhile, the DIFC Arbitration Law only provides that all information relating to the arbitration proceedings are confidential (though it is silent on the confidentiality of the award).

However, it is important to note that the UAE, ADGM, and DIFC do not specifically provide for the confidentiality of the pleadings, documents, evidence, or submissions. Where the parties desire to impose additional confidentiality protocols in the arbitration proceedings, they should expressly state such confidentiality protocols in the arbitration clause.

Costs of the arbitration

The parties may expressly state who will bear the arbitration and legal costs in the arbitration clause.

In the UAE and the ADGM, the arbitral tribunal is empowered to order either party to pay all or part of the arbitration expenses (which include fees and other expenses payable to the arbitral tribunal and the expenses incurred to appoint experts). It should be noted, however, that the UAE Arbitration Law does not include legal fees within the definition of the costs of arbitration. The DIFC Arbitration Law provides that the arbitral tribunal shall fix the costs of the arbitration in its award.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

15. 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?

United Arab Emirates

Institutional international arbitration is far more common than ad hoc international arbitration in 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. It is always recommended to use an institution in UAE-seated arbitrations so as to help ensure the establishment of an arbitral tribunal and the support for the process.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

16. 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.

United Arab Emirates

The UAE Arbitration Law does not provide for multi-party arbitrations generally; the parties may resort to the arbitration institution (or the competent UAE Court of Appeal in the absence thereof) in order to determine any procedural issue.

The DIFC Arbitration Law addresses the appointment of the arbitral tribunal in the case of multi-party disputes. The DIFC Court of First Instance may appoint the arbitral tribunal without regard to any party nomination where the parties have failed to agree in writing that the parties represent two separate sides for the formation of the arbitral tribunal as claimant and respondent respectively (eg, multiple claimants will be treated as one claimant and likewise for multiple respondents). In this case, the arbitration agreement will be treated as a written agreement for the appointment of the tribunal by the DIFC Court of First Instance. The award will be enforceable under the New York Convention notwithstanding the fact that the parties had no involvement in the formation of the arbitral tribunal because of their failure to agree on the arbitral tribunal’s appointment. 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 institution or, where there is no such institution, the competent court 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.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Commencing the arbitration

17. 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?

United Arab Emirates

The UAE Arbitration Law provides that the arbitral proceedings commence on the day following the date of the composition of the arbitral tribunal. 

The DIFC Arbitration Law and ADGM Arbitration Regulations provide that the arbitral proceedings commence on the date on which a request for arbitration is received by the respondent.

There are no limitation periods for commencing arbitration under the UAE, the DIFC or the ADGM laws.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Choice of law

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

United Arab Emirates

The UAE Arbitration Law provides that the arbitral tribunal will apply the rules of law agreed on by the parties. Where the parties fail to agree on the substantive law, the arbitral tribunal has the authority to apply the substantive rules of the law it deems most closely connected to the subject matter of the dispute. The arbitral tribunal will, when determining the subject matter of the dispute, take into account the terms of the contract, the subject of the dispute and the nature of the dealings between the parties.

The DIFC Arbitration Law provides that the arbitral tribunal will apply the substantive law agreed on by the parties. Where the parties fail to agree, the arbitral tribunal has the authority to apply the law by considering the conflict of laws rules that it determines as applicable.

The ADGM Arbitration Regulations also provide that the arbitral tribunal will apply the substantive law agreed on by the parties. Where the parties fail to agree, the arbitral tribunal has the authority to decide the dispute in accordance with the rules of law it considers appropriate. The arbitral tribunal, when making its determination, will take trade usages into account.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

United Arab Emirates

The UAE Arbitration Law provides that an arbitrator may not be (i) a minor, (ii) legally incapacitated, or (iii) stripped of his or her civil rights by reason of bankruptcy or criminal conviction. The arbitrator must also be independent and impartial. In addition, the arbitrator cannot be a member of a board of trustees or administrative board of an institution administering arbitrations in the UAE. The UAE Arbitration Law also provides that no arbitrator will be excluded by reason of nationality or gender, unless otherwise agreed by the parties.

The DIFC Arbitration Law and the ADGM Arbitration Regulations provide that the arbitrator must be independent and impartial. Both also provide that no arbitrator will be excluded by reason of nationality, unless otherwise agreed by the parties.

The DIFC Arbitration Law and the ADGM Arbitration Regulations do not provide further limitations in respect of a party’s choice of arbitrator. However, it is prudent to ensure that the arbitrator is not a minor, legally incapacitated, or stripped of his civil rights by reason of bankruptcy or criminal conviction, in order to avoid any enforcement issues at a later stage in the event enforcement is to occur in onshore UAE.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

20. 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?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law and the ADGM Arbitration Regulations do not prohibit non-nationals from acting as arbitrators. Non-nationals can and regularly do act as arbitrators in arbitrations seated in the onshore and offshore UAE.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

21. 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?

United Arab Emirates

The UAE Arbitration Law provides that a party may request the relevant authority, the competent Court of Appeal or arbitral institution as the case may be, to appoint an arbitrator, where either party fails to appoint an arbitrator within 15 days of receipt of the request to do so from the other party, or to appoint a presiding arbitrator where the two-appointed arbitrators fail to one within 15 days from their appointment.

Similarly, the ADGM Arbitration Regulations provide that a party may request the arbitration institution or the ADGM Court of First Instance in the absence thereof or in the case of ad hoc arbitrations to appoint an arbitrator where either party fails to appoint an arbitrator within 30 days of receipt of the request to do so from the other party, or to appoint a presiding arbitrator where the two-appointed arbitrators fail to appoint one within 30 days from their appointment. In addition, in the case of multi-party disputes, such authority may appoint the arbitral tribunal in the absence of a joint nomination and where all parties fail to agree on a method of the arbitrators’ appointment.

The DIFC Arbitration Law provides parties with similar judicial assistance. A party may request the DIFC Court of First Instance to appoint an arbitrator where either party fails to appoint an arbitrator within 30 days of receipt of a request to do so from the other party, or to appoint a presiding arbitrator where the two-appointed arbitrators fail to appoint one within 30 days from their appointment.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

United Arab Emirates

The UAE Arbitration Law makes no provisions for the immunity of arbitrators. However, the UAE law provides that arbitrators are treated as judges and, as such, they are generally immune from suit unless they have acted criminally.

The DIFC Arbitration Law provides that an arbitrator, employee or agent of an arbitrator, arbitral institution, officer of an arbitral institution and appointing authority will not be held liable to any person for any act or omission in connection with an arbitration, unless that person or it is shown to have caused damage by conscious and deliberate wrongdoing. However, this does not affect the liability incurred by an arbitrator by reason of his or her resigning. Where an arbitrator resigns, the arbitrator may request the DIFC Court of First Instance to make an order relieving him of any liability incurred by reason of his or her resignation together with such order as the DIFC Court of First Instance thinks appropriate with respect to his or her entitlement (if any) to fees and expenses, unless otherwise agreed by the parties. The order of the DIFC Court of First Instance is not subject to an appeal.

The ADGM Arbitration Regulations provide that no arbitrator, arbitral institution or appointing authority, or any employee, agent, or officer of the foregoing will be held liable to any person for any act or omission in connection with an arbitration, unless the person is shown to have caused damage by conscious and deliberate wrongdoing.  

In 2016, the UAE passed Federal Law No 7 of 2016, which amended article 257 of the UAE Penal Code to provide that an arbitrator may be punished with imprisonment for issuing a decision “in contravention of the requirements of the duty of neutrality and integrity”. In September 2018, however, the UAE passed Federal Decree-Law No 24 of 2018, which revised article 257 such that it no longer applies to arbitrators; however, the provision still applies to “[a]ny expert, translator or investigator […] who knowingly proves an incident against the truth, or gives false interpretation”.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

United Arab Emirates

The UAE Arbitration Law provides that the arbitral tribunal may refuse to deliver the final award in case of the parties’ failure to settle all the costs of arbitration, while the DIFC Arbitration Law and the ADGM Arbitration Regulations provide that the arbitral tribunal may refuse to deliver a final award or an order for termination of the arbitration proceedings if its fees and expenses are not paid in full. The precise practice and amounts involved will depend on the institutional rules, where applicable, or the discretion of the tribunal itself in ad hoc cases.

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

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Challenges to arbitrators

24. 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?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law, and the ADGM Arbitration Regulations all provide that a party may challenge the mandate of an arbitrator if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence, or if the arbitrator does not possess the qualifications agreed on by the parties or stipulated by law. Under the UAE law, an arbitrator may also be removed if he or she becomes bankrupt or subject to a criminal conviction.

The UAE Arbitration Law provides that the parties may agree on the procedures for challenging an arbitrator. Otherwise, the competent Court of Appeal is to decide on the challenge request within 10 days of receiving the request and such decision is not subject to appeal through any means of recourse. Meanwhile, the arbitral tribunal, including the challenged arbitrator, may continue the arbitration proceedings.

The DIFC Arbitration Law provides that the parties are free to agree on a procedure for challenging an arbitrator. Ultimately, the challenging party may request the DIFC Court of First Instance to decide on the challenge. The decision is subject to no appeal and the arbitral tribunal, including the challenged arbitrator, may continue the arbitration proceedings.

The ADGM Regulations provide that the parties are free to agree on a procedure for challenging an arbitrator. In the absence of an agreement between the parties, the ADGM Court of First Instance is to decide on the challenge. While such a request is pending, the arbitral tribunal may continue the arbitration proceedings.

The IBA Rules Guidelines on Conflicts of Interest in International Arbitration are often taken into consideration in onshore and offshore UAE arbitrations.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Interim relief

25. 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?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law and the ADGM Arbitration Regulations all provide that, unless the parties agree otherwise, the arbitral tribunal has the power to order interim measures that it considers necessary. Interim measures may include orders for security for costs and orders to preserve goods or evidence.

In onshore UAE and the DIFC, the laws provide that the party in whose favour an interim measure has been granted may request the UAE Court of Appeal or the DIFC Court of First Instance, respectively, to enforce the arbitral tribunal’s order, provided that the party obtains written permission from the arbitral tribunal. The ADGM Arbitration Regulations provide that an interim measure is recognised as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the ADGM Court of First Instance irrespective of the country in which it was issued, provided such application is made on notice to all parties to the proceedings. However, the ADGM Court of First Instance may refuse recognition or enforcement of the interim measure on the same ground for refusal of an arbitral award.

The UAE Arbitration Law permits the president of the competent Court of Appeal, upon the request of a party or the arbitral tribunal, to order interim or conservatory measures as deemed necessary for both existing or future arbitral proceedings, whether before or in the course of the arbitration proceedings.

The DIFC Courts have the power to issue interim relief to the same extent as they would for proceedings in the DIFC Courts. The DIFC courts may also issue an anti-suit injunction in favour of an arbitration clause, in order to prevent a party from pursuing a claim before a foreign court.

The ADGM Courts have the power to order interim measures only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

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

United Arab Emirates

The UAE Arbitration Law provides that the arbitral tribunal may order the party requesting an interim measure to provide appropriate security for costs. It also provides that the competent court of appeal may order the party requesting stay of enforcement of an award in annulment proceedings to submit a financial guarantee or security.

The DIFC Arbitration Law provides that the arbitral tribunal may order the party requesting an interim measure to provide appropriate security for costs, including security for the legal or other costs of any other party by way of deposit or bank guarantee or in any other manner and upon such terms as the tribunal considers appropriate. The DIFC Arbitration Law also provides that the DIFC Court of First Instance may, upon an application for the recognition or enforcement of an award, order a party to provide appropriate security for costs.

The ADGM Arbitration Regulations provide that, unless otherwise agreed by the parties, the arbitral tribunal is empowered to order the claimant to provide security for the costs of the arbitration; however, such power cannot be exercised on the ground that the claimant is a resident outside the ADGM or a corporation or association incorporated, formed, or managed and controlled outside the ADGM. In addition, the arbitral tribunal may order the party requesting an interim measure to provide appropriate security for costs. Also, the ADGM Arbitration Regulations provide that, upon an application for recognition and enforcement of the interim award, the ADGM Court of First Instance may, if it considers appropriate, order the requesting party to provide appropriate security if the tribunal has not already made a determination with respect to security for costs or where such a decision is necessary to protect the rights of third parties. The ADGM Arbitration Regulations also provide that the ADGM Court of First Instance may, upon an application for the recognition or enforcement of an award, order a party to provide appropriate security for costs.

At the enforcement stage, the onshore UAE courts are likely to enforce an order for security for costs made by an arbitral tribunal. There is nothing in the UAE law that prevents enforcement of such an order, since it is not deemed to be against public policy or Sharia.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Procedure

27. 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)?

United Arab Emirates

The UAE Arbitration Law provides that the parties may agree on the procedures that the arbitral tribunal will adopt to proceed with the arbitration. However, in the absence of the parties’ agreement, the arbitral tribunal may determine the procedures it deems appropriate, provided that the adopted procedures do not conflict with the fundamental principles of litigation and international agreements to which the UAE is a party.

