United Arab Emirates

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Last year was an important year for UAE arbitration.

The long-awaited UAE Federal Arbitration Law has finally been implemented, heralding a much-needed overhaul of UAE arbitration legislation. The previous risk of criminal proceedings against arbitrators and party-appointed experts has also been removed giving relief to the arbitration community. Further developments in the Abu Dhabi Global Market (ADGM) see it moving to the fore as a regional arbitration seat and some clarification of the Joint Judicial Tribunal’s role has been welcomed in Dubai.

The New Federal Arbitration Law

After many years in the planning, 2018 finally saw the publication of the new Federal Arbitration Law[1] (the New Law) in the UAE, coming into force on 16 June 2018.[2] It replaces the previous provisions governing UAE-seated arbitrations that were found in articles 203 to 218 of the Civil Procedures Code (the CPC) (UAE Civil Procedures Law No. 11 of 1992).[3] The New Law governs all existing arbitrations with a seat in onshore UAE (even if started before the New Law came into force), but does not apply to arbitrations seated offshore either in the Dubai International Financial Centre (DIFC) or in the ADGM, which will continue to be governed by the DIFC Law No. 1 of 2018 (the DIFC Arbitration Law) and the Arbitration Regulations 2015 (the ADGM Arbitration Regulations) respectively.[4]

The New Law is largely based on the UNCITRAL Model Law (as are the DIFC Arbitration Law and the ADGM Arbitration Regulations) and hence brings the UAE’s onshore arbitration law in line with its offshore laws and modern global arbitration practice. It is worth looking in some detail at a number of the articles in the New Law to examine how it differs from the previous law under the CPC.

First, the formalities of an arbitration agreement. An arbitration agreement can now be concluded through an exchange of correspondence (including emails) or by reference to an agreement in another document,[5] whereas previously the UAE courts had held that an arbitration agreement clause itself needed to be signed.[6], [7] The New Law has, unfortunately, not removed the need for the signatory to have specific authority to bind the company to arbitration.[8] The position therefore remains that, for a limited liability company, the CEO[9] or general manager has deemed authority to sign an arbitration agreement,[10] but in relation to a public joint-stock company, either the articles of association must provide the board of directors with specific authority or the company must pass a special resolution to grant the director specific authority.[11] In relation to a foreign company, the laws of the state where the company is constituted will govern the question of authority of its representatives.

Elsewhere, an important improvement in the New Law provides that the arbitral tribunal now has the express power to decide on its own jurisdiction.[12] The tribunal’s decision on this issue can either be made as a result of a preliminary question or as part of its final award. If it is the former, then a party may appeal that decision to the local Court of Appeal, which must issue its ruling within 30 days.

There are also several provisions that modernise the practicalities of the arbitration hearing itself. Hearings can now be held using video conference facilities thereby avoiding the need for all the parties, lawyers, witnesses and experts to be physically present in the same venue for the hearing (the usual procedure for all hearings under the CPC as it was not clear if video conferencing was permissible and hence parties were reluctant to agree to it).[13] This could substantially reduce the costs of hearings. Further, the parties can agree that the witnesses may give evidence without the need to swear an oath,[14] thereby removing another possible avenue for the challenge of arbitration awards.[15] This can also mean that parties can agree in advance of a hearing that uncontroversial witness statements can be agreed and the witness need not attend (again parties were often reluctant to agree to this under the CPC for fear of later challenges to the award).

Another important change that will serve to reduce costs and improve the efficiency of arbitrations is that the award will be deemed issued at the place of arbitration regardless of where it is signed,[16] meaning that arbitrators will no longer need to fly into the UAE just to sign the award. Previously, we had even seen challenges to an award accompanied by requests for copies of the UAE entry visas in the arbitrators’ passports. Thankfully, these will now disappear.

Under the New Law, one of the most significant changes is the introduction of the power for tribunals to order interim and conservatory measures in support of arbitral proceedings. Under article 21(1), the tribunal may, at the request of a party or on its own motion, order any party to take such interim or conservatory measures as it may consider necessary. This includes the preservation of evidence or goods that form part of the dispute, preserving assets or funds out of which an award may be satisfied, maintaining the status quo or taking action to prevent harm to the arbitration process. A party may then, with the written permission of the tribunal, apply to the courts to enforce any such order within 15 days of the request.[17] Interestingly, it is also open to a party or the tribunal itself to apply directly to the court for interim or conservatory measures.[18] We will watch with interest to see how the local courts adapt to this regime as they are unaccustomed to granting interim relief.

Unfortunately, the New Law does not clear up the issue about whether a tribunal can order payment of the winning party’s costs (if this has not been agreed by the parties). Under the CPC, the tribunal could only order payment of its own fees.[19] The Dubai Court of Cassation held that, unless the institutional rules (which in that case were the Dubai International Arbitration Centre (DIAC) Rules that were silent on the issue), or any other document signed by the parties, gave the tribunal the power to award party costs, then there was no implied power for it to do so. Article 46 of the New Law deals with the assessment and payment of the costs of the arbitration, stating that these include the costs of the arbitrators and tribunal-appointed experts but making no mention of any other costs such as legal fees. Meanwhile, article 33(5) states that the ‘parties may, at their own expense, avail of experts and attorneys, whether lawyers or otherwise, to represent them before the arbitral tribunal.’ The words ‘at their own expense’ perhaps suggest that a successful party seeking to recover its own legal fees pursuant to article 46 may face an uphill battle. It therefore remains to be seen how tribunals and, ultimately, the local courts interpret these provisions.

Lastly, and perhaps most significantly, the New Law provides for a new regime for enforcement of arbitration awards. The ‘competent court’ is now the local Court of Appeal, replacing the Court of First Instance, which may mean judges with more experience of arbitration are now in charge of the ratification of awards. Once an application for ratification and enforcement is filed with the chief justice of the Court of Appeal, an order must be issued within 60 days,[20] a quick turnaround for the court. A party can, of course, challenge the award, either by filing its own action within 30 days of notification of the award or in response to an application to ratify and enforce. The limited grounds for challenging an award are based on those in the UNCITRAL Model Law with a few additions:

  • the person signing the arbitration agreement did not have capacity to do so;[21]
  • the award excludes the application of the parties’ choice of law for the dispute;[22] and
  • the arbitral proceedings were ‘marred by irregularities that affected the award or the award was not issued within the specified time frame’ (which can be agreed by the parties)[23], [24]

The court can also set aside an award on its own initiative if the subject matter to the dispute is not capable of settlement by arbitration or the award is contrary to public policy.[25]

The route to appeal the court’s decision appears to depend on the party that has brought the application. The decision in an application to set aside can be appealed to the Court of Cassation,[26] whereas the only recourse against the decision in an application to ratify and enforce an award is to file a grievance before the Court of Appeal.[27]

Unlike the CPC, the New Law provides various safeguards to prevent the nullification of an award on technical grounds. A party can request that the tribunal clarifies any ambiguity in an award[28] or corrects a clerical or computational error.[29] A party can also request an additional award if the original one does not cover all relevant issues.[30] Further, under article 25, a party will be deemed to have waived its right to object to any non-compliance with the law or requirements relating to the arbitration agreement if it does not raise the issue within seven days of becoming aware. However, under article 54(5), an action to set aside in relation to such non-compliance is still admissible even if the right to raise that issue has been waived. It is hard to see how these two articles are compatible.

Enforcement of foreign arbitral awards

The New Law makes no mention of the route for enforcement for foreign awards and, as such, articles 235 to 238 of the CPC (which previously governed this) remained in force. However, a recent cabinet decision[31] provides a new regime for the enforcement of foreign judgments and awards which, replaces articles 235 to 238 of the CPC. It is understood that this new regime will come into force on 16 February 2019.

The new regime prescribes that a party seeking the enforcement of a foreign award must file a petition directly with the execution judge who shall have three days to issue an order. Such order shall then be enforceable immediately.

How this will work, in practice, remains to be seen. The three day time limit for a decision will, of course, be welcomed but it is not clear how challenges to enforcement will be dealt with within this short timescale. Further, it is not clear on what basis the order of the execution judge may be appealed and whether this will provide a route for debtors simply seeking to delay enforcement.

Interestingly, the decision does specifically state that this new regime shall be ‘without prejudice to the provisions of conventions between the UAE and other countries’, which would include the New York Convention[32] (NYC) entered into by the UAE in 2006. Article III of the NYC provides that it should not be more onerous or costly to enforce foreign awards as compared to domestic awards. Therefore, to the extent that this new regime is more costly or, in practice, is more time consuming (perhaps because of the routes of appeal), a foreign award creditor should be able to rely on the regime for enforcement of domestic awards under the New Law to the extent that is more favourable. We understand that the Chief Justice of the Dubai Court of Appeal has already granted enforcement of several foreign awards using the procedure set out in the New Law.[33]

Article 257 of the UAE Penal Code

As we discussed in our article from last year,[34] a change to the UAE Penal Code[35] in October 2016 introduced the possibility of imprisonment for arbitrators should they act ‘contrary to [their] duty of fairness and unbiasedness’. This caused much concern in the arbitral community leading some arbitrators to withdraw from appointments and many to reconsider whether they should accept appointments in the UAE going forward.

However, Federal Decree Law No. 24 of 2018 has again amended the relevant article and thankfully removed arbitrators (and party-appointed experts) from the threat of criminal liability.

The previous article 257 was as follows:

Temporary imprisonment shall be inflicted on whoever issues a decision or expresses an opinion or submits a report or presents a case or proves an incident, in favour of a person or against him, contrary to the duty of fairness and unbiasedness, in his capacity as an arbitrator, expert, translator or investigator who is appointed by a judicial or an administrative authority or elected by the parties.

The aforementioned categories shall be precluded from performing the duties they were charged with in the future, and the provisions of Article (255) of this Law shall apply thereto.

The new article 257 is:

Any person who, while acting in the capacity of an expert, translator or investigator appointed by a judicial authority in a civil or criminal case, or appointed by an administrative authority, confirms a matter contrary to what is true and misrepresents that matter while knowing the truth about it, shall be sentenced to imprisonment for a minimum term of a year and a maximum term of five years.

The punishment shall be temporary imprisonment if the mentioned individuals were assigned to a mandate in relation to a felony.

The mentioned individuals shall be prohibited from undertaking the assignments commissioned to them another time, and the provisions of Article (255) of this Law shall apply to them

As you can see, arbitrators are no longer included in the list of those to whom the article may apply. Further, in the new text, only experts appointed by the ‘administrative authority’ are caught; in the previous version, experts appointed by the parties were also at risk. The test for criminal liability has also been changed from unfairness and bias to ‘dishonesty’, a much clearer concept and more akin to other criminal tests.

Arbitrators should, however, be aware that the New Law provides that an arbitrator may still be challenged ‘if circumstances exist that give rise to justifiable doubts as to his impartiality or independence’,[36] but this should come as no surprise as it mirrors the provisions in the UNCITRAL Model Law. Further, the New Law paves the way for a code of professional conduct to be issued by the Minister of Economy in due course[37] and it will be interesting to see what additional standards this may impose on arbitrators.

The Abu Dhabi Global Market

Developments within the ADGM, a financial free zone in Abu Dhabi (which often draws comparisons with the DIFC in Dubai), continue to make it a favourable seat for UAE arbitrations.

This year saw the signing of a new memorandum of understanding with the Abu Dhabi Judicial Department[38] confirming the reciprocal enforcement of judgments, including ratified arbitral awards. This means that any arbitral award ratified through the ADGM courts, under the arbitration-friendly ADGM Arbitration Regulations, should be directly enforceable in the onshore Abu Dhabi courts without any re-examination of the merits.

This not only means that those in Abu Dhabi have an alternative choice of seat, but could open the way for ADGM to act as a conduit jurisdiction in much the same way as the DIFC did without the threat of the Joint Judicial Committee removing jurisdiction in favour of the onshore Dubai Courts (see further below).[39] This is amplified by the other international memoranda already in force between the ADGM and the courts of Hong Kong, New South Wales, Singapore, the Queen’s Bench of England and Wales and the federal courts of Australia.

To support the ADGM’s wish to become a recognised arbitration centre for the region, 2018 also saw the opening of the state-of-the-art hearing centre, the ADGM Arbitration Centre. This centre is open to all, regardless of the institutional rules governing the arbitration and provides advanced technology and world-class hearing facilities that complement the state-of-the-art ADGM courtroom.

The new DIAC rules?

Elsewhere in the UAE, mystery still surrounds the new rules from the DIAC. The DIAC announced the launch of the proposed new rules during the Dubai Arbitration Week in November 2017, stating that they had been approved by the UAE government save for the provisions relating to third-party funding. It was expected that the new rules would be issued in early 2018. However, to date, no new rules have been issued and DIAC has not provided any update on when they might be nor have they given any information on what has caused the delay.

We therefore await with interest any further announcements.

The Joint Judicial Tribunal

The overnight creation of the Joint Judicial Tribunal (JJT) in June 2016[40] was seen by many as a reaction to the increased use of the DIFC courts as a conduit jurisdiction for the enforcement of foreign court judgments and arbitration awards in onshore Dubai. Parties were increasingly taking advantage of the DIFC courts’ willingness to ratify foreign judgments and arbitral awards when the parties had no connection to the DIFC,[41] together with the regime of mutual recognition of judgments, orders and ratified awards between the DIFC and Dubai courts.[42] This avoided the need to apply for ratification and enforcement directly before the local Dubai courts that historically have been reluctant to enforce judgments from jurisdictions with which the UAE has no reciprocal treaty, and even when such a treaty exists, the process can be slow, expensive and subject to numerous challenges.

The JJT was established to determine conflicts of jurisdiction between the DIFC and Dubai courts and in 2016 and 2017 it issued numerous judgments that seemed to signal the end of the use of the DIFC as a conduit jurisdiction. It appeared that an award debtor facing enforcement of an award against it in the DIFC courts only needed to issue parallel proceedings in the Dubai courts to obstruct that enforcement. In such circumstances, it could then make an application to the JJT, which was likely to award jurisdiction to the onshore courts, buying the award debtor more time to progress annulment proceedings in the Dubai courts.

