Let’s uncover the essentials of initiating arbitration proceedings in the UAE in this guide. From legal frameworks to procedural steps, we break down everything you need to know to navigate arbitration proceedings effectively.
Introduction to Arbitration in the UAE
The UAE stands out as a hub for arbitration, being a signatory to major international conventions like the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (ratified in 2006) and the ICSID Convention (ratified in 1981). These conventions facilitate the recognition and enforcement of arbitral awards across multiple jurisdictions, strengthening the UAE’s position in global dispute resolution. Domestically, arbitration in the UAE is governed by Federal Law No. 6 of 2018 (the UAE Arbitration Law), primarily based on the UNCITRAL Model Law, incorporating unique provisions tailored to the UAE’s legal framework. Additionally, there exists different arbitration rules applicable for each arbitral institution.
This blog is a part of our Global Arbitration Services and Arbitration: An Introduction with Special Reference to the United Arab Emirates blogpost.
Legal Framework and Institutions
The UAE Arbitration Law governs arbitration in the UAE, applicable to arbitrations seated in any emirate outside financial free zones. To name a few, the prominent arbitral institutions in the UAE include:
Dubai International Arbitration Centre (DIAC)
DIAC is a premier arbitration institution in the UAE. It provides a modern arbitration framework with user-friendly rules catering to domestic and international disputes. DIAC is known for its state-of-the-art facilities and services that promote efficient dispute resolution.
International Court of Arbitration of the International Chamber of Commerce (ICC)
The ICC is one of the most prominent global arbitration institutions, with a regional presence in the Mena region especially in the UAE. Its International Court of Arbitration administers arbitrations under the ICC Rules, which are widely recognized for their flexibility and reliability. The ICC caters to a diverse range of disputes across industries and jurisdictions.
Abu Dhabi International Arbitration Centre (arbitrateAD)
Established in Abu Dhabi, arbitrateAD aims to position Abu Dhabi as a global hub for arbitration. The institution offers a specialized arbitration framework with rules emphasizing speed, efficiency, and neutrality. It supports parties in resolving both commercial and investment disputes.
Sharjah International Commercial Arbitration Centre (Tahkeem)
Based in Sharjah, Tahkeem focuses on resolving commercial disputes efficiently and impartially. The institution provides tailored arbitration services for businesses, offering alternative dispute resolution methods that align with Sharjah’s business ecosystem and legal framework.
Each institution offers distinct procedural rules, and the choice of institution often depends on the nature and location of the dispute.
Duties and Immunity of Arbitrators
Arbitrators must maintain impartiality and independence throughout the proceedings. Upon nomination, arbitrators are required to disclose any circumstances that may give rise to doubts about their neutrality (Article 10(3), UAE Arbitration Law). These obligations persist during the entire arbitration process. While arbitrators were previously liable under the UAE Penal Code for breaches of neutrality, the 2018 amendments to the Arbitration Law now provide specific immunity, shielding arbitrators from liability for their conduct during the proceedings. Institutional rules further strengthen these protections.
Procedural Steps in Arbitration
Review and Draft the Arbitration Agreement
A valid arbitration agreement is the cornerstone of the process. The agreement must be in writing and clearly outline the parties’ intent to resolve disputes through arbitration (Article 7, UAE Arbitration Law). It should specify the arbitral institution, governing law, and procedural rules.
File the Notice of Arbitration/Request for Arbitration
Arbitration proceedings commence with the filing of a Notice of Arbitration/Request for Arbitration. This document must include:
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- The names and contact details of the parties.
- A summary of the dispute.
- Relief or remedies sought.
- Reference to the arbitration agreement.
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The Notice/Request must be served on the opposing party per the chosen arbitration institution’s rules. Under the DIAC Rules, arbitration proceedings are deemed to have commenced on the date the complete Notice of Arbitration is received by DIAC.
The procedures for commencing arbitration at arbitrateAD, ICC, and Tahkeem are broadly similar to those under DIAC, requiring the claimant to file a Notice or Request for Arbitration containing the names of the parties, a summary of the dispute, the relief sought, and a reference to the arbitration agreement. In all institutions, the arbitration proceedings officially commence when the respective Centre receives a complete Notice or Request for Arbitration. However, the DIAC Rules specifically highlight that proceedings commence when DIAC receives the complete Notice. At the same time, institutions like ICC and Tahkeem emphasize their Secretariat or Centre’s confirmation of receipt, adding a layer of formal acknowledgment. Additionally, the ICC process requires more detailed submissions, such as proposals on arbitrator qualifications, reflecting its international focus. These nuanced procedural differences reflect each institution’s tailored approach to arbitration.
Appointment of Arbitrators
The arbitration agreement typically outlines the process for appointing arbitrators along with the number of arbitrators to be appointed. Without such provisions, the arbitral institution will appoint the arbitrators (Article 11, UAE Arbitration Law). Arbitrators must meet specific qualifications and remain impartial throughout the proceedings.
Draft and Submit the Statement of Claim
The claimant must file a Statement of Claim detailing the case facts, legal arguments, and the relief sought. Supporting evidence must also be submitted. Article 31 of the UAE Arbitration Law specifies submitting all relevant documents and evidence.
Respondent’s Reply and Counterclaims
The respondent files a reply, addressing the claims and if applicable, raising any counterclaims. This stage is crucial for defining the scope of the dispute. Any jurisdictional objections must also be raised at this stage (Article 20, UAE Arbitration Law).
Preliminary Hearings and Procedural Orders
The arbitral tribunal may convene preliminary hearings to establish the timetable for the proceedings and address procedural matters, such as document disclosure and witness testimony. Article 23 of the UAE Arbitration Law grants the tribunal discretion to determine procedural rules without party agreement.
Evidence and Hearings
Evidence is submitted according to the agreed procedural rules. The IBA Rules on Taking Evidence in International Arbitration are commonly adopted in UAE arbitrations. Hearings may involve oral pleadings, witness examinations, and expert testimonies. Under Article 33 of the UAE Arbitration Law, tribunals may request court assistance to compel evidence or witnesses.
Interim Measures
Both courts and arbitral tribunals in the UAE can issue interim measures to preserve assets, maintain the status quo, or prevent imminent harm to the arbitration process (Article 21, UAE Arbitration Law). Tribunals may require security for costs when granting such measures.
Award Deliberation and Issuance
The arbitral tribunal deliberates and issues a final award, which the arbitrators must sign in writing. It must also include reasons for the decision unless otherwise agreed upon by the parties (Article 41, UAE Arbitration Law). The award must be rendered within six months of the first hearing, with a possible six-month extension.
Recognition and Enforcement
The UAE’s adherence to the New York Convention ensures the enforceability of foreign awards. Domestic awards require ratification by the Court of Appeal before enforcement (Articles 52 and 53, UAE Arbitration Law). Parties have 30 days from the date of the award’s notification to challenge or appeal.
Court Involvement and Appeals
While arbitration limits court intervention, local courts assist in appointing arbitrators, interim measures, and enforcing awards. Challenges to arbitral awards are permitted on limited grounds, including procedural irregularities or conflicts with public policy (Article 53, UAE Arbitration Law).
Arbitration in the UAE offers an efficient and flexible mechanism for resolving disputes, with a legal framework that balances autonomy and judicial support. By understanding the procedural steps and leveraging the expertise of arbitral institutions, parties can achieve fair and enforceable resolutions tailored to their needs.
