Arbitration serves as an alternative dispute resolution method, providing parties with a flexible and efficient means to resolve conflicts outside traditional court systems. In the UAE, arbitration law is widely embraced for its fairness, neutrality, and enforceability of arbitral awards. This guide delves into settling disputes during arbitration in the UAE, elucidating its procedures, advantages, and significant considerations.
Understanding Settlement in Arbitration Law:
Settlement in arbitration denotes resolving disputes through mutual agreement, typically sans formal arbitral awards. Unlike litigation, where court-imposed judgments prevail, arbitration empowers parties to control outcomes, rendering settlement an appealing choice for collaborative resolutions.
Benefits of Settlement during Arbitration:
Settling disputes during arbitration proves economically advantageous, curtailing expenses related to legal fees, expert witnesses, and administrative costs.
Settlement negotiations expedite resolution, saving time otherwise spent in arbitration hearings.
Private settlement discussions ensure confidentiality, fostering discreet dispute resolution.
Settlements empower parties to maintain control and foster commercial relationships by averting adversarial arbitration.
Tailored settlement agreements cater to parties’ specific needs, offering customized dispute resolutions.
Procedures for Settlement during Arbitration:
Settlement negotiations can commence at any arbitration stage, pre or post-hearing.
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Consent:
Parties must voluntarily agree to negotiations, showcasing genuine intent for resolution.
Parties may opt for confidentiality agreements to safeguard privacy.
Neutral mediators or conciliators facilitate discussions, aiding in mutual resolution.
Drafting Settlement Agreement: Agreements must be documented and signed by all parties for enforceability.
Position under UAE Federal Arbitration Law:
Consent Award: If, before any final award, the Parties amicably settle the dispute, they may request that the terms of settlement be recorded before the Arbitral Tribunal, which is bound, in this case, to issue a consent award setting out those terms and ending proceedings. Such an award has the same force and effect as any other award.
Position under DIAC Arbitration Rules 2022:
Settlement: If prior to the issuance of the Final Award the parties agree on a settlement of the dispute, the Tribunal shall terminate the arbitration and issue a termination order. If requested jointly by the parties, the Tribunal may record the settlement in the form of a consent award. Such award shall contain a statement that it is an award issued with the parties’ consent.
Key Considerations for Settlement:
Independent legal counsel ensures parties comprehend rights, obligations, and settlement implications.
Settlements must adhere to arbitration laws for enforceability.
Implications of settlements, including waivers, merit careful consideration.
Courts enforce settlement agreements arising from arbitration.
Executed settlements typically conclude disputes, barring further legal action.
Conclusion:
Settling disputes during arbitration law offers an efficient alternative to litigation, fostering flexibility and cost-effectiveness. By understanding settlement benefits, procedures, and considerations, parties navigate arbitration effectively, achieving mutually satisfactory outcomes tailored to their needs. Settlement negotiations play a pivotal role in enhancing efficiency, collaboration, and dispute resolution effectiveness in the UAE’s arbitration landscape.
