What do you mean by arbitration:

Arbitration process can be understood as an alternate dispute resolution process wherein the disputing parties voluntarily choose an arbitration forum for adjudication of their disputes. When the parties choose binding arbitration for the settlement of their dispute then the decision of the arbitrator is termed as final and can be then enforced through court and may be further appealed on limited grounds.

You can say that Arbitration is a popular method for dispute resolution in the United Arab Emirates. The main reasons that support the increasing reliance arbitration are the following:

  • Increasing number of reliable arbitration centres in the UAE has contributed to this. There are a many arbitration centers in the UAE , namely, Dