Arbitration Centres, and Laws in the UAE

When arbitration was introduced in the United Arab Emirates (“UAE”), it was largely used by international businesses, its usage has grown over time. Today, both the international and the local business community increasingly opt arbitration to resolve disputes. There are seven arbitration bodies relevant to international arbitration based in the UAE. Onshore, the primary local arbitral institutions are the Dubai International Arbitration Centre (“DIAC”) and the newly established Abu Dhabi International Arbitration Centre (“ArbitrateAD”), which replaced the Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”) as of 1 February 2024. Parties refer their disputes to the Sharjah International Commercial Arbitration Centre (“Tahkeem”), the Ras Al-Khaimah Centre for Reconciliation and Commercial Arbitration (“RAK Chamber”), or the International Islamic Centre for Reconciliation and Arbitration.

Additionally, the ICC established a case management office in the Abu Dhabi Global Market (“ADGM”) in 2021. In the Dubai International Financial Centre (“DIFC”), the Saudi Center for Commercial Arbitration (“SCCA”) and the Russian Arbitration Center (“RAC”) of the Institute of Modern Arbitration both opened their first offices outside their home jurisdictions in 2023.

The UAE offers three arbitration regimes: the Federal UAE Arbitration Law, the DIFC Arbitration Law, and the ADGM. Each regime operates within a defined jurisdiction:

UAE Arbitration Law (Federal Law No. 6 of 2018, as amended by Federal Decree-Law No 15 of 2023): Governs arbitrations seated within the UAE, extending to international commercial arbitrations held outside the UAE if agreed upon by the parties.
DIFC Arbitration Law (DIFC Law No. 1 of 2008, as amended): Applies to DIFC-seated arbitrations, with certain provisions applicable to arbitrations seated outside the DIFC.
ADGM Arbitration Law (Arbitration Regulations 2015): Governs arbitrations seated in the ADGM or those where the parties agree to apply the Regulations, even if they are not based in the ADGM.

Common to all three regimes are the principles of party autonomy, fairness, confidentiality, and minimal court intervention which makes it a balanced and efficient dispute resolution process.

A valid written agreement is essential for commencing arbitration proceedings in all three jurisdictions. The laws in all three regimes also recognize electronic communications and exchanges of statements as valid forms for commencing arbitration.

Composition of the Arbitral Tribunal

Parties may select the number of arbitrators, which must be an odd number. In the absence of an arbitration agreement, the UAE Arbitration Law defaults to three arbitrators (Article 11, 12 and 13), while the DIFC (Chapter 3) and ADGM (Chapter 3) default to one arbitrator. The ADGM specifically allows for the joinder of third parties under certain conditions.

Jurisdiction of the Arbitral Tribunal

Each tribunal rules on its own jurisdiction, including the validity of the arbitration agreement and the scope of the dispute. Challenges to jurisdictional decisions differ. As per Decree 29 of 2024, the Judicial Committee for Resolving Conflicts of Jurisdiction between the Dubai International Financial Centre Courts and Dubai Courts. It is an independent judicial committee that determines the competent courts/centre having jurisdiction over any claim or application when a conflict of jurisdiction arises. The committee also determines the enforceability of judgment in the event of delivery of conflicting judgements between the DIFC Courts and Dubai Courts.

In ADGM, the tribunal’s ruling can be challenged through agreed-upon arbitral processes or by the ADGM Court under specific conditions.

Interim Measures

Tribunals in all three jurisdictions have the power to order interim measures to protect the interests of the parties, however, the requesting party may be liable for damages if the interim measure is later found to be improper.

Conduct of Proceedings

Parties have the freedom to agree on procedural rules. In the absence of an agreement, the tribunal decides, prioritizing fairness and efficiency. Procedural rules include but are not limited to commencement dates, seat, language, and written/oral proceedings. The ADGM allows for the joinder of third parties under certain circumstances.

The Courts play a supervisory role, they can assist in appointing arbitrators, resolving challenges, enforcing interim measures, and taking evidence. The UAE, DIFC and ADGM courts have additional powers in specific scenarios, ensuring the arbitration process remains fair and just.

Challenging and Appealing an Award

The UAE Arbitration law uses the term “nullification,” while the DIFC and ADGM use the term “setting aside” for the process of challenging an award. Each regime has its own methods for challenging awards:

UAE: Nullification applications go to the UAE Court of Appeal, with appeals possible to the UAE Court of Cassation (Art 53 to 57). For a successful challenge against an arbitral award, the challenging party must establish at least one of the eight grounds in Article 53(1) of Federal Law No 6 of 2018. These fall into five general categories:

o Defects in the arbitration agreement; o Lack of capacity of one of the parties; o procedural unfairness o incorrect constitution of the tribunal o lack of jurisdiction of the tribunal

DIFC:Applications to set aside awards are made to the DIFC Court, whose decision is final (Art 41 of DIFC arbitration law). Under this Article, an arbitral award can be contested on grounds similar to those outlined in Federal Law No 6 of 2018, but with a three-month period for filing a challenge instead of 30 days.
ADGM: Recourse is through setting aside applications to the ADGM Court, with no further appeal (Chapter 8 (58) of ADGM arbitration rules). An arbitration award issued in the ADGM can be annulled under 58(2) of the ADGM Arbitration Regulations, using the same grounds applicable in the DIFC. The deadline to file an application for setting aside an award is three months. Additionally, the recognition and enforcement of such awards are governed by articles 60 to 62 of the ADGM Arbitration Regulations, which outline the procedures for seeking or contesting enforcement.

Grounds for challenge mainly invalid agreements, procedural irregularities, or awards exceeding the scope of the agreement.

Challenging an International Award

In the UAE, international awards are regulated by Federal Law No 6 of 2018 and the New York Convention, which outlines specific, limited grounds for contesting enforcement, such as if the award is not yet binding or has been annulled in its original jurisdiction.

Recognition and Enforcement of Awards

In the UAE, domestic arbitral awards require court ratification (by the Court of First Instance) before enforcement, while foreign awards are enforced under the New York Convention or local laws.

Both the DIFC and ADGM can recognize and enforce both domestic and foreign awards. All three jurisdictions adhere to the New York Convention, ensuring a common framework for enforcing foreign arbitral awards.

Written by – Sanjeev Kandathil