Introduction to UAE Arbitration Laws

Life cannot pass without disputes, conflicts, or cases. Justice is a dream sought by individuals involved in such conflicts, as well as those not directly affected. Justice and fairness are the foundations of stability for peoples and communities.

The rapid developments brought by globalization in commercial and economic activities among individuals, states, and legal entities have created several problems requiring fair and timely solutions. Recognizing this, the UAE legislator emphasized the importance of arbitration as an exceptional means for resolving disputes, especially local and international commercial disputes, effectively and efficiently. This approach meets the needs of investors and protects the rights of all parties, ensuring stability in transactions and the community.

Aligned with the UAE’s vision of facilitating litigation proceedings, the Federal Civil Procedures Law No. 11 of 1992 includes provisions for arbitration. Later, additional federal legislation was introduced, such as Federal Law No. 17 of 2016 concerning Mediation and Conciliation Centres in Civil and Commercial Disputes, and its subsequent amendments. Additionally, Federal Law No. 6 of 2018 concerning Arbitration, amended by Federal Decree-Law No. 15 of 2023, was enacted.

Key Arbitration Centers in the UAE

• Abu Dhabi International Arbitration Centre (arbitrateAD)
• Dubai International Arbitration Centre (DIAC)
• Sharjah International Commercial Arbitration Centre
• Ajman Center for Commercial Conciliation & Arbitration

Arbitration is the best solution for specialized problems in various business fields. The mentioned arbitration centers have set regulatory rules to ensure fair judgments that satisfy all parties involved.

Dubai International Arbitration Centre (DIAC) Rules

Introduction to the Centre

The Dubai International Arbitration Centre (DIAC) is the largest center in the region for resolving disputes through alternative methods. As a non-profit organization, DIAC allows parties of all nationalities to settle commercial disputes outside the judicial courts. Established in 1994 as the Conciliation and Commercial Arbitration Centre with the Dubai Chamber of Commerce and Industry, DIAC became a separate entity in 2021 under Decree No. 34 of 2021 by His Highness Sheikh Mohammed bin Rashid Al Maktoum. This decree updated DIAC’s governance framework, enhancing its position as a leading arbitration center in the UAE and the region.

New Arbitration Rules

On 21 March 2022, DIAC’s new arbitration rules came into effect. These rules complement federal law by enhancing the efficiency and speed of proceedings. They aim to achieve excellence in providing dispute resolution services through modern electronic means.

Commencement of Arbitration Proceedings

To initiate arbitration under DIAC rules, a party must submit a written request as detailed in Article 4 of the Rules. The request fee, payable upon submission, ensures registration. The Centre then notifies the Respondent of the Claimant’s request. According to Article 5, the Respondent must reply within 30 days, with the option to file a counterclaim.

Formation and Function of the Arbitral Tribunal

The arbitral tribunal determines its jurisdiction and addresses any objections as primary matters. Parties can choose their representatives. The tribunal must consist of an odd number of arbitrators or a sole arbitrator if not otherwise agreed. Neutrality, independence, and availability are crucial for arbitrators. Any party can request the recusal of an arbitrator within 15 days of appointment notice or awareness of justifying circumstances.

Once formed, the tribunal agrees on the arbitration language and sets the initial meeting. The Claimant submits a detailed statement, and the Respondent responds within the determined timeframe. Each party bears the burden of proving the facts supporting their case. Meetings are confidential, and witness testimony may be included.

Confidentiality and Final Awards in Arbitration

After the defense submission, the tribunal announces the completion of proceedings and renders the final award within six months, extendable by mutual consent. If the parties settle before the final award, the tribunal issues a termination decision, possibly recording the settlement as a consensual arbitral award. The final award is executed after court ratification.