Ratification of Arbitral Awards in the UAE Under the Federal Law No.6 of 2018 – What You Need to Know

February 1, 2024by Sudha Sampath0

Understanding the available avenues for appeal and the specific procedures to be followed is crucial  to address issues that may arise during the ratification process. Challenges to ratification may arise based on various grounds, including procedural irregularities, lack of a valid arbitration agreement, or violations of public policy.

 

Introduction

In the dynamic landscape of arbitration within the UAE, the process of ratifying arbitral awards holds paramount importance. Understanding the intricacies of this process is essential for any party involved in arbitration proceedings.  The ratification of an arbitral award means the formal approval or confirmation of the decision rendered by the arbitrator or an arbitral tribunal in a dispute. Ratification serves as the gateway to formal recognition and enforcement, cementing the legitimacy of arbitral decisions in the local legal system.

Initiating the Ratification Process

To kickstart the ratification process in the UAE, the first step is to submit the arbitral award to the competent court or authority designated by UAE law. Article 52 of Federal Law No.6 of 2018 states that an arbitral award shall be binding on the parties, and be enforceable as a judicial ruling once the decision confirming the award is obtained from the Court. Typically, ratification involves filing a formal application that includes the arbitral award and relevant supporting documents. This application to the court to ratify an award is almost identical to the procedure for making a regular claim in the courts, and it commences with a claim form. This legislation has delegated the authority to review the application for the ratification of the arbitration award and mandate its enforcement to the President of the Federal or local Court of Appeals, as agreed upon by the parties or within the jurisdiction where the arbitration is held. Hence, the competent court for ratification is the Court of Appeal which would have jurisdiction over the dispute, i.e., the court having supervisory jurisdiction over the arbitration tribunal. For example, if the award is passed by the tribunal with its seat of arbitration as Abu Dhabi, the Abu Dhabi Courts will be the proper Courts having supervisory jurisdiction. Similarly, if the seat of arbitration is stated as Dubai, Dubai Courts will have supervisory jurisdiction.

Documentation and Information Required

Accurate and comprehensive documentation is a key aspect of a successful ratification application. Article 55 of Federal Law No. 6/2018 mandates that the applicant should ensure that all relevant documents are meticulously compiled, such as:

  1. The original arbitral award or its certified copy;
  2. The arbitration agreement;
  3. Translations of relevant documents, attested by the relevant competent authority;
  4. Identification documents of the parties involved; and
  5. Procedural history of the arbitration.

Preliminary Assessment by the Court

The court conducts an initial assessment to ensure the application meets the procedural and formal requirements. This examination aims to identify any apparent irregularities or deficiencies in the submission. For example, the court may check if the translation of documents is accurate and if the arbitration agreement is valid under UAE law.

Notification and Service Requirements

Throughout the ratification process, parties involved are duly notified of the proceedings. Strict adherence to service requirements ensures that all relevant parties have the opportunity to present their case or raise objections. Examples include serving notices to the addresses stipulated in the arbitration agreement or, in the absence of such stipulation, to the last known addresses of the parties.

Judicial Review Process

The court undertakes a thorough examination of the arbitral award during the judicial review process. Article 55 (2) of Federal Law No. 6/2018 mandates that the court scrutinize the award as specified in Article 53 (1) of Federal Law No. 6/2018 i.e., check the following:

  1. A valid arbitration agreement exists;
  2. The person signing the arbitration agreement was competent under the law governing his capacity;
  3. Parties were given the opportunity to present their case pursuant to notice of appointment of the tribunal;
  4. The tribunal applied the law chosen by the parties;
  5. Appointment and composition of the tribunal was as per law and the agreement;
  6. Arbitral proceedings were conducted properly and the award was issued within the specified time frame;
  7. The award decides on the matters which fall within the scope of the tribunal; and
  8. The award conforms with public policy and is not in conflict with any prior decisions.

Any grounds for challenge raised by the parties are considered at this stage. For instance, if a party alleges that the arbitration process was tainted by corruption, the court will investigate this claim during the review.

While scrutinizing the request for ratification of the arbitration award, the court has the option to send it back to the arbitrators for further examination of issues not addressed during arbitration or to seek clarification if the decision lacks definitiveness, making execution impossible. In both scenarios, arbitrators must provide their decision within 3 (three) months of being notified, unless specified otherwise by law.

The law prohibits the courts from re-evaluating the substance of the tribunal’s conclusions and instead requires them to base their decision solely on procedural considerations. However, in reality, seldom the courts do end up reevaluating the arguments in a dispute. For example, the party that lost in arbitration might try to delay the approval process by bringing up the same issues in court and questioning the fairness of the decision based on procedural issues.

Surprisingly, court decisions can hinge on seemingly small technical errors, like the arbitrators not signing each page of the award or not following precise protocols for witness oaths. Therefore, it’s crucial to make sure the arbitration decision meets all the technical rules outlined in the Civil Procedure Code before trying to enforce it.

Navigating the ratification of arbitral awards in the UAE requires a strategic and informed approach. Parties can mitigate challenges and increase the likelihood of success by adhering to legal requirements, adopting best practices, and proactively addressing potential issues that may arise during the judicial review process.

Conditions for Successful Ratification

Successful ratification hinges on meeting specific criteria outlined by the legal framework. These criteria may include ensuring the arbitration agreement is valid, the award is not contrary to public policy, and the parties were treated fairly throughout the arbitration. Compliance with these conditions, coupled with the absence of challengeable issues, is instrumental in achieving a positive outcome. After the award has been acknowledged, it can be enforced just like any other judgment in the UAE courts. This process involves submitting an application to the Execution Court for enforcement.

Time Frame for Ratification

The initiation of the ratification process has no specific time limit. While the duration of the ratification process can vary, parties can anticipate specific time frames for different stages. Initial assessments by the court and the subsequent judicial review may take several months. However, factors such as the complexity of the case, the court’s caseload, and any challenges raised by the parties may influence the overall duration. According to Article 55(2) of Federal Law No. 6/2018, the Chief Justice of the Court or an assigned judge must issue a recognition and enforcement order for the arbitral award within sixty (60) days from the submission of the request, unless valid reasons for nullification are provided, demonstrating any of the cases outlined in Article 53(1) of Federal Law No. 6/2018. It is often the tendency of the losing party, once served with notice of the proceedings, to file a counter application for the annulment of the award. Additionally, the enforcement of an award is put on hold until the ratification process is fully completed. Therefore, the process of ratification and enforcement alone can take more than 18 (eighteen) months if one takes into account potential appeals.

Grounds for Challenge and Failure of Ratification

Challenges to ratification may arise based on various grounds, including procedural irregularities, lack of a valid arbitration agreement, or violations of public policy. These grounds are specified in Article 53 (1) of Federal Law No. 6/2018. Parties should be vigilant to address these potential issues promptly to prevent the failure of the ratification process. Failure may result in the non-recognition of the arbitral award, rendering it unenforceable in the UAE.

Remedies and Appeals

In the event of a challenge, parties have recourse to remedies within the legal framework. This may involve addressing identified deficiencies in the application or contesting the court’s decision. Understanding the available avenues for appeal and the specific procedures to be followed is crucial for parties seeking to address issues that may arise during the ratification process.

Practical Tips for a Smooth Ratification Process

To enhance the likelihood of a smooth ratification process, parties are advised to adhere to best practices. This includes engaging experienced legal counsel familiar with the nuances of UAE arbitration law, conducting a thorough review of all documentation before submission, and proactively addressing any potential issues that may be raised during the judicial review.

In conclusion, navigating the ratification of arbitral awards in the UAE requires a strategic and informed approach. Parties can mitigate challenges and increase the likelihood of success by adhering to legal requirements, adopting best practices, and proactively addressing potential issues that may arise during the judicial review process.

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

by Sudha Sampath

Sudha is a Senior Associate at ATB Legal. As a legal consultant she handles and extensively writes about Arbitrations in ICC, DIAC and arbitrateAD; DIFC and ADGM matters; and corporate and commercial litigations.

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