United Arab Emirates: Commercial Mediation In The UAE And The Laws Governing Mediation

Last Updated: 22 February 2019
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, September 2019

Commercial Mediation in the UAE

"Mediation is one of the most effective tools of non-violence. It can turn parties away from conflict, towards compromise" - Miroslav Lajcák

Meaning

Mediation is a form of Alternative Dispute Resolution system (ADR) wherein the matter at issue is solved with the help of a mediator without recourse to the court of law. It is a voluntary process where a decision relating to the dispute is not imposed upon the concerned parties. Hence, a settlement shall be binding on the parties only as long as they agree to it. There may be instances when mediation is referred to by the court of law; however, even under such circumstances, it is always up to the decision of the parties to conclude. Therefore, the control over the mediation always lies between the parties to the dispute.

It is a party centered negotiation process, wherein, a neutral third party is involved who assists in solving the dispute amicably by using special techniques in negotiation. Since the party's concern is primary in this form of dispute resolution, they may withdraw from the proceeding at any stage until the settlement has come to an end. Mediation as a method of dispute resolution has an edge over the other forms, due to its degree of flexibility.

David Spencer and Michael C Brogan in their 'Mediation Law and Practice' explain the history of mediation as the following:

"Mediation, as a form of dispute resolution involving more than the parties, has been around since the beginning of basic human society. While the first humans would have negotiated in a rudimentary way regarding their basic needs and desires, it is submitted that there needed to be a sense of community, or belonging, to convince a third party to want to assist in the resolution of a dispute between others."

The adoption of mediation as a mode of dispute resolution is not only applicable to a personal matter. It may also be used to reconcile a dispute amicably which arises in the course of a business or a transaction.

The European Judicial System defines mediation as the following:

"Mediation is a voluntary non-binding private dispute resolution process in which a neutral and independent person assists the parties in facilitating the discussion between the parties in order to help them to resolve their difficulties and reach an agreement."

Therefore, from the above explanation, it is clear that mediation as a method of dispute resolution may apply to various forms of law such as civil, personal or labour. However, this article will analyze the concept of commercial mediation in the UAE and the issues concerning it.

Commercial Mediation

Commercial mediation is a type of negotiation where a dispute relating to commerce is settled between parties with the assistance of a neutral third-party. The party providing assistance should be unbiased and shall facilitate the negotiation process to arrive at a unanimous decision.

Such a method of dispute resolution is adopted by the parties engaged in commercial industries since it helps in the reduction of both the wastage of time and money which may occur on the recourse to litigation.

Advantages of Mediation

The following are the advantages of mediation over other forms of dispute resolution:

Active Participation of the Parties- Since mediation is a mode of ADR which is primarily concerned with the terms of the parties, they are actively involved.

Unbiased- Since it is a form of mediation wherein the parties have complete control over the decision, it is fair.

Easier- The procedures relating to mediation is much more flexible than the other forms of dispute resolution, and hence, it is simple.

Voluntary- The parties to the dispute have complete control over the matter in issue, and therefore, it is voluntary.

Economical- The mediation process is much more efficient and more inexpensive as compared to litigation.

Confidential- Utmost confidentiality shall be maintained while conducting mediation.

Commercial Mediation in the UAE

In the UAE, the concept and applicability of mediation have increased. Mediation is widely recognized in the UAE, and it is an area of law which has been extensively examined within the country.

In mediation, it is a prerequisite that unless the parties have unanimously come to a settlement, the decision shall not be finalized. In a mediation process, the interest of all parties is taken into consideration so that none of them face any complications as a result of the decision.

Mediation Process:

The mediation process involves the following stages, though it may vary:

  • Introduction/Opening Statement- Here the mediator shall introduce himself and the parties to the dispute followed by the statement of objective.
  • Opening statement by the disputant- Here the parties to the dispute shall describe the facts relating to the conflict and how they have been affected.
  • Joint Discussion- Here an opportunity is given to the parties to hear their opponents and to discuss the concerned matters.
  • Private/Separate Session- Here the parties to the dispute are given an opportunity to have a private conversation with the mediator followed by a joint negotiation.
  • Closure- At this stage, the parties shall come to a conclusion thereby settling the dispute amicably.

Dubai International Financial Centre (DIFC) and Mediation

The Dubai International Financial Centre (DIFC), has adopted mediation by formulating their own rules called the Rules of Dubai International Financial Centre Courts (RDC). Part 27 of the RDC deals with alternative dispute resolution, and it states the following:

"27.1 While emphasizing its primary role as a forum for deciding civil and commercial cases, the Court encourages parties to consider the use of alternative dispute resolution (such as, but not confined to, mediation and conciliation) as an alternative means of resolving disputes or particular issues."

Further, the RDC 27.2 lays down the benefits of alternative dispute resolution. RDC 27.3 states that the judges shall, in appropriate cases, invite the parties to the dispute and may consider whether such dispute could be reconciled through alternate dispute resolution. The DIFC-LCIA also provides for mediation as per the provisions of law.

Part 53 of the DIFC Rules deals with the Small Claims Tribunal and lays down provisions for settling disputes between the parties.

Mediation under the UAE Federal Laws

No specific law has been laid down governing the mediation process in the UAE; however, the Centre for Amicable Settlement of Disputes has been established under the Federal Law Number 16 of 2009.

As per Article 3 of the Law, the Centre was established with the aim to settle the disputes which arise between the parties.

The following are some of the essential provisions of the above legislation-

Article (4) of the Federal Law Number 16 of 2009 states:

"The Centre shall be responsible for considering the disputes for which a settlement order is made by the Chief regardless of their value or nature (excluding the urgent and timely orders and cases, cases to which the Government is a party, cases that do not fall within the jurisdiction of Courts, and the cases that are recorded with the Courts before the effective date of this law)."

Article (12)-

"If reconciliation is achieved between the parties of the dispute, the same shall be recorded by reconciliation agreement to be signed by both parties of the dispute and approved by the Competent Judge and this agreement shall have the power of an executive instrument."

Therefore, apart from the DIFC rules and regulations, the UAE also provides for the settlement of disputes through the legislation mentioned above. However, If an amicable agreement isn't conceivable, the disputing party can apply for a 'no complaint' letter from the committee, and in such case, the matter will be seen by the judge in the Court of First Instance.

RICS UAE Mediation Panel

The Royal Institution of Chartered Surveyors along with the Dubai Land Department held a conference on October 1, 2012, with an aim to promote mediation in the region and as a result, the RICS UAE President's Panel of Mediators was initiated.

Contractual Liability:

Nowadays, apart from conducting mediation under the instruction of judicial authority, the parties while entering into contracts may also include a clause which provides explicitly an alternative dispute resolution system. The clause may either specify mediation, arbitration, or any other form of negotiation. Therefore, although strict legislation may not guide such mechanisms, the parties are bound by it.

International Treaty

The United Nations Commissions on International Trade Law (UNCITRAL) introduced a convention on mediation settlements, and the final draft was instituted on 25 June 2018. Though the convention has not yet come into force, it has been referred to the commission for adoption. The enactment of the convention will be a massive step in accepting mediation as an alternative dispute mechanism at the international level. The convention is to be named the 'Singapore Media Convention,' following the signing of the treaty in Singapore.

Conclusion

The concept of mediation is undergoing a change and has been widely accepted in the UAE, as well as throughout the world. Though UAE legislation does not exist governing mediation as a mode of alternative dispute resolution, it is advised that the parties recourse to this form of dispute settlement, since it is highly cost-effective and at the control of the parties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions