Commercial Arbitration

    Infrastructure

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

    The UAE is a contracting state of the New York Convention. The Convention entered into force on 19 November 2006, following its ratification on 13 June 2006 (article 1, Decree No. 43 of 2006). No declarations or notifications were made by the UAE under articles I, X or XI of the Convention bar the very common reservation that recognition and enforcement of foreign awards under the Convention would be confined to awards rendered in other Convention countries (article 1, Decree No. 43 of 2006).

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

    Apart from the New York Convention, the UAE is a party to the following further multi-lateral conventions regarding the recognition and enforcement of arbitral awards:

    · the Riyadh Convention on Judicial Cooperation between States of the Arab League (1983), which entered into force in 1999;

    · the GCC Convention for the Execution of Judgments, Delegations and Judicial Notifications (1987); and

    · the ICSID Convention, ie, the Washington Convention on the Settlement of the Investment Disputes between States and Nationals of Other States (1965).

    In addition, the UAE has entered into a number of bilateral treaties relating to arbitration, including:

    · the Treaty on Judicial Cooperation in Criminal Matters, Extradition of Offenders, Cooperation in Civil, Commercial and Personal Matters with Morocco (2006);

    · the Treaty on Mutual Legal assistance in Criminal Matters, Extradition of Offenders, Cooperation in Civil, Commercial and Personal Matters, Service of Judicial and Extra-Judicial Documents, Obtaining Evidence, Commissions and the Recognition and Enforcement of Foreign Judgments and Arbitral Awards with Sudan (2005);

    · the Agreement on Legal and Judicial Cooperation with Syria (2002);

    · the Agreement on Legal and Judicial Cooperation Egypt (2000);

    · the Agreement on Legal and Judicial Cooperation Jordan (1999);

    · the Treaty on Judicial Cooperation, Recognition and Enforcement of Judgments in Civil and Commercial Matters with France (1992); and

    · the Agreement on Legal and Judicial Cooperation with Somalia (1972).

    The bilateral treaties with Sudan and Somalia are of particular importance given that these two countries have not yet ratified the New York Convention.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

    The primary domestic source of law relating to both domestic and foreign arbitral proceedings is articles 203 to 218 of Federal Law No. 11 of 1992, the UAE Civil Procedure Code (CPC). The recognition and enforcement of domestic awards more specifically is governed by article 215 CPC, whereas the recognition and enforcement of foreign awards is guided by articles 235 to 237 CPC. The current arbitration provisions of the CPC are not based on the UNCITRAL Model Law. It is, however, likely that the new UAE arbitration law will follow the spirit of the UNCITRAL Model Law; to note that the new draft arbitration law currently under discussion takes guidance from the Egyptian arbitration law and hence takes, to some extent, account of the UNCITRAL Model Law.

    Apart from the UAE CPC, there is also the DIFC Law No. 1 of 2008, which governs arbitration proceedings in the Dubai International Financial Centre (DIFC) from the arbitration agreement to the recognition and enforcement of DIFC arbitration awards. By contrast to the arbitration provisions of the CPC, the DIFC Arbitration Law is modelled on the UNCITRAL Model Law. The following sections of this report will focus on the application of the arbitration provisions of the CPC in light of the special status and the resulting restricted application of the DIFC Arbitration Law.

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

    The most prominent arbitration bodies relevant to international arbitration in the UAE are:

    Dubai International Arbitration Centre (DIAC) c/o Dubai Chamber of Commerce and Industry (DCCI)
    14th Floor, Baniyas Road,
    PO Box 1457,
    Deira,
    Dubai – UAE
    Tel: +971 4 2028 343
    Fax: +971 4 2028 668
    Website: www.diac.ae/idias/

    Dubai International Financial Centre – London Court of International Arbitration (DIFC-LCIA)
    c/o Dubai International Financial Centre
    The Gate Precinct
    Building 4
    PO Box 211724
    Dubai – UAE
    Tel: +971 4 427 3333
    Fax: +971 4 4273330
    Website: www.difc.ae

    Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) c/o Abu Dhabi Chamber of Commerce and Industry (ADCCI)
    PO Box 662
    Cornish Road
    Abu Dhabi – UAE
    Tel: +971 2 317599
    Fax: +971 2 2311410
    Website: www.abudhabichamber.ae

    Each of the above institutions also offers appointing services in return for a modest fee. There are other regional arbitration centres in other Emirates of the UAE, such as Sharjah and Ras Al Khaimah, of lesser prominence and importance. It is also worth noting that Islamic finance disputes may be referred to the International Islamic Center for Reconciliation and Arbitration in Dubai. Reference in the following will primarily be made to the DIAC Rules as the rules most tested in the UAE.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?

    Foreign arbitral providers can operate in the UAE. By way of example, the DIFC-LCIA, mentioned at question 4 above, even though constituting a local arbitration body, is a sister organisation of the London Court of International Arbitration. Equally, the International Chamber of Commerce (ICC) is active in the UAE through the ICC UAE.

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

    In the UAE there are no specialist arbitration courts and the history of modern arbitration law is relatively young. That said, the UAE judiciary is becoming increasingly familiar with the law and practice of international arbitration and, in light of recent trends towards alternative dispute resolution locally and internationally, more and more arbitration-friendly.

  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

    Under UAE law, an arbitration agreement is subject to the following formal and other requirements:

    · Arbitration clauses in relation to insurance policies are required to be ‘contained in a special agreement separate from the general printed conditions in the policy of insurance’ (article 1028(1), UAE Civil Code).

    · An arbitration agreement must be evidenced in writing (article 203(2) CPC), which – in light of relevant case law – may mean that the page on which the arbitration clause is contained must be signed by both parties to the arbitration.

    · The signatory of the arbitration agreement is required to have a special authority to sign (article 58 CPC); by way of caution, if the agreement is signed by a party representative, it is highly recommended that such representative possess a notarised power of attorney specifically authorising him to sign the arbitration agreement.

    There are no additional restrictions on submitting future disputes to arbitration.

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

    The following disputes are non-arbitrable under UAE law:

    · Commercial agency and distributorship disputes, which are expressly subject to the exclusive jurisdiction of the UAE courts (article 6, Federal Law No. 18 of 1981 (as amended), the Commercial Agency Law).

    · Labour disputes, which are subject to the exclusive jurisdiction of the UAE courts following an initial mediation referral to the competent department of the UAE Ministry of Labour and Social Affairs (Federal Law No. 8 of 1980 (as amended), the Labour Law); collective labour disputes are referred to the Supreme Arbitration Board appointed by the said Ministry.

    Importantly, disputes arising under ESCA have to be adjudicated by arbitration in a first instance.

  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

    Generally speaking, third parties cannot be bound by an arbitration agreement under UAE law. Obvious exceptions are where obligations under an arbitration agreement are formally assigned to a third party or where, by way of succession, a third party adopts the contractual obligations, including the obligation to arbitrate, of another party. On joinder more specifically, please also see question 10 below.

  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

    Neither the UAE domestic arbitration law nor the various arbitration rules make specific provisions on joinder or consolidation. Experience, however, shows that some arbitration institutions, such as DIAC, are willing to consolidate proceedings between the same or related parties in relation to like-natured disputes arising from the same or identical agreement(s).

    Further, the DIAC Rules make provision for the nomination of one and the same arbitration tribunal where multiple parties are involved on the claimant’s and or the respondent’s side (article 11, DIAC Rules).

  12. 11.Groups of companies
    Is the “group of companies doctrine” (or any other method of piercing the corporate veil) recognised in your jurisdiction?

    Under UAE law, there is no group of companies doctrine or the like per se, nor any other formal doctrine of piercing the corporate veil. However, this does not prevent a tribunal from finding that a corporate affiliate is bound by an arbitration agreement entered by, for example, the parent company on a case-by-case basis, depending on the particular circumstances of each case.

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

    Under UAE law, arbitration clauses are generally considered separable from the main contract. Separability works both ways, ie, if the underlying main contract is found to be null and void, this does not necessarily imply the voidness and nullity of the arbitration agreement and vice versa.

  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

    Under UAE law and relevant institutional Rules (article 6, DIAC Rules), an arbitration tribunal is competent to decide upon its own jurisdiction. Hence, DIAC recognises the competence-competence principle. This said, under the DIAC Rules, jurisdictional objections should be raised by the defendant at the latest with the Statement of Defence. Under the CPC, parties retain the right to challenge an award on the basis of it having been rendered in breach of the arbitrator’s proper mandate (and jurisdiction) during the ratification process of the award (article 216, CPC). The arbitrator is further obliged to defer to the courts if, during the course of the arbitration proceedings, a matter is referred to him that falls outside the scope of his mandate (article 209(2), CPC).

  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

    Apart from the specifications made in relation to arbitration agreements, the arbitral procedure and the constitution of the arbitration tribunal elsewhere in this report, there are no further considerations to be taken into account in drafting arbitration clauses providing for arbitration in the UAE.

  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

    Institutional international arbitration has become well entrenched in the UAE. DIAC in particular has developed into a preferred institutional framework for the resolution of international disputes in the UAE. This said, the ICC also plays a prominent role in institutional international arbitration in the region.

  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

    UAE arbitration law does not specifically provide for multi-party arbitration.

    By contrast, the DIAC Rules specify that in the presence of multiple claimants or respondents and where a three-member tribunal is to be appointed, the multiple claimants are jointly to nominate one arbitrator, and the multiple respondents jointly another, failing which the DIAC Executive Committee will make the requisite appointments by default (article 11, DIAC Rules).

  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

    Arbitration proceedings are generally commenced by filing a request for arbitration with the competent arbitration institution or in ad hoc proceedings, a notice of arbitration upon the prospective defendant. The request or notice is usually required to set out in some detail:

    · the names, addresses and identity of the parties;

    · the underlying arbitration agreement, including the place and language of, as well as the procedural rules applicable to the arbitration;

    · the dispute and the factual background to the dispute;

    · the relevant cause of action pleaded by the claimant;

    · the name of the arbitrator nominated by the claimant (provided the parties have agreed to have their disputes resolved by a three-member tribunal) or the name of a suitable candidate for joint nomination by the parties; and

    · a provisional statement of relief sought.

    In proceedings governed by institutional rules, the request needs to be submitted in a number sufficient to provide copies for the supervising institution, for each arbitrator and for the defendant.

    In response, the defendant will usually be required to file an answer to the request, which will contain a similar level of detail in relation to the defendant’s defence and any counterclaims.

  20. Choice of Law

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

    There are no specific provisions in the domestic arbitration law of the UAE as to which substantive law is applicable to the dispute at hand. As a general rule, parties are free to agree on the laws applicable to the dispute between them, bar the application of a number of mandatory provisions under UAE law (as set out elsewhere in this report). Failure to consider the application of mandatory rules may adversely affect the enforceability of the resulting arbitration award.

    Where the parties fail to agree the applicable law, the arbitration tribunal may take guidance from the conflict of laws rules contained at articles 10 et seq of the UAE Civil Code.

  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?

    Under UAE arbitration law, an arbitrator may not be:

    · a minor;

    · placed under guardianship; or

    · convicted of a criminal offence or bankrupt, unless having been rehabilitated (article 206(1), CPC).

    Generally speaking, any person that fulfils the abovementioned criteria and is impartial and independent may act as arbitrator. This includes judges, provided they do not adjudicate future disputes involving the same parties acting in their capacity as a public judge (article 115, UAE Civil Transactions Code).

  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

    Foreigners can act as arbitrators in the UAE. This is not subject to any particular immigration or other requirements.

  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

    It is usually the chosen arbitration rules that provide for default mechanisms in relation to the appointment of arbitrator where the parties fail to appoint the requisite arbitrators (eg, the DIAC Rules). In ad hoc arbitrations, the UAE courts are in charge of default appointments; importantly, the courts’ decisions are unchallengeable (article 204, CPC).

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

    Under UAE law, arbitrators are generally immune from liability to the same extent as public judges are (article 207, CPC). This is also expressly consecrated by some of the arbitration rules (article 40, DIAC Rules). The arbitrator may, however, have to indemnify the parties where he withdraws from his mandate without a significant reason (article 207(2), CPC).

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

    Whether in institutional or ad hoc arbitration, arbitrators in the UAE are able to secure payment of their fees by holding back the issuance of their award until full payments of their fees have been made. There are, generally speaking, no fundholding services in the UAE. However, arbitration institutions will generally be responsible for the onward transfer of the tribunal’s fees to the individual members of the tribunal.

  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

    Essentially, the grounds for challenge of an arbitrator coincide with those for challenge of a public judge (article 207(8), CPC). Such grounds include:

    · A particular, disqualifying marital or family relationship between the arbitrator and one of the parties;

    · the arbitrator being an agent, trustee or guardian of one of the parties;

    · conflicting interest as counsel, witness or expert in the same, related or even unrelated proceedings; (article 114, CPC)

    · some form of intimate or professional relationship with one of the parties; or

    · bias (article 115, CPC).

    In addition, an arbitrator may be revoked on the ground that he has intentionally neglected to act in accordance with the arbitration agreement or to comply with his mandate (article 207(3), CPC).

    Applications for challenge are to be made to the competent court, which will decide on the challenge promptly. The IBA Guidelines on Conflicts of Interest in International Arbitration are taken into consideration to the extent pleaded by the Parties provided they do not contradict the relevant conflict of interest provisions under UAE law.

  30. Interim relief

  31. 25.Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    There are no specific provisions on a tribunal’s power to make interim measures under UAE law. That said, some of the institutional arbitration rules are more specific, empowering the tribunal to adopt certain interim and conservatory measures once the arbitration tribunal has been constituted (article 31, DIAC Rules). Such measures may also include the ordering of measures relating to security of costs.

    As regards anti-suit injunctions, UAE courts have become increasingly arbitration-friendly and will give precedence to an arbitration agreement provided that in the first hearing before the competent court, the defendant raises the existence of the arbitration agreement and insists on the referral of the proceedings to an arbitration tribunal (article 203(5), CPC), failing which the arbitration agreement will be considered null and void ab initio.

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

  34. 27.Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (e.g. general duties of the tribunal and/or the parties)?

    The following UAE domestic arbitration law provisions on procedure may not be derogated from by the parties:

    · the uneven number of arbitrators (article 206(2), CPC);

    · the arbitrators’ independence and impartiality (article 207(4), CPC);

    · the right of both parties to a fair hearing (article 212(1), CPC);

    · the obligation of any fact or expert witnesses to present their respective evidence on oath on the pain of perjury (article 211, CPC); and

    · any other public policy considerations (further detail on which see question 41 below).

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

    Where a respondent fails to participate in the arbitration proceedings, it is usually the arbitrator’s practice to raise relevant milestones of the arbitration procedure to the respondent in regular intervals to ensure that it be fully informed and aware of the procedure and hence given the opportunity of a fair hearing. Continued failure to respond, however, does not cause the proceedings to cease and the arbitrator may render an award in absentia.

  36. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?

    By way of general guidance, in light of the UAE being a civil law country, disclosure rules before the UAE courts are very conservative. As a rule of thumb, the burden of proof is on the claimant and – unlike the situation in some common law countries – defendants are not obliged to disclose information that may be detrimental to their own case, unless otherwise agreed by the parties. Disclosure obligations under UAE law are thus very limited, essentially to documents that the adversary relies on in support of its own case or that establish the rights and obligations of both parties (article 18, Federal Law No. 10 of 1992, the Law of Evidence). The “without prejudice” principle is alien to the UAE legal system, as a result of which settlement correspondence can generally still be disclosed to the arbitration tribunal. This said, in arbitration proceedings, the rules of evidence are more flexible; arbitrators in the UAE are hence not obliged to apply the rules of evidence, which are usually applicable before the courts. The arbitrating parties are free to agree on the applicable rules of evidence, including, for example, the IBA Rules.

    Both expert and fact evidence has to be supported by oral testimony on oath (article 211, CPC). Witness statements submitted without subsequent oral testimony are of limited value.

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

    Under UAE law, an arbitrator may rely upon the supportive powers of the UAE courts to assist in the production of documents from a third party that are necessary for determining the dispute before the tribunal (article 209(2)(b), CPC).

  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?

    Under UAE law, it is not mandatory for the parties to have a final hearing on the merits. This said, the parties, however, have to be notified of a date and place of the first preliminary hearing within thirty days after the tribunal accepting its appointment (article 208(1), CPC). Further hearings will be held as agreed between the parties and/or directed by the tribunal. No further more specific rules are contained in any of the institutional arbitration rules, which thus retain a degree of procedural flexibility.

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

    Despite the UAE being selected as the seat of arbitration, hearings and the deliberations of the tribunal may, however, be conducted at any other place. This said, in order to be enforceable in the UAE, the arbitration award resulting from an arbitration procedure seated in the UAE will also have to be signed in the UAE.

  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?

    Under UAE law, an award is valid if signed by a majority of arbitrators (article 212(5), CPC). A dissenting arbitrator’s opinion should be attached to the award. An arbitrator’s refusal to sign the award should be expressly stated therein.

  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

    Arbitral tribunals in the UAE may not grant any criminal or other public law sanctions (such as declaration of bankruptcy) that fall within the powers of the competent UAE courts or other sanctioning authorities.

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

    Dissenting opinions are permitted under UAE law. To note that they have to be appended to the arbitration award. See also question 37 below.

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

    Under UAE law, the award must:

    · be written in Arabic, unless otherwise agreed by the parties, in which case an official translation into Arabic is to be appended to the award (article 212(6), CPC);

    · be rendered and signed by a majority of arbitrators, stating any arbitrator’s refusal to sign the award;

    · append any dissenting opinions;

    · include the express wording of the arbitration agreement in the body proper of the award;

    · provide a summary of the parties’ cases and evidence;

    · set out the reasoning of the award;

    · set out place and date of issuance of the award (article 212(5), CPC); and

    · be signed (in both its dispositive and motivating part) by each member of the tribunal.

  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

    Under UAE law, the award has to be rendered within six months from the date of the first hearing (subject to extension by the parties’ consent or order of the court) (article 210, CPC). Under some arbitration rules, the deadline for rendering the award is six months from the date of the tribunal’s receipt of the arbitration file; this deadline can be extended by the tribunal of its own motion by another six months (article 36, DIAC Rules).

    Under UAE law, an arbitrator may only deal with omissions from or clarifications of his award upon the specific request from the court within three months from receiving the court’s request (article 214, CPC).

    The UAE courts may correct material errors of the award at the ratification stage (article 215(1), CPC).

  47. Costs and interest

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

    Under the DIAC Rules and the CPC, costs usually follow the event, ie, the loser pays, even though the arbitrators retain some discretion to allocate costs and fix their own fees (subject to the determination of fees and costs in accordance with fee and costs schedules consecrated by the governing institutional rules, vide DIAC). An arbitration tribunal may award all kinds of costs, including arbitration fees and expenses. Counsel fees may also be recovered in full.

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

    An arbitration tribunal will usually grant interest at the rate of 9 per cent per annum on the total amount awarded (and up to 12 per cent in case of merchants). Interest will start running either from the date the initial action was filed until final settlement of the amount awarded, provided the original claim was for a specified amount, or from the date on which the award becomes final until final settlement, provided the original claim did not specify the amount of the claim. Unlike the practice before the UAE courts, tribunals may award compound, rather than just simple, interest.

    However, the award of interest is generally considered contrary to the Shari’a in Middle Eastern jurisdictions. Awards containing provisions on interest will therefore only be enforceable without the interest element. It has to be borne in mind, however, that the prevailing party may wish to enforce the award outside the Middle East, in which case it may be useful to cater for the payment of interest despite the adverse provisions of the Shari’a. Counsel, therefore, is well-advised to find a creative solution to accommodate potential enforcement of interest in more permissive jurisdictions.

  50. Challenging awards

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

    Before and during the recognition process, a party may seek to set aside an award. The extent of the review by the courts under UAE law is strictly limited to those cases laid down in article 216, CPC or those related to public order. In fact, in two recent decisions (petition no. 270/2008, judgment of 24/03/2009; and petition no. 32/2009, judgment of 29/03/2009), the Dubai Court of Cassation regrouped the grounds for challenges under the following two categories:

    1. Grounds linked to the arbitration agreement, namely: the non-existence or invalidity of the arbitration agreement; the expiration of the arbitration agreement; an arbitrator’s excess of authority in addressing matters outside the scope of the arbitrator’s mandate (listed in article 216, CPC); or the infringement of a public order rule (not listed in article 216, CPC).

    2. Grounds linked to the arbitral proceedings per se, namely: the irregular composition of the arbitral tribunal;the issuance of the award by a truncated tribunal with no authorisation to do so; failure to define the dispute in the arbitration agreement; lack of capacity to enter into the arbitration agreement (listed in article 216, CPC); or due process violations, such as a denial of opportunity to present one’s case and equal treatment of the parties (provided for under Aarticle 212, CPC); or if the award of the arbitrators or the arbitration proceedings become void and such voidness impacted the award (listed in article 216, CPC).

    In addition, awards are open to challenge for potential violations of public policy as understood in the UAE. Under UAE law, ‘public policy shall be viewed as including such provisions relating to private status such as marriage, inheritance, and lineage, as well as provisions relating to sovereignty, free trade, distribution of wealth, rules of private ownership and the other rules and foundations upon which society is based, in such a manner as not to conflict with the definitive provisions and fundamental principles of Islamic Sharia’a.’ (article 3, Federal Law No. 5 of 1985, as amended, the Civil Transactions Law)

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

    An award may also be challenge on other grounds of procedural irregularity, such as reliance of the award on witness evidence that was not properly sworn in accordance with article 211, CPC.

  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

    UAE law does not provide for any rights of appeal in relation to arbitration awards. Awards are, however, subject to a ratification process to ensure their enforcement before the UAE courts. Parties are free to agree not to mount a challenge of the award during that ratification process.

  54. Enforcement in your jurisdiction

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

    UAE law remains silent on this issue, nor are there any court precedents to provide guidance.

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

    To ensure recognition and enforcement, domestic awards have to undergo a validation/ratification process before the UAE courts. This process is based on an ordinary court action, resulting in an order of recognition and enforcement by the competent court of first instance, which in turn is subject to the ordinary channels of appeal before the UAE courts. The UAE courts have become increasingly arbitration-friendly and look favourably on the recognition and enforcement of arbitration awards. There is no time limit for the commencement of the ratification process. Importantly, the enforcement of an award is suspended pending completion of the recognition process (Dubai court of cassation, petition no. 265/2007, judgment of 03/02/2008).

