In a significant pronouncement on 16 July 2025, the Dubai Court of Cassation, while deciding Commercial Appeal No. 509 of 2025, clarified, the legal status and judicial competence of the Centre for Amicable Settlement of Disputes (the “Centre”). For the first time under Dubai’s updated conciliation regime, the Court explicitly confirmed that the Centre enjoys judicial authority in matters within its statutory jurisdiction. This articulation strengthens the Centre’s standing within the judicial hierarchy and carries implications for procedural strategy and dispute resolution practices across the Emirate.
Facts of the Case
The dispute originated from a contract dated 5 December 2018, under which Fox Softnet LLC[1] (“Fox Softnet”) was engaged by United Gas Company, Unigaz LLC[2] (“Unigaz”) for ERP software development, installation, implementation, and related services, against staged payments totalling AED 220,500.
Unigaz, alleging breach due to Fox Softnet’s failure to complete the assigned works despite having received eight out of nine instalments, filed Case No. 4425/2023 before the Dubai Court of First Instance, following referral from the Centre. The relief sought included termination of the agreement, refund of AED 198,450, return of an undeposited cheque of AED 22,050, and legal interest at 9% p.a.
The Centre referred the matter to the Dubai Court of First Instance, which heard the case on the merits and issued a judgment in favor of Unigaz, awarding AED 198,450 plus interest and the cheque return.
Fox Softnet appealed under Appeal No. 2026/2024, arguing inadmissibility due to an arbitration clause in the contract. On 8 January 2025, the Court of Appeal accepted this, dismissed the case, and held the arbitration clause barred jurisdiction.
The Dubai Public Prosecutor invoking his authority to protect “the interest of law,” appealed this judgment to the Court of Cassation, arguing that the Court of Appeal erred in its understanding of the Centre’s status and procedural rules concerning arbitration clauses.
Issue Raised in the Case
Whether the Centre constitutes a judicial forum such that a party’s failure to invoke an arbitration clause at the Centre stage (while submitting on merits) amounts to a waiver under Article 8(1) of UAE Federal Arbitration Law No. 6 of 2018, rendering the arbitration plea inadmissible at later stages.
The Applicable Legal Framework Includes
- Law No. 16 of 2009 and Law No. 18 of 2021 establishing and expanding the Centre’s jurisdiction for amicable settlement in civil/commercial disputes.
- Resolution No. 4 of 2025 clarifies the Centre’s exclusive jurisdiction (claims under AED 500,000, settlement agreements, expert appointments, etc.)
- Article 8(1) of the UAE Arbitration Law (Fed‑Law No. 6/2018) requires arbitration pleas to be raised before any substance-based defense, failing which constitutes waiver.
Together, these provisions empower the Centre not only to facilitate conciliation but also to act, within its jurisdiction, as a judicial arm of the Court of First Instance, endowed with authority to issue binding and enforceable decisions and rulings, particularly through its delegated judges.
The Court’s Observations and Ruling
- The Court, aligning with Law 18/2021 and Resolution 4/2025, firmly affirmed that the Centre is embedded in the judicial hierarchy, and cases heard before it are adjudicative and binding. In other words, the Centre is a component of the Court of First Instance, not a separate or inferior body.
- Fox Softnet appeared at the Centre on 18 September 2023, fully engaged substantively without invoking arbitration, thus effectively accepting the Centre’s jurisdiction.
- By allowing a belated arbitration plea, the appellate court ignored both procedural rules and the Centre’s judicial nature. The Cassation Court noted this neglect constituted a legal error.
- Failure to invoke arbitration before a judicial forum, here, the Centre, when merits are addressed, constitutes waiver under Article 8(1). The Court therefore set aside the Appellate decision and remanded for reconsideration consistent with this principle.
The Court held that failing to raise the arbitration clause at the Centre stage, especially given the Centre’s judicial nature, renders the arbitration defence inadmissible later.
Conclusion
The Court of Cassation conclusively determined that the Centre functions as a judicial authority, not merely an ADR body. Parties that present on merits before the Centre without reserving arbitration rights waive those rights entirely. Fox Softnet’s arbitration plea is hence deemed inadmissible. The case is remanded to the Court of Appeal for re-adjudication.
Implications for Practitioners
- The Centre now stands as a judicial tribunal, making engagement before it binding and enforceable.
- Procedural discipline requires early invocation of arbitration before substantive participation in any judicial forum, including the Centre.
- Legal counsel must assess whether to proceed through the Centre (recognising its judicial gravitas) or raise arbitration early.
- Outcomes from the Centre will now enjoy the same enforceability and judicial oversight as standard court judgments.
While obiter, this judgment sends a clear message that the Centre is now a cornerstone of Dubai’s judicial system, and involvement without an arbitration reservation is both substantive and irreversible. Parties and practitioners must recalibrate pre-litigation strategy to reflect this binding legal reality.
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[1] The Respondent Claimant in suit No. 4425 of 2023 Commercial before the Dubai Court of First Instance and Second Respondent before the Court of Cassation
[2] The Claimant in suit No. 4425 of 2023 Commercial before the Dubai Court of First Instance and the First Respondent before the Court of Cassation