Last year saw five further published judgments from the JJT, with four narrowing the circumstances that the JJT will award jurisdiction to the local courts, while one indicated that the JJT will continue to intervene in certain circumstances.

The most relevant of these to the enforcement of arbitration awards[43] was the JJT’s decision[44] to award jurisdiction to the DIFC court to ratify and enforce an arbitration award on the basis that the relevant arbitral institution was the DIFC-LCIA, even in circumstances where the seat was onshore Dubai, perhaps indicating a move away from a default preference to award jurisdiction to the Dubai courts.


The key developments in the past year have improved the UAE’s reputation as an arbitration-friendly country. The new Federal Arbitration Law is a great improvement on the old regime and brings the UAE in line with competing arbitration hubs. However, we await the first published case reports to see exactly how the local courts will implement the new law, given that they are unused to the strict shortened time limits, including for rectification and enforcement proceedings, and the introduction of interim remedies, previously very rarely ordered by the local courts.

It will also be interesting to monitor how the onshore Abu Dhabi courts react to enforcement proceedings of ADGM judgments under the new memorandum of understanding. Will the ADGM become the new conduit jurisdiction given the difficulties introduced by the JJT in Dubai? Or will there be no need for a conduit jurisdiction given the new Federal Arbitration Law?

What is clear is that the fundamentals are in place to ensure the UAE remains at the forefront of arbitration development in the region, and that it will continue to remain a popular seat for the resolution of complex, high-value disputes involving international parties.


[1] Federal Law No. 6 of 2018 on Arbitration in Commercial Disputes.

[2] Article 61 one month after its publication in the Official Gazette.

[3] Article 60.

[4] There is no express exclusion for the DIFC and ADGM but, pursuant to article 3(2) of Federal Law No. 8 of 2004 regarding the Financial Free Zones, arbitrations seated in those freezones should continue to be governed by the respective arbitration laws of each zone (and all arbitration agreements should therefore make this very clear).

[5] Articles 5 and 7.

[6] Abu Dhabi Court of Appeal decision from 2014.

[7] Indeed, the report of the Dubai Court of Cassation (Real Estate Appeal 153 of 2011) suggested that even initialling the relevant page was insufficient.

[8] Articles 4(1) and 53(1)(c).

[9] Dubai Court of Cassation Case No 993/2017 Commercial Challenge.

[10] But the constituting documents should still be checked to see if this authority has been withdrawn.

[11] Article 58(2) of the CPC and article 154 of the Commercial Companies Law.

[12] Article 19. The CPC was previously silent on this issue.

[13] Articles 28(2)(b), 33(3) and 35.

[14] Article 33(7) which provides that the parties can agree that the laws of the state shall not apply to the hearing of witnesses: article 41(2) of the UAE Federal Evidence Law sets out the form of the standard oath for witnesses which was mandatory under article 211 of the CPC.

[15] See, for example, the Bechtel case, Dubai Court of Cassation, Petition No 503/2003.

[16] Article 41(6).

[17] Article 21(4).

[18] Article 18(2).

[19] Article 218 of the CPC.

[20] Article 55 (2).

[21] Article 53(1)(c).

[22] Article 53(1)(e).

[23] Article 42.

[24] Article 53(1)(g).

[25] Article 53(2).

[26] Article 54(1).

[27] Article 57.

[28] Article 49.

[29] Article 50.

[30] Article 51.

[31] Cabinet Decision No. 57 of 2018.

[32] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.

[33] Albeit before the new regime set out in the cabinet decision was introduced.

[34] Charles Lilley and Jack Ticehurst, ‘United Arab Emirates’, Global Arbitration Review: The Middle Eastern and African Arbitration Review 2018, available at https://globalarbitrationreview.com/benchmarking/the-middle-eastern-and-african-arbitration-review-2018/1169353/united-arab-emirates.

[35] Law No. 3 of 1987.

[36] Article 14.

[37] Article 58(1).

[38] Dated 11 February 2018.

[39] Charles Lilley and Jack Ticehurst, ‘United Arab Emirates’, Global Arbitration Review: The Middle Eastern and African Arbitration Review 2018, available at https://globalarbitrationreview.com/benchmarking/the-middle-eastern-and-african-arbitration-review-2018/1169353/united-arab-emirates.

[40] Dubai Decree No. 19 of 2016.

[41] X1 and X2 v Y1 and Y2, Banyan Tree Corporate PTE Ltd v Meydan Group LLC and DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf Navigation Holdings PJSC (CA 007/2015)

[42] Article 7 of the Judicial Authority Law, Law No 12 of 2004 as amended by Law No 16 of 2011.

[43] The other four related to the enforcement of Court judgements and orders.

[44] Cassation No. 1 of 2018.

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