The Parties may retain outside counsel or be self-represented.

In addition, the UAE Arbitration Law does not expressly require witnesses and experts to testify under oath. However, it states that the arbitral tribunal must conduct the hearings of witnesses and experts “according to the applicable laws in the” UAE, unless the parties agree otherwise. UAE Federal Law No. 10 of 1992 on Evidence in Civil and Commercial Transactions provides that witnesses are required to testify under oath. Therefore, unless the parties expressly agree otherwise, it is prudent that the parties continue to comply with the requirement of witnesses and experts testifying under oath. It remains to be seen how the onshore UAE Courts will interpret and apply this provision.

The DIFC Arbitration Law and the ADGM Arbitration Regulations both provide that the parties are free to agree on the procedures to be followed by the arbitral tribunal, which, in the absence of such agreement, may conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

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

United Arab Emirates

The UAE Arbitration Law and the DIFC Arbitration Law provide that, unless otherwise agreed by the parties, if the respondent fails to communicate its statement of defence, the arbitral tribunal must continue the arbitration proceedings. Similarly, in the event of a party’s failure to appear at a hearing or to produce documents, the arbitral tribunal may continue the arbitration proceedings.

The ADGM Arbitration Regulations provide that, unless otherwise agreed by the parties, if a party fails to attend or be represented at an oral hearing or, where matters are to be dealt with in writing, to submit written evidence or make written submissions, the arbitral tribunal may continue the arbitration proceedings.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

29. 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?

United Arab Emirates

The UAE Arbitration Law provides that the arbitral tribunal has discretionary power to determine the applicable rules of evidence and the extent of admissibility, relation, or evaluation of the evidence. The DIFC Arbitration Law and the ADGM Arbitration Regulations provide that the arbitral tribunal has the power to determine the admissibility, relevance, materiality, and weight of any evidence. The IBA Rules on the Taking of Evidence in International Commercial Arbitration are widely used and followed in onshore and offshore UAE arbitrations.

Under the UAE, the DIFC, and the ADGM arbitral regimes, parties usually include the documentary evidence on which they wish to rely in their written pleadings. The parties will later exchange witness statements and expert reports following the resolution of disclosure requests. The witnesses and experts may be required to attend hearings to be cross-examined.

In the UAE, there are two principal ways for parties to admit evidence. One way is for the submission of memorials, where the parties attach the witness statements, expert reports, documentary evidence, and all other supporting documents along with their pleadings. Alternatively, parties may use the English approach, where the exchange of documentary evidence comes at a later stage of the arbitration (ie, not attached to the party’s pleadings).

During onshore UAE arbitral proceedings, it is prudent that the parties continue to comply with the requirement of witnesses and experts to testify under oath, unless the parties agree to dispense with this requirement.

Presently, there are no restrictions under UAE law to use of what is often referred to as “soft law” in arbitration proceedings. To date, however, there has not been any notable uptake in the use of the Prague Rules in the arbitral proceedings based in the UAE.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

United Arab Emirates

The UAE Arbitration Law provides that only the arbitral tribunal, either on its own motion or upon a party’s request, may seek assistance of the competent Court of Appeal in taking evidence. The court may execute the request and require the attendance of witnesses before the arbitral tribunal to submit and give oral testimony or to present the documents or any evidence thereof.

The DIFC Arbitration Law and the ADGM Arbitration Regulations provide that the arbitral tribunal or a party with the approval of the arbitral tribunal may request assistance from the competent court (ie, DIFC Court of First Instance or ADGM Court of First Instance, respectively) in taking evidence.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

United Arab Emirates

Under the DIFC, ADGM and UAE arbitral regimes, the arbitral tribunal is not barred from ordering parties to disclose documents. Tribunals tend to refer to the IBA Rules on the Taking of Evidence in International Commercial Arbitration for guidance on document production issues.

The UAE Arbitration Law provides that the president of the competent Court of Appeal may order a third party to produce a document in its possession that may be significant to resolving the dispute.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

32. Is it mandatory to have a final hearing on the merits?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law and the ADGM Arbitration Regulations do not make it mandatory to have a final hearing on the merits. 

