United Arab Emirates: Arbitration Developments in the UAE in The First Half of 2016

Alec Emmerson, Consultant at Clyde & Co in Dubai, has a look at the arbitration developments in the UAE so far in 2016.

What has been the most significant arbitration case law development in the UAE the first half of 2016?

The most significant story in arbitration related case law in the UAE remains the development of the DIFC Courts' ("DIFCC") "conduit" jurisdiction. As previously reported several judgments of the DIFCC over the last two years led the way in the development of those courts as a conduit both for the enforcement of foreign awards where the award debtor had no connection with DIFC and also for the enforcement of domestic awards.

DIFCC held that there was no basis for asserted constitutional conflict of legislation which would prevent recognition and enforcement of awards in the DIFC where the Defendant is domiciled in Dubai. In December 2015 in an as yet unreported judgment of the Union Supreme Court (to which one of the parties in an earlier case had referred the constitutionality issue), it was held that DIFCC's view of the matter was correct.

Although the award debtor then sought a review by the USC of its December decision, no judgment on that review has been issued and, in the view of the writer at least, the USC has no power to review its own decisions.

In a further development, the award debtor in the same case had sought annulment of the arbitration award in the Dubai Courts but both at First Instance and in the Court of Appeal the applications to annul were unsuccessful. The matter is currently with the Dubai of Cassation.

The development of the conduit jurisdiction in various judgments of the DIFCC has also resulted in a change in procedure. In the early cases the Court was not prepared to make orders for enforcement on an ex parte basis. Now it appears to be the practice for such orders for recognition and enforcement to be made ex parte (as permitted by the DIFCC Rules), putting the onus on the award debtor to seek to set aside the recognition and enforcement order. This has speeded up the process considerably and has resulted in costs savings.

What have been the most significant developments in arbitral institutions in the UAE in the same period?

Following statutory amendments in 2014 to Law No. 9 of 2004 "Concerning the Dubai International Financial Centre", the DIFC Courts which was one of the three bodies of DIFC, became a constituent part of the new Dispute Resolution Authority. There was also created, as an independent body under the DRA umbrella, the DIFC Arbitration Institute ("DAI"). In November 2015 DAI relaunched the DIFC-LCIA Arbitration Centre in what is essentially a joint venture with LCIA. This was followed by the appointment of Mohamed ElGhatit as the new Director & Registrar of DIFC-LCIA and the appointment of other support staff which will result in most of the case management and development of the Centre going forward with a unique blend of the LCIA's renowned reputation combined with "on the ground" management in the DIFC, supervised by an international board of five trustees who are well known in international arbitration. New Rules to reflect LCIA's updates of 2014 (including online filing, the ability to appoint an emergency arbitrator and the party conduct provisions) are looked forward to eagerly later this year, along with the establishment of a DIFC-LCIA Users' Council.

Emirates Maritime Arbitration Centre was also established by decree in the first half of this year and will be fully up and running later in the year.
Finally, ADGM issued its arbitration regulations. Whilst this is not an arbitral institution, the regulations set out the "law" for the conduct of arbitrations in ADGM. The UAE therefore now has a diversity of arbitration offerings of which the above three have up to date arbitration laws their seat (DIFC and ADGM) and are expected to assist Dubai and the UAE in their aim to become world class arbitration centres.

What have been the most notable features of your practice so far this year?

For Clyde & Co, there has been a continued growth of instructions in commercial and construction arbitrations along with enforcements through the DIFC Courts and execution against assets "onshore".

What development internationally has caught your eye and why?

The lifting of sanctions on Iran should result in a dramatic increase of international trade and investment involving Iran. This in turn will mean that there are more disputes involving Iranian parties which the UAE's arbitration (and mediation) centres are uniquely placed to handle. This is a message that needs to be delivered to both international and Iranian parties with particular emphasis on DIFC as the seat preferred for such arbitration.

Arbitration Developments in the UAE in The First Half of 2016

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