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Legal framework

National arbitration laws
What legislation applies to arbitration in your jurisdiction?

In the Dubai International Financial Centre (DIFC) Economic Free Zone, arbitration is governed by the DIFC Arbitration Law (1/2008), as amended by the DIFC Arbitration Law Amendment Law (6/2013). 

Mandatory laws
Are there any mandatory laws?

The arbitration provisions of the DIFC Arbitration Law are mandatory, in the sense that they govern all arbitrations with a seat in the DIFC. The DIFC Arbitration Law does not prohibit the parties from choosing to make use of institutional or ad hoc rules of arbitration. However, where any provision of the DIFC Arbitration Law is non-derogable, that provision will prevail over any inconsistent provision of the arbitration rules adopted by the parties.

New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?

The United Arab Emirates acceded to the New York Convention pursuant to Federal Decree 43/2006.

Pursuant to the law establishing the DIFC (Article 5 of UAE Federal Law 8/2004), the DIFC is bound by all international conventions ratified by the United Arab Emirates.

Are there any reservations to the general obligations of the convention?

No. 

Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?

The United Arab Emirates has ratified the following conventions:

  • the 1965 Washington Convention on the Settlement of Disputes between States and Nationals of Other States, in 1982;
  • the 1987 Gulf Cooperation Council for the Execution of Judgments, Delegations and Judicial Notifications, in 1996;
  • the 1983 Riyadh Convention on Judicial Cooperation between States of the Arab League, in 1999; and
  • the 1907 Hague Convention for the Pacific Settlement of International Disputes, in 2008.

The United Arab Emirates has entered into the following bilateral treaties relating to judicial cooperation and arbitration:

  • United Kingdom and Northern Ireland – the Treaty on  Judicial Assistance in Civil and Commercial Issues (2007);
  • Morocco – the Treaty on Judicial Cooperation in  Civil, Commercial and Personal Matters (2006);
  • Sudan – the Treaty on Cooperation in Civil, Commercial and Personal Matters; and the Treaty on Service of Judicial and Extrajudicial Documents, Obtaining Evidence, Commissions and the Recognition and Enforcement of Foreign Judgments and Arbitral Awards (2005);
  • Syria – the Agreement on Legal and Judicial Cooperation (2002);
  • Egypt – the Agreement on Legal and Judicial Cooperation (2000);
  • Jordan – the Agreement on Legal and Judicial Cooperation (1999);
  • France – the Treaty on Judicial Cooperation, Recognition and Enforcement of Judgments in Civil and Commercial Matters (1992);
  • Somalia – the Agreement on Legal and Judicial Cooperation (1972);
  • India – the Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Judicial Commissions, Execution of Judgments and Arbitral Awards (2000); and
  • Tunisia – the Agreement on Judicial Cooperation and Enforcement of Judgments (1975).

The United Arab Emirates has entered into the following bilateral investment treaties:

  • Jordan – the Convention for Mutual Protection and Encouragement of Investments (2009);
  • Uzbekistan – the Convention for Encouragement and Protection of Investments (2008) and the Convention for Mutual Protection and Encouragement of Investments (2007);
  • Turkey – the Convention for Mutual Protection and Encouragement of Investments (2006);
  • Belgium-Luxembourg Economic Union – the Convention for Mutual Protection and Encouragement of Investments (2005);
  • Korea – the Convention for the Encouragement and Protection of Investments (2004);
  • Ukraine – the Convention for Mutual Protection and Encouragement of Investments (2004);
  • Sudan – the Convention for Mutual Protection and Encouragement of Investments (2002);
  • Algeria – the Convention for Mutual Protection and Encouragement of Investments (2002);
  • Mongolia - the Convention for Mutual Protection and Encouragement of Investments (2002);
  • Belarus - the Convention for the Encouragement and Protection of Investments (2001);
  • Sweden – the Convention for Mutual Protection and Encouragement of Investments (2000);
  • Syria – the Convention for the Encouragement, Protection and Guarantee of Investment (1999);
  • Switzerland – the Convention for Mutual Protection and Encouragement of Investments (1999); and
  • Organisation of Islamic Cooperation (OIC) – the Agreement for the Protection, Promotion and Guarantee of Investments among OIC Member States (1981).  

UNCITRAL
Has your jurisdiction adopted the UNCITRAL Model Law?

The DIFC Arbitration Law is based substantially on the UNCITRAL Model Law (1985/2006). 

Reform
Are there any impending plans to reform the arbitration laws in your jurisdiction?

No.

Arbitration agreements

Validity
What are the validity requirements for an arbitration agreement?

Article 12(3) of the DIFC Arbitration Law provides that an arbitration agreement shall be in writing. Article 12(4) provides that an arbitration agreement will be deemed to be in writing if its content is recorded in any form, whether or not the arbitration agreement is concluded by conduct or by other means. 

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

Under Article 13(1) of the DIFC Arbitration Law, the DIFC court will dismiss or stay any substantive claim that has been brought before it in breach of an arbitration agreement, regardless of whether the seat of the arbitration is within or outside the DIFC.

Consolidation
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

Tribunals do not have express powers to consolidate separate arbitration proceedings under the DIFC Arbitration Law.  

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

The parties to a dispute are expected to agree on the substantive law to be applied to the dispute (Article 35(1)). 

Article 35(2) of the DIFC Arbitration Law provides that, absent the parties’ agreement, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.

Separability
Are there any provisions on the separability of arbitration agreements?

Article 23(1) of the Arbitration Law states that an arbitration clause which forms part of a contract must be treated as an agreement independent of the other terms of the contract. A tribunal decision that the contract is null and void will not by itself determine the invalidity of the arbitration clause.

Multiparty agreements
Are multiparty agreements recognised?

Multi-party agreements are recognised by Article 17(3)(c) of the DIFC Arbitration Law, which provides that the DIFC court shall  appoint the entire tribunal where multiple parties  have been unable to agree to arrange themselves into claimant and respondent groups. 

Arbitral tribunal

Criteria for arbitrators
Are there any restrictions?

Article 17(1) of the DIFC Arbitration Law provides that no arbitrator shall be precluded by reason of his nationality from acting as arbitrator, unless otherwise agreed by the parties. 

Contractual stipulations
What can be stipulated about the tribunal in the agreement?

The parties are at liberty to stipulate their own requirements for the appointment of arbitrators. 

Default requirements
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?

Under Articles 16(1) and (2) of the DIFC Arbitration Law, the parties are free to determine the number of arbitrators, provided that this is an odd number. If there is no such determination, the number of arbitrators shall be one. 

Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

Under Article 18(1) of the DIFC Arbitration Law, before and after accepting an appointment, the arbitrators are under a duty to disclose to the parties any matter that is likely to give rise to justifiable doubts as to their impartiality or independence.

Pursuant to Article 18(2), an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence or if he or she does not possess the qualifications agreed by the parties. A party may challenge an arbitrator that it has appointed, or in whose appointment it has participated, only if it becomes aware of justifiable reasons after the appointment.

Unless otherwise agreed by the parties, challenges based on an arbitrator’s lack of impartiality, lack of independence or lack of the qualifications dictated by the arbitration agreement are governed by Articles 19(2) and (3) of the DIFC Arbitration Law. Consequently, a party must make a challenge within 15 days of becoming aware of the constitution of the tribunal or of the facts supporting the challenge. The tribunal shall decide on the challenge unless the other party accepts the challenge or the arbitrator concerned withdraws from the arbitration. Where a challenge is unsuccessful, the DIFC court can be asked finally to decide the challenge. DIFC court decisions in this regard are not subject to appeal. The tribunal may continue with the arbitration pending the decision of the court.  

Jurisdictional objections
How should an objection to jurisdiction be raised?

Under Article 23(1) of the DIFC Arbitration Law, the tribunal may rule on a challenge to its jurisdiction that has been raised under Article 23(2) no later than the date on which the party submitted its defence or, for another party, the date on which it issued its first written statement in the arbitration. A plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during proceedings. Article 23(3) provides that if the tribunal has decided that it has jurisdiction, any party may, within 30 days, request the DIFC court to finally decide the challenge.

Replacement of an arbitrator
Why and how can an arbitrator be replaced?

Article 20(1) of the DIFC Arbitration Law provides that if, as a matter of fact or law, an arbitrator becomes unable to perform his or her functions or fails to act without undue delay, the arbitrator’s mandate shall be terminated by the parties’ agreement or if the arbitrator voluntarily withdraws. In the absence of an agreement, or if a controversy still remains, a party may refer the matter to the DIFC court. Article 21 sets out the procedure for the appointment of a substitute arbitrator.

Powers and obligations
What powers and obligations do arbitrators have?

Article 24(1) of the DIFC Arbitration Law gives the tribunal extensive powers to order interim measures. Article 24(1) largely reflects similar provisions found in the English Arbitration Act 1996. The tribunal will have the powers set out in Article 24(1), unless the parties have specifically agreed otherwise.

Pursuant to Article 25, the parties must be treated equally and be given a full opportunity to present their case.

Liability of arbitrators
Are arbitrators immune from liability?

Under Article 22 of the DIFC Arbitration Law, arbitrators are not liable for any act or omission in connection with an arbitration, unless they are shown to have caused damage by conscious and deliberate wrongdoing. 

Communicating with the tribunal
How do the parties communicate with the tribunal?

The DIFC Arbitration Law contains no express provisions on how the parties are to communicate with the tribunal.

In practice, the parties will communicate with the tribunal in writing, with copies sent to all parties and to the administrative institution, as the case may be. Meetings with the tribunal may take place in person or via any means of telecommunication, including video-link. 

With the exception of a party’s initial approach to a potential arbitrator to determine whether he or she is free to serve as arbitrator, ex parte communications with a tribunal are not permitted. Article 31(3) states that all statements, documents or other information supplied to the tribunal by one party must be communicated to the other party.

Reaching decisions
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

Under Article 36 of the DIFC Arbitration Law, any decision of the tribunal shall be made by a majority of all its members, unless otherwise agreed by the parties. However, questions of procedure may be decided by the presiding arbitrator, if so authorised by the parties or all members of the tribunal.

Arbitrability
Are there any disputes incapable of being referred to arbitration?

Article 12(1) of the DIFC Arbitration Law provides that an arbitration agreement may provide for the arbitration of contractual and non-contractual disputes arising out of a defined legal relationship. Neither the agreement nor the parties need have any connection to the DIFC.

Under Article 12(2), save where the DIFC court orders otherwise, agreements to arbitrate disputes under DIFC contracts of employment and contracts with consumers may not be enforced except:

  • with the employee’s or consumer’s written consent after the dispute has arisen; 
  • where the employee or consumer has submitted to arbitration proceedings commenced under the arbitration agreement; or
  • where the DIFC court has made an order rejecting the application of Article 12(2) on the grounds that it is not detrimental to the interests of the employee or consumer for the dispute to be referred to arbitration instead of being determined before a court.

Can the arbitrability of a dispute be challenged?

Article 23(3) provides that the tribunal may rule on a challenge to its jurisdiction that has been raised under Article 23(2) no later than the date on which the party submitted its defence or, for another party, the date on which it issued its first written statement in the arbitration. A plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during proceedings.

Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

The DIFC Arbitration Law recognises the principle of competence-competence. Article 23(3) provides that the tribunal may rule on a challenge to its jurisdiction that has been made no later than the date on which the party submitted its defence or, for a third party, the date on which it issued its first written statement in the arbitration. A plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during proceedings.

Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Article 28 of the DIFC Arbitration Law provides that, subject to any agreement between the parties (eg, contained in any agreed arbitration rules), an arbitration is commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. 

Limitation periods
Are there any limitation periods for the commencement of arbitration?

No such limitation periods are identified in the DIFC Arbitration Law.  

Procedural rules
Are there any procedural rules that arbitrators must follow?

Under Article 26(1) of the DIFC Arbitration Law, arbitrators must follow the procedural rules selected by the parties.

Pursuant to Article 26(2), where the parties have not agreed on procedural rules or where the relevant procedural rules are silent on any particular matter, the tribunal may, subject to the provisions of the DIFC Arbitration Law, conduct the arbitration in such manner as it sees fit.

Under Article 30(1) of the DIFC Arbitration Law, unless the parties have agreed otherwise, the claimant shall state:

  • the facts supporting its claim;
  • the points at issue; and
  • the relief or remedy sought.

Likewise, the respondent shall state its defence in respect of these particulars. Under Article 30(2), a party may amend or supplement its claim or defence at any time, unless the tribunal believes it inappropriate to do so by reason of delay. 

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

There are no provisions under the DIFC Arbitration Law which prohibit arbitrators from issuing dissenting opinions. 

Judicial assistance
Can local courts intervene in proceedings?

Article 11 of the DIFC Arbitration Law lists the articles pursuant to which the DIFC courts will have the authority to perform functions of arbitration assistance and supervision. 

The DIFC court may:

  • decide on a challenge against an arbitrator (Article 19(3));
  • enforce an interim measure ordered by a tribunal (Article 24(2));
  • provide assistance in taking evidence (Article 34);
  • set aside an award of a tribunal (Article 41);
  • recognise and enforce an award (Articles 42 and 43); and
  • refuse to recognise or enforce an award (Article 44).

Subject to any process agreed between the parties in the arbitration agreement, the DIFC court may:

  • order the disclosure of information relating to the arbitral proceedings (Article 14);
  • appoint an arbitrator (Articles 17(3), 17(4) and 17(5));
  • terminate the mandate of an arbitrator (Article 20(1)); 
  • make an order relieving an arbitrator who resigns of any liability incurred by reason of his or her resignation, together with any order it sees fit with respect to entitlement to fees and expenses (Article 21(2));
  • issue a decision in respect of the jurisdiction of the tribunal (Article 23(3)); and
  • determine the amount of fees and expenses payable to the tribunal (Article 39(5)).

Can the local courts assist in choosing arbitrators?

Under Article 17(3)(c) of the DIFC Arbitration Law, the DIFC courts shall make any default appointment on behalf of a party or the party-nominated arbitrators, and shall appoint the entire tribunal where multiple parties have been unable to agree to arrange themselves into claimant and respondent groups.

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Under Article 32(a) of the DIFC Arbitration Law, where a claimant without sufficient cause fails to file a statement of claim, the tribunal is obliged to terminate the proceedings. Where a respondent fails to file a statement of defence, the tribunal must continue with the proceedings without treating the respondent’s failure as an admission of the claim (Article 32(b)). This means that the claimant must proceed to prove its case. Where any party fails to produce documents or attend a hearing, the tribunal may continue the proceedings and make an award on the basis of the evidence before it (Article 32(c)).  

Under Article 34 of the DIFC Arbitration Law, the tribunal or a party with the approval of the tribunal may request assistance from the DIFC court in taking evidence. The DIFC court may execute the request within its competence and according to its rules on taking evidence.

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

No express provisions in the DIFC Arbitration Law allow third parties to be joined to arbitration proceedings or be bound by arbitration awards. 

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

Under Article 29 of the DIFC Arbitration Law, where the parties have not agreed on the language of the arbitration proceedings, the tribunal shall determine the language or languages to be used.

Article 27(1) of the DIFC Arbitration Law provides that, absent the parties’ agreement, where any dispute is governed by DIFC law, the seat of the arbitration shall be the DIFC.

Gathering evidence
How is evidence obtained by the tribunal?

Article 24(1) of the DIFC Arbitration Law provides that the tribunal will have the power to order interim measures, including preserving evidence that may be relevant and material to the resolution of the dispute. 

What kinds of evidence are acceptable?

Documentary, witness and expert evidence are all the norm.  Whether documentary disclosure is extensive or limited and the process for factual witness and expert evidence is at the discretion of the tribunal, within the parameters set by any institutional arbitration rules agreed by the parties.

Confidentiality
Is confidentiality ensured?

Article 14 of the DIFC Arbitration Law provides that, unless otherwise agreed by the parties, all information relating to the arbitration proceedings shall be kept confidential, except where disclosure is required by an order of the DIFC court.

Can information in arbitral proceedings be disclosed in subsequent proceedings?

Article 14 of the DIFC Arbitration Law provides that, unless otherwise agreed by the parties, all information relating to the arbitration proceedings shall be kept confidential, except where disclosure is required by an order of the DIFC court. 

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

The DIFC Arbitration Law does not refer to any ethical codes for arbitrators or counsel.

In practice, counsel and arbitrators will be bound by the ethical codes of their professional bodies and the DIFC Code of Conduct.

Costs

Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?

Under Article 38(5) of the DIFC Arbitration Law, the tribunal’s award must fix the costs of the arbitration. These include the successful party’s reasonable legal costs and expenses, as well as the fees and expenses of the tribunal and of any arbitration institution or appointing authority.

Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?

Article 24 (1)(a) of the DIFC Arbitration Law authorises the tribunal to order any claiming or counterclaiming party to provide appropriate security, including security for legal or other costs of any other party, by way of deposit or bank guarantee or in any other manner or upon such terms as the tribunal considers appropriate.

In the DIFC courts, parties can make applications for security for costs pursuant to Part 25 of the Rules of the DIFC courts.

The award

Requirements
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

Under Article 43(1) of the DIFC Arbitration Law, a party may ask the DIFC court to issue an order recognising an arbitration award made in the DIFC. Article 43(2) provides that an order recognising an award will be issued in English and Arabic, unless the DIFC court determines otherwise. Either language version, in original and certified copy form, will constitute sufficient proof of recognition.

Article 38(2) of the DIFC Arbitration Law provides that the award shall state the reasons on which it is based, unless the parties have agreed otherwise or the award records a settlement between the parties in accordance with Article 37.  

Timeframe for delivery
Are there any time limits on delivery of the award?

The DIFC Arbitration Law does not specify a time limit for the issuing of the final award. The parties are free to agree on a time limit. 

Remedies
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The DIFC Arbitration Law imposes no limits on the remedies available to the parties. 

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

Article 24(1) of the DIFC Arbitration Law gives the tribunal clear and extensive powers to order interim measures. Article 24(1) largely reflects similar provisions found in the English Arbitration Act 1996. The tribunal will have the powers set out at Article 24(1), unless the parties have specifically agreed otherwise.

Under Article 24(3) of the DIFC Arbitration Law, the DIFC court may grant such interim orders in respect of arbitration proceedings as it may make in relation to proceedings in court and may issue interim measures pending constitution of the tribunal. 

Interest
Can interest be awarded?

In the DIFC, interest may be awarded on the principal claim at such rate as the tribunal thinks appropriate to the circumstances. 

At what rate?

Interest may be awarded on the principal claim at such rate as the tribunal thinks appropriate to the circumstances. 

Finality
Is the award final and binding?

Under Article 42(1) of the DIFC Arbitration Law, an arbitral award shall be recognised as binding within the DIFC, irrespective of the state or jurisdiction in which it was issued and provided that it does not trigger any of the grounds for refusal of recognition or enforcement by the DIFC court under Article 44.

What if there are any mistakes?

Article 40 of the DIFC Arbitration Law provides that tribunals may correct their awards. Under Article 40(1)(a) a party may, with notice to the other party, request that the tribunal correct any computational, clerical, typographical or other errors contained in the award. Article 40(1) provides that the tribunal shall make any amendments within 30 days of any request, provided that it considers such requests to be justified.

Pursuant to Article 40(3), a party may request that the tribunal make an additional award as to claims presented in the arbitral proceedings but omitted from the award within 30 days of receipt of the award. If the tribunal considers the request to be justified, it will make the additional award within 60 days.

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The DIFC Arbitration Law does not specifically allow or prohibit the parties from excluding their rights to recourse against the award. 

Appeal
What is the procedure for challenging awards?

In line with international practice, the awards of arbitrators cannot be appealed to the DIFC court. Under Article 41 of the DIFC Arbitration Law, however, awards may be challenged on jurisdiction and due process grounds. 

Article 41(3) of the DIFC Arbitration Law provides that unless the parties agree otherwise, an application to set aside an award must be made within three months of the award having been received by the party applying. Under Article 44(3), a party’s failure to apply to the DIFC court to set aside an award made in the DIFC will bar that same party from invoking Article 44(1)(a) in order to resist an application to enforce the award pursuant to Article 44.

Articles 41(2)(a)(i) to (iv) of the DIFC Arbitration Law mirror Articles 34(2)(a)(i) to (iv) of the UNCITRAL Model Law with respect to the setting aside of awards.

Article 41(2)(b)(ii) of the DIFC Arbitration Law mirrors Article 34(2)(b)(ii) of the UNCITRAL Model Law in that it provides that an award may also be set aside if it conflicts with the public policy of the state, specifically the United Arab Emirates. The previous DIFC Arbitration Law (the 2004 law) referred to the public policy of the DIFC rather than the United Arab Emirates. Article 41(2)(b)(ii) also provides that an award may be set aside if the DIFC court finds that the dispute is expressly referred to a different body or tribunal for resolution under this law or any mandatory provision of DIFC law.

On what grounds can parties appeal an award?

There is no mechanism for an appeal on the merits. A party may apply to set aside an award in accordance with Article 41 of the DIFC Arbitration Law. Articles 41(2) and (3) provide the grounds for setting aside an award which include where:

  • a party was incapacitated;
  • the arbitration agreement was invalid;
  • there was insufficient notice;
  • a party was unable to present its case;
  • the award is beyond the scope of the arbitration agreement; 
  • the composition of tribunal or the procedure was outside the scope of the parties’ agreement or the DIFC Arbitration Law;
  • the dispute was not arbitrable under the DIFC Arbitration Law;
  • the dispute was expressly referred to a different body or tribunal; or
  • enforcement would be contrary to public policy.

Enforcement
What steps can be taken to enforce the award if there is a failure to comply?

The enforcement regime in the DIFC is similar to that of many other jurisdictions with modern arbitration laws. The recognition and enforcement of awards is set out in Articles 42, 43 and 44 of the DIFC Arbitration Law. The grounds for refusing to recognise or enforce an award are set out in Article 44 and include where:

  • a party was incapacitated;
  • the arbitration agreement was invalid;
  • there was insufficient notice;
  • a party was unable to present its case;
  • the award is beyond the scope of the arbitration agreement;
  • the composition of the tribunal or the procedure was outside the parties’ agreement or the law of the state or jurisdiction where the arbitration took place;
  • the award is not yet binding on the parties or has been set aside or suspended by a court of the state in which the award was made;
  • the dispute was not arbitrable under DIFC law; or
  • enforcement would be contrary to public policy.

Can awards be enforced in local courts?

Yes. 

How enforceable is the award internationally?

Arbitral awards issued in the DIFC are generally enforceable internationally. As the DIFC is within the United Arab Emirates, an award made in the DIFC is a New York Convention award for the purposes of recognition and enforcement. 

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

The DIFC Arbitration Law contains no provisions on sovereign or state immunity. 

Are there any other bases on which an award may be challenged, and if so, by what?

The DIFC Arbitration Law provides no additional grounds under which an award may be challenged. 

How enforceable are foreign arbitral awards in your jurisdiction?

Foreign awards are enforceable subject to Article 44 of the DIFC Arbitration Law.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Under Article 44(1)(a)(v) of the DIFC Arbitration Law, the DIFC may refuse to enforce an award where the award has been set aside or suspended by a court of the state or jurisdiction in which, or under the law of which, that award was made.

Third-party funding

Rules and restrictions
Are there rules or restrictions on third-party funders?

The DIFC Arbitration Law contains no provisions on third-party funding. 

Class-action or group arbitration

Concept
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

The DIFC Arbitration Law contains no provisions on class-action arbitration or group arbitration. 

Hot topics

Emerging trends
Are there any hot topics or trends emerging in arbitration in your jurisdiction?

Restructuring of DIFC-LCIA Arbitration Centre

The DIFC-LCIA Arbitration Centre was re-launched on November 18 2015 following the issue of Dubai Law 7/2014, which amended DIFC’s founding Law 9/2004.

Pursuant to the new legislative structure, the DIFC Judicial Authority was replaced by the Dispute Resolution Authority. It is hoped that the Dispute Resolution Authority will provide a solid statutory basis for the DIFC-LCIA Arbitration Centre and also ensure appropriate independence from the DIFC courts. However, the supervision of arbitration proceedings will remain vested in the DIFC courts.

As part of the re-launch, the DIFC-LCIA has relocated away from the DIFC courts to the DIFC Gate Building, reinforcing its independence.

Enforcement of foreign and domestic awards
DIFC courts continue to approve the use of DIFC recognition proceedings for enforcement of both foreign awards and domestic arbitration awards issued in non-DIFC Dubai, even where the arbitration debtor has no assets within the DIFC. Important cases include the following:

Case XX, X1 and X2 v Y1 and Y2 – the claimants sought to enforce a London-based arbitration award for $26.5 million for unpaid amounts due under bareboat charters of 10 ocean vessels. The DIFC court rejected the debtors’ argument that recognition by the DIFC courts would violate UAE public policy because the debtors had no assets or presence in the DIFC.

Meydan Group v Banyan Tree Corporate (ARB 003/2013) – the arbitration creditors applied to the DIFC court to recognise and enforce an arbitration award issued by a tribunal constituted under the rules of arbitration of the Dubai International Arbitration Centre. The DIFC court rejected the debtors’ argument that recognition would be an abuse of process and breach of public policy.

A v B (ARB 002/2014) – the arbitration creditors applied to the DIFC court to recognise and enforce a $3.6 million arbitration award issued by a Dubai-seated tribunal. The DIFC court rejected the debtor’s argument that recognition would create the risk of inconsistent decisions between the DIFC and Dubai courts, as it had already brought suit in the Dubai courts to annul the arbitration award.

A v B (ARB 005/2014) – the arbitration creditor applied to the DIFC courts to recognise an International Chamber of Commerce award issued in Paris to resolve a dispute over the purchase of aircraft engines. The debtor was a commercial air cargo carrier incorporated in non-DIFC Dubai. Despite the lack of a significant connection to the DIFC, the DIFC court recognised the arbitration award, causing the debtor to file an application to set aside the order or, alternatively, to adjourn enforcement pending the outcome of a challenge to the award in France. The DIFC court denied the application after reviewing the circumstances of the case.