    The recognition and enforcement of foreign awards is guided by the applicable bi- or multi-lateral Conventions listed in answer to questions 1 and 2 above. Generally speaking, in accordance with those Conventions, an award should be enforced provided it is final and appropriate for enforcement in the country of origin and it is not contrary to the principle of public policy as understood in the UAE. DIFC awards are recognised and enforced in the UAE through a DIFC court order, which is likely enforceable in the UAE as a foreign judgment (article 7(2), Law No. 12 of 2004 in respect of the Judicial Authority at the Dubai International Financial Centre). Recognition and enforcement of DIFC awards before the Dubai courts is facilitated by reference to the 2009 Memorandum of Understanding Between Dubai Courts and DIFC Courts (which entered into force as from 16 June 2009) and the related Protocol of Enforcement between Dubai Courts and DIFC Courts, provided the awards are final and appropriate for enforcement before the DIFC court.

    Bar the application of one of bi- or multi-lateral Convention referred to at question 40 above (article 238, CPC), the enforcement of foreign awards follows the same rules as the enforcement of foreign judgments (article 236, CPC). The UAE courts may refuse enforcement of a foreign award on grounds such as:

    · the lack of proper jurisdiction of the tribunal at the place of arbitration;

    · the deficient issuance of the arbitration award at the place of arbitration;

    · the improper summoning or representation of one of the parties in the foreign arbitration proceedings; or

    · the contradiction of the foreign award with a previous UAE judgment or its violation of public policy or bonos mores as understood in the UAE (article 235, CPC).

    Importantly, recognition and enforcement is based on a principle of mutual recognition, whereby the UAE courts will only apply the provisions under article 235 CPC in relation to awards issued in countries that, in turn, recognise and enforce UAE awards (article 235(1), CPC).

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

    There is no immunity for domestic/foreign state entities from civil proceedings, including arbitration proceedings, per se. Some Emirates, however, require a formal notice to be served on the legal affairs department before suing a governmental authority, whether in arbitration or before the courts. If the legal affairs department does not reply within thirty days form the filing of the notice, the claimant may commence proceedings before the UAE courts or the competent arbitral forum.

  58. Further considerations

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

    UAE law does not contain any specific provisions on the confidentiality of arbitration proceedings. In practice, however, arbitration in the UAE is considered private and confidential, including any information and materials disclosed during the arbitral proceedings. Express provisions to that effect are contained in some of the institutional rules (eg, article 41, DIAC Rules).

    Under the DIAC Rules, the arbitration award may only be published with the consent of the parties (article 37(9), DIAC Rules).

  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

    Evidence produced and pleadings filed in arbitration proceedings in the UAE are usually considered confidential. They may be relied on in other arbitral or court proceedings between the same parties.

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

    In the UAE, the professional standards and ethical codes applicable to counsel and arbitrators will generally be those applicable to them in their respective home jurisdiction and/or those prevailing internationally, as the case may be.

  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

    The peculiarities of arbitration in the UAE have been referred to throughout this report. Importantly, a party’s choice of arbitrator should take into account the need for the arbitrator’s sound understanding of the procedural quirks that are inherent in UAE arbitration. In sum, discovery is very limited and follows the spirit of specific disclosure as known from civil law systems and expert and witness evidence has to be submitted on oath. This will minimise the potential for (a successful) challenge of the award by the award debtor during the ratification process of the award.

    Most importantly, foreign counsel is well-advised to ensure to have a valid power of attorney to represent his client. A power of attorney executed in the UAE should be notarised; for a power of attorney that is executed abroad to be recognised as valid in the UAE, it must be first notarised by a Notary Public, then legalised by the Ministry of Foreign Affairs in the country of execution and finally authenticated by the UAE Embassy in that country. In a final step, the power of attorney needs to be authenticated by the UAE Ministry of Foreign Affairs to ensure its validity before the local courts.

    Apart from this, other peculiarities any foreign practitioners, whether in their capacity as arbitrators or advising counsel, should be aware of have been referred to throughout this report.

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