The United Arab Emirates (“the UAE”) has solidified its position as a global hub for international trade, business, and dispute resolution, making it a crucial jurisdiction for arbitration. Arbitration has become the preferred mode of dispute resolution in the UAE, particularly in commercial disputes, owing to its flexibility, confidentiality, and enforceability. The country’s legal framework for arbitration is robust, supported by several key arbitration institutions in the UAE and jurisdictions designed to accommodate both domestic and international disputes.
Legal Framework for Arbitration in the UAE
The UAE has a comprehensive arbitration regime, aligned with international standards, governed by Federal Law No. 6 of 2018 concerning arbitration (the “UAE Arbitration Law”) which is based on UNCITRAL Model Law 1985. The UAE is also a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which strengthens the enforceability of arbitral awards both domestically and internationally.
This blog is a part of our Arbitration Services
Onshore arbitration and offshore arbitration
Onshore arbitration in the UAE applies to most of the country’s territory and is governed by federal laws and regulations, including the UAE Civil Code and UAE Commercial Companies Law, which regulate business, trade, and various activities. This onshore jurisdiction is subject to UAE federal laws and follows a civil law system. In contrast, offshore arbitration occurs in the UAE’s free zones, which operate as independent jurisdictions with their own legal and regulatory frameworks, often based on common law principles. Key examples include the Dubai International Financial Centre (DIFC), established in 2004, and the Abu Dhabi Global Market (ADGM), founded in 2015. These free zones have their own specialized courts, such as the DIFC Courts and ADGM Courts, and function autonomously within the UAE legal system, providing a flexible, common law-based legal environment for businesses operating in these areas.
Arbitration institutions in UAE
The Abu Dhabi Commercial, Conciliation and Arbitration Centre
In 1993, the Abu Dhabi Chamber of Commerce established the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) to resolve trade disputes through conciliation and arbitration. The Centre maintains panels that register the names of specialists in areas such as conciliation, arbitration, expertise, and translation. Conciliation is conducted by a mediator accredited by the Centre or chosen by the disputing parties. While the conciliator’s decision is non-binding, it serves as a recommended proposal for resolving the dispute. The default language of proceedings is Arabic, unless the parties expressly agree to use English.
Dubai International Arbitration Centre (DIAC)
The Dubai International Arbitration Centre (DIAC) has emerged as one of the most prominent institutions for resolving disputes in the UAE, especially in international arbitration. Established in 1994 under the auspices of the Dubai Chamber of Commerce and Industry, DIAC has grown to become an independent arbitration body that provides a cost-effective, flexible, and efficient mechanism for resolving disputes, both domestically and internationally. DIAC operates under its own arbitration rules called Dubai International Arbitration Centre (DIAC) Arbitration Rules 2022, and it align with international best practices and the UNCITRAL Model Law. DIAC offers state-of-the-art facilities, expert arbitrators, and a comprehensive, flexible set of rules catering to both domestic and international cases.
Dubai International Financial Centre – London Court of International Arbitration (DIFC-LCIA)
The DIFC-LCIA Arbitration Centre is a joint venture between the Dubai International Financial Centre (DIFC) and the London Court of International Arbitration (LCIA). DIFC-LCIA is well-suited for resolving high-value commercial disputes with a neutral, English-language environment and a common law framework. It is in DIFC, Dubai and the institution follows LCIA rules, offering parties a straightforward, modern, and flexible set of rules that comply with international arbitration standard. The DIFC-LCIA is widely used for international disputes due to its international recognition, neutrality, and ability to enforce awards in various jurisdictions via the New York Convention.
Sharjah International Commercial Arbitration Centre (Tahkeem)
Tahkeem is designed to serve Sharjah’s business community. It provides arbitration services in commercial disputes and other forms of dispute resolution. The Centre follows Tahkeem Arbitration Rules, which are customized to suit the needs of businesses in Sharjah. Tahkeem promotes cost-effective and flexible dispute resolution services and is growing in prominence within the UAE. Tahkeem’s primary mission goes beyond arbitration; it aims to foster economic and investment stability in the UAE by providing a secure environment for both local and foreign investors. To fulfill this mission, Tahkeem ensures that disputes are resolved swiftly, efficiently, and in a legally recognized manner that satisfies all parties involved. As a preferred non-profit semi-government institution, Tahkeem’s reputation is built on its accuracy, flexibility, professionalism, and cost-effective fee structure. One of its key advantages is its exceptional ability to issue awards within six months from the first arbitration hearing, a record unmatched by many arbitration bodies.
Ras Al Khaimah International Arbitration Centre (RAKICC)
RAKICC provides commercial arbitration services in Ras Al Khaimah, particularly for businesses operating within the free zone. It is known for its focus on efficiency and transparency in dispute resolution. RAKICC follows international arbitration rules but with an emphasis on quick and cost-effective proceedings. RAKICC’s focus on ease of access and low costs makes it an attractive forum for SMEs and local businesses.
International Islamic Centre for Reconciliation and Arbitration (IICRA)
IICRA specializes in resolving disputes related to Islamic finance. It provides reconciliation and arbitration services based on Sharia principles, making it a unique institution catering to the growing Islamic finance industry. Arbitration is conducted under rules compliant with Sharia law. IICRA is highly regarded for its expertise in resolving disputes that require adherence to Islamic financial principles.
The UAE’s arbitration landscape offers a variety of institutions and legal frameworks that accommodate both domestic and international commercial disputes. Arbitration in the UAE is highly flexible and supported by a modern legal framework that ensures the enforceability of arbitral awards both within the country and globally. Whether parties opt for DIAC, DIFC-LCIA, or ADCCAC, they can expect a process that aligns with international standards and best practices, reinforcing the UAE’s status as a leading hub for arbitration in the region.
