Introduction

The Oxford English Dictionary defines 'relaunch' as to "launch (something, especially a product) again or in a different form".

On November 18 2015, in its own words, the Dubai International Financial Centre (DIFC)-London Court of International Arbitration (LCIA) announced a relaunch of the centre. Through the relaunch, the DIFC-LCIA has introduced a new and improved version of its product: the arbitration centre will now be headed by a registrar located in the DIFC and, in due course, will operate under revised DIFC-specific rules, which will be a modified version of the 2014 LCIA Rules.

As of February 14 2016 Mohammed El Ghatit, formerly of Hogan Lovells and a well-known and respected practitioner based in Dubai for over a decade, has assumed his role as the new DIFC-LCIA registrar.

This update explains why the changes were necessary, what improvements are now being implemented and the potential impact on arbitration in Dubai and the wider region.

Overview

The emirate of Dubai operates under two parallel legal systems:

  • 'onshore Dubai', which has a civil law system based on a civil code (largely modelled on the Egyptian Civil Code) and an arbitration framework limited to a handful of articles in the Civil Procedures Code 1992; and
  • the 'offshore' financial free zone in the DIFC, which operates under its own bespoke legal and regulatory framework and contains English language courts modelled on the common law, together with a modern arbitration law based on the United Nations Commission on International Trade Law Model Law.(1)

The relaunch of the DIFC-LCIA Centre follows from a wider restructuring originating from Dubai Law 7/2014, amending certain provisions of Dubai Law 9/2004 that established the DIFC Arbitration Institute and the DIFC Dispute Resolution Authority. Both organisations operate parallel to and independently of the DIFC courts. The restructuring was intended to address concerns expressed by certain practitioners in Dubai regarding the jurisdictional reach and constitutionality of the DIFC-LCIA Centre, and therefore the enforceability of arbitral awards issued under the DIFC-LCIA Rules.

Key changes

Some of the key changes are as follows:

  • New statutory basis – pursuant to Dubai Law 7/2014, the DIFC-LCIA Centre now operates under the DIFC Dispute Resolution Authority and the DIFC Arbitration Institute.
  • New registrar/cases to be administered locally – El Ghatit has recently taken up his role as the new registrar. Further, case management of the 30 open arbitrations being handled by the LCIA in London are being migrated to the DIFC-LCIA in Dubai.
  • New rules – the DIFC-LCIA Rules will be updated shortly to reflect the amendments contained in the 2014 LCIA Rules, including:
    • provisions dealing with the conduct of party-appointed counsel;
    • the expedited formation of arbitral tribunals; and
    • emergency arbitrator procedures.

The new rules are also expected to contain certain Dubai-specific provisions.

  • New venue – the DIFC-LCIA has moved to the DIFC Gate Building and is now geographically separate from the DIFC courts.
  • Management – the DIFC Arbitration Institute is governed by five trustees:
    • Essam Al Tamimi (Al Tamimi & Co);
    • Reza Mohtashami (Freshfields Bruckhaus Deringer LLP);
    • Alec Emmerson (Clyde & Co);
    • William Rowley QC (chair of the LCIA Board); and
    • Jackie van Haersolte-van Hof (director general of the LCIA).

Comment

Despite its obvious benefits, it is reported that the DIFC-LCIA Centre has only 30 cases on its docket (compared to over 300 in London). This number is widely expected to grow, as legal professionals and end users can now opt for arbitration seated in the DIFC under the DIFC-LCIA Rules free of the prior concerns over the enforceability of awards.

The LCIA has commented that:

"With the support of the Dubai government, the ‎restructured DIFC-LCIA is expected to consolidate and enhance Dubai's role as the major centre for the resolution of commercial disputes for those doing business in and with the Gulf states."

This sentiment is supported by the fact that the DIFC is subject to UAE international treaties. As such, a DIFC award may be recognised and enforced as an award from a contracting state under the 1958 New York Convention. Moreover, in contrast with the courts in onshore Dubai, the DIFC courts have shown themselves to support arbitration in the DIFC, recognising their role as a support function and the importance of limited interference.

Perhaps most importantly, other Dubai and regional institutions are once again faced with competition from a credible arbitral institution, supported by an experienced registrar and operating in a seat benefiting from a modern arbitration law and supportive courts. Such competition can only be beneficial for arbitration in the Middle East, as it provides additional impetus to other arbitration institutions and policymakers to "re-launch" their own dispute resolution products.

For further information on this topic please contact Sami Tannous or Arielle Tatur at Freshfields Bruckhaus Deringer LLP by telephone (+971 4 5099 100) or email (sami.tannous@freshfields.com or arielle.tatur@freshfields.com). The Freshfields Bruckhaus Deringer LLP website can be accessed at www.freshfields.com.

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