With respect to onshore arbitration, the arbitral tribunal may decide whether or not to hold a hearing, unless otherwise agreed by the parties. However, the UAE Arbitration Law states that hearings of witnesses and experts must be conducted in accordance with the laws of the UAE, unless otherwise agreed by the parties. UAE Federal Law No. 10 of 1992 on the Issuance of the Evidence Act for Civil and Commercial Transactions provides that witnesses are required to testify under oath. Therefore, and unless otherwise agreed by the parties, it is necessary for the parties to ensure that a hearing takes place even if it is for the sole purpose of having the witness(es) swear an oath as to the truth of their statements.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

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

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law, and the ADGM Arbitration Regulations all provide that, unless otherwise agreed by the parties, the arbitral tribunal may hold hearings and procedural meetings in any location it considers appropriate. However, this is relatively unusual and most hearings take place at the seat of arbitration.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Award

34. Can the tribunal decide by majority?

United Arab Emirates

The UAE Arbitration Law provides that, unless otherwise agreed by the parties, any decision in the arbitration proceedings shall be made by a majority. The president of the arbitral tribunal is to render the award if the award is not signed by the majority of the arbitrators unless otherwise agreed by the parties. When this occurs, the dissenting reasons must be written or attached and will be deemed as an integral part of the award.

The DIFC Arbitration Law provides that, unless otherwise agreed by the parties, an arbitral tribunal can decide a case by majority. However, the president of the arbitral tribunal may solely decide on questions of procedure, if so authorised by the parties or all members of the tribunal.  

The ADGM Arbitration Regulations provide that, unless otherwise agreed by the parties, an arbitral tribunal can decide a case by majority. However, the president of the arbitral tribunal may solely decide on questions of procedure, if so authorised by the parties or all members of the tribunal. The president of the arbitral tribunal may also issue the award where there is no majority.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

United Arab Emirates

The UAE Arbitration Law and the DIFC Arbitration Law do not have any express limitations on the types of remedies or relief that an arbitral tribunal may grant. The ADGM Arbitration Regulations provide that, subject to any contrary agreement by the parties, the arbitral tribunal has the power to grant any remedy permitted under the substantive law governing the claim for which the remedy is sought. Subject to any contrary provision of such law and unless otherwise agreed by the parties, the arbitral tribunal has the same powers as the court, in particular, to order a party to do or refrain from doing anything.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

United Arab Emirates

The UAE Arbitration Law provides that where the president of the arbitral tribunal issues an award that is not signed by the majority, dissenting opinions must be written in or attached to the award. Dissenting opinions are considered to be an integral part of the award.

The DIFC Arbitration Law provides that the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated. 

The ADGM Arbitration Regulations neither refer to nor preclude dissenting opinions.

Dissenting opinions are rare, but do occur in the UAE.  

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

United Arab Emirates

The UAE Arbitration Law provides that an award must be in writing and signed by the majority of all members of the arbitral tribunal. Any dissenting opinions must be included within the award and they are deemed to be an integral part of it. Where an arbitrator does not sign the award, the arbitral tribunal must include the reason for such omitted signature in the award. The arbitral tribunal must also include the reasons on which the award was based, unless otherwise agreed by the parties. The arbitral tribunal must include information about the parties (ie, names and addresses) and the arbitrators (ie, names, nationalities and addresses), a copy of the arbitration agreement, a summary of the claims, statements, documents, and the operative part of the award, and the date and place the award was issued. While the UAE Arbitration Law does not require this, it is best practice for the arbitral tribunal to attach any terms of reference to the award.

The DIFC Arbitration Law provides that the award must be made in writing and signed by the arbitral tribunal. Where there is more than one arbitrator, the signatures of the majority suffice, provided that the reason for any omitted signature is stated. Unless otherwise agreed by the parties, the award must state the reasons upon which it is based. The award must state it’s the date on which it was rendered by the tribunal and the seat of the arbitration. The arbitral tribunal must also fix the costs of the arbitration in the award.

The ADGM Arbitration Regulations provide that the award must be made in writing. The award must state the reasons on which it is based, unless otherwise agreed by the parties. The award must also state the date on which it was rendered by the tribunal and the seat of the arbitration. The arbitral tribunal must also fix the costs of the arbitration in the award.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

38. 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?

United Arab Emirates

The UAE Arbitration Law provides that an arbitral tribunal must issue its final award within the time limit agreed upon by the parties. Where the parties fail to agree on a time limit, the arbitral tribunal must issue the award within six months from the date of the first hearing of the arbitration. The arbitral tribunal may extend this time limit by an additional six months, unless otherwise agreed by the parties. The tribunal or either party may request the Court of Appeal to grant further time as necessary.

The UAE Arbitration Law provides that, within 30 days of the receipt of the award, the parties can request the arbitral tribunal to interpret the award, correct material errors in the award, or issue an additional award.

The DIFC Arbitration Law and the ADGM Arbitration Regulations do not proscribe any time limits for an arbitral tribunal to issue its award. They provide that the parties can request the arbitral tribunal, within 30 days of the receipt of the award unless otherwise agreed by the parties, to correct or interpret the award or to issue an additional award.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Costs and interest

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

United Arab Emirates

The UAE Arbitration Law provides that an arbitral tribunal must assess the costs of the arbitration, unless the parties agree otherwise. The arbitral tribunal may issue cost orders against a party (eg, the fees and expenses incurred by arbitrators or the costs for tribunal-appointed experts). Under the UAE Arbitration Law, however, legal fees are not considered as part of the costs of arbitration. To the extent parties wish to recover legal fees, they must agree to give the arbitral tribunal the power to award legal fees as part of the arbitration costs. The ‘loser pays’ rule is often applied in UAE arbitrations.

The DIFC Arbitration Law and the ADGM Arbitration Regulations provide that the arbitral tribunal must fix the costs of the arbitration in the award including those for legal representation and assistance of the successful party. The ‘loser pays’ rule is common in DIFC arbitrations.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

United Arab Emirates

The UAE Arbitration Law does not provide for interest on the award. However, parties may claim interest on the award on the basis of UAE Federal Law No 18 of 1993 Issuing the Commercial Transactions Law, which provides that interest is calculated on the basis of the agreed rate until full settlement, where the contract stipulates the rate of interest and the debtor delays payment. The interest must be paid at the end of the year (if the debt is for one year or more) or on the maturity date of the debt (if the debt period is less than one year), unless otherwise followed by the commercial or banking practice.

Generally, arbitral tribunals may award between 9 and 12 per cent per annum calculated on simple interest. In relation to compound interest, an arbitral tribunal is not prohibited from awarding such interest to the parties. However, the UAE Courts may, in some cases, refuse the enforcement of such an award of compound interest at the enforcement stage. In the past, there have been contradicting judgments between the UAE Federal Courts and the Dubai Courts in regard to compound interest. On the one hand, the Union Supreme Court held that compound interest is not acceptable and regards such an interest structure as null and void (Union Supreme Court case 130/19). On the other hand, the Dubai Court of Cassation allowed compound interest as long as it is calculated at the agreed or prevailing market rate. The Dubai Court of Cassation stated that interest is calculated as compound interest in respect of the period prior to closing a current account and as simple interest thereafter (Dubai Court of Cassation judgment 46/1992). The DIFC Arbitration Law does not provide restrictions on claiming interest, or any other mandatory or customary rates.

The ADGM Arbitration Regulations provide that an arbitral tribunal may award simple or compound interest for any period up to the date of the award, or up to the date of payment and/or from the date of the award until payment.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

United Arab Emirates

The UAE Arbitration Law provides that an award is binding to the parties and has the force of res judicata. The DIFC Arbitration Law similarly provides that an award is recognised as binding within the DIFC, and the ADGM Arbitration Regulations likewise provide that an award is final and binding on the parties. None of the three provides for any appeal mechanism.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

42. Are there any other bases on which an award may be challenged, and if so what?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law, and the ADGM Arbitration Regulations set forth limited grounds for setting aside arbitral awards.

The UAE Arbitration Law largely tracks the grounds for setting aside an award that are contained in the UNCITRAL Model Law with some additions. The UAE Arbitration Law requires the applicant for annulment to furnish proof that one or more of the following grounds applies: (i) invalidity of the arbitration agreement; (ii) incapacity of a party at the time of conclusion of the arbitration agreement; (iii) legal inability of a party to act; (iv) breach of a party’s ability to present its case; (v) non-application of the substantive law chosen by the parties; (vi) non-compliance with the parties agreement or the provisions on composition of the arbitral tribunal; (vii) procedural irregularities; and (viii) decisions outside the terms of the submission to arbitration. The UAE Arbitration Law provides for further grounds which may be observed by the competent Court of Appeal ex officio: (i) non-arbitrability; and (ii) conflict with the public policy.

The DIFC Arbitration Law and the ADGM Arbitration Regulations both track the grounds for annulment set forth in the UNCITRAL Model Law. Thus, the DIFC Arbitration Law requires the applicant for annulment to furnish proof that one or more of the following grounds applies: (i) incapacity of a party or invalidity of the arbitration agreement; (ii) lack of proper notice or breach of a party’s ability to present its case; (iii) decisions outside the terms of the submission to arbitration; and (iv) irregularities in the composition of the arbitral tribunal or the arbitral procedure. It further provides that an award may be set aside if the DIFC Courts find that (i) the subject-matter is not arbitrable; (ii) the dispute is expressly referred to a different body; or (iii) the award is in conflict with the public policy.

Likewise, the ADGM Arbitration Regulations require the applicant for annulment to furnish proof that one or more of the following the grounds applies: (i) incapacity of a party; (ii) invalidity of the arbitration agreement; (iii) lack of proper notice or breach of a party’s ability to present its case; (iv) decisions outside the terms of the submission to arbitration; (v) irregularities in the composition of the arbitral tribunal or the arbitral procedure; and (vi) non-binding nature of an award or award set aside or suspended. An award may also be set aside if the ADGM Courts find that (i) the subject matter is not arbitrable, or (ii) the recognition or enforcement of it would be contrary to the public policy.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

43. 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?

United Arab Emirates

The UAE Arbitration Law provides that the parties cannot waive the right to invoke the nullity of an award.

The DIFC Arbitration Law does not proscribe restrictions on the parties agreeing to exclude any right of appeal or recourse to the courts. However, such clauses have not been tested.

The ADGM Arbitration Regulations provide that 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.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

United Arab Emirates

This has not been tested in the UAE, DIFC or ADGM. As a New York Convention jurisdiction, 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 an award that has been set aside at the seat.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

United Arab Emirates

As regards the UAE, although the UAE signed the New York Convention in 2006, it is only in recent years that foreign 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 occur sometimes.

As regards the DIFC, the DIFC Courts are supportive of international arbitration and will enforce foreign arbitral awards. The past use of the DIFC as a conduit jurisdiction (ie, the practice of an award creditor having the award recognised in the DIFC (even though the debtor has no assets there) in order for the creditor to enforce the award more easily as a court judgment in other parts of the UAE or the Middle East) seems to be eroding. A Joint Judicial Committee (JJC) was set up, under Decree No. 19 of 2016, to deal with issues of jurisdiction between the DIFC and Dubai courts. The JJC has issued a number of decisions, which suggest that the DIFC Courts may not entertain applications for the enforcement of UAE-seated awards. According to the JJC, this is something that only the competent UAE Courts can do. In another decision, the JJC blocked the DIFC Courts from recognising and enforcing a London-based arbitration decision where the debtor had previously initiated an action with a dispute-resolution centre of the Dubai Courts. In late 2019, however, the JJC issued a judgment lifting the stay in DIFC court proceedings concerning enforcement of a Singapore Supreme Court’s judgment ruling that “the case that the proceedings in the DIFC Court should be left to take their course is overwhelming” and, therefore, dismissing the claims that the Dubai court, and not the DIFC court, should have general jurisdiction over matters pertaining to enforcement of foreign judgments.

As regards to ADGM, it is too early to comment.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

United Arab Emirates

Under UAE law, 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 CPC. It will thus be difficult to enforce an award against sovereign assets in the UAE as the UAE Courts will not enforce it on public policy grounds. 

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

United Arab Emirates

The UAE Arbitration Law provides that arbitration hearings and arbitral awards are confidential, unless otherwise expressly agreed on by the parties. However, the UAE Arbitration Law permits the publication of judicial judgments that include the arbitration award.

The DIFC Arbitration Law provides that, unless otherwise agreed by the parties, all information relating to the arbitration proceedings are confidential, except where disclosure is required by an order of the DIFC Courts.

The ADGM Arbitration Regulations provide that any information relating to the arbitration proceedings or awards are not to be published, disclosed, or communicated to any third party, unless otherwise agreed by the parties. However, the ADGM Arbitration Regulations also make exceptions for instance, if a party makes the publication, disclosure, or communication to protect or pursue a legal right or interest of itself in legal proceedings.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

48. 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)?

United Arab Emirates

The UAE Arbitration Law provides that an arbitral tribunal may, unless otherwise agreed by the parties, decide whether to conduct oral hearings to present evidence and oral arguments. The arbitral tribunal will hear witness and expert testimony in accordance with the laws of the UAE, unless otherwise agreed by the parties. The arbitral tribunal is empowered to determine the rules of evidence that will govern the admissibility, relevance or weight of the evidence submitted. The arbitral tribunal may also determine the time, manner and form in which the parties will exchange evidence. The arbitral tribunal may order the translation of the evidence. The arbitral proceedings will remain confidential, unless otherwise agreed by the parties. 

The DIFC Arbitration Law provides that the arbitral tribunal may, unless otherwise agreed by the parties, decide whether to conduct oral hearings to present evidence and oral arguments. The arbitral tribunal is empowered to determine the admissibility, relevance or weight of the evidence submitted. The arbitral tribunal may order the translation of the evidence. The arbitral tribunal or a party, with the approval of the arbitral tribunal, may request the assistance of the DIFC Court of First Instance in taking evidence. Unless otherwise agreed by the parties, all information relating to the arbitral proceedings will remain confidential except where disclosure is required by an order of the DIFC Court of First Instance.

The ADGM Arbitration Regulations provide that the arbitral tribunal may, unless otherwise agreed by the parties, decide whether to conduct oral hearings to present evidence and oral arguments. The arbitral tribunal is empowered to determine the admissibility, relevance or weight of the evidence submitted. The arbitral tribunal may order the translation of the evidence. The arbitral tribunal or a party, with the approval of the arbitral tribunal, may request the assistance of the ADGM Court of First Instance in taking evidence. Unless otherwise agreed by the parties, all information relating to the arbitral proceedings will remain confidential, and this arguably extends to evidence produced during the process.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

United Arab Emirates

In onshore UAE, the UAE Arbitration Law provides that the Minister of Economy will issue a code of professional conduct for arbitrators that will be discussed with arbitration institutions in the UAE.

In the DIFC, lawyers who appear before the courts are subject to the DIFC Courts' Code of Best Legal Professional Practice. While it is not applicable to lawyers appearing in arbitration proceedings, there is nothing that precludes it from being adopted by the parties and the arbitral tribunal. 

In the ADGM, there are no applicable ethical or professional standards.

Lawyers in the UAE (including the DIFC and the ADGM) must comply with the UAE's 2015 Charter for the Conduct of Advocates and Legal Consultants.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

50. 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?

United Arab Emirates

As regards onshore UAE, there are some local rules that might seem unfamiliar to international arbitration practitioners. For example, the legal representatives appearing in the arbitration must usually submit a valid power of attorney. Also, it is prudent for the arbitral tribunal and parties to ensure that the witnesses and experts testify under oath (or expressly agree otherwise). Furthermore, in Dubai, foreign counsel and foreign arbitrators should notify their details to the Dubai Legal Affairs Department.

As regards the DIFC, international arbitration practitioners find it to be a familiar and supportive seat. As regards the ADGM, it is too early to comment.

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

United Arab Emirates

The UAE Arbitration Law, the DIFC Arbitration Law and the ADGM Arbitration Regulations do not provide for third-party funding in arbitral proceedings. 

The UAE permits subrogation of claims by insurers (article 1030 of the UAE Federal Law No. 5 of 1985 on the Civil Transactions Law). However, the laws of the UAE prohibit law firms providing funding by way of a contingency fee agreement.

Offshore, the ADGM enacted Litigation Funding Rules, which apply to ADGM arbitration and ADGM litigation proceedings. The rules focus on certain fundamental issues, such as qualifying requirements for third-party funders, financial and other interests in third-party funders, litigation funding arrangements and conflicts of interest.

Practice Direction No. 2 of 2017 on Third Party Funding in the DIFC Courts (the Direction) permits third-party funding in the DIFC Courts, subject to certain requirements, including a notice requirement where the funded party is required to notify every other party to the proceedings of the identity of the funder and the fact that a litigation funding agreement has been entered into.

Neither the Direction nor the DIFC Arbitration Law expressly regulate third-party funding in DIFC-seated arbitrations. Notwithstanding this, it is our view that the DIFC’s friendly approach to third-party funding implies that such an arrangement should not be an issue in and of itself (although parties ought to take care to consider its impact on the enforcement of any resulting award, including the effect of the disclosure or non-disclosure of such arrangements, as the case may be).

Answer contributed by Thomas Snider, John Gaffney , Sergejs Dilevka and John Gaffney

Get unlimited access to all Global Arbitration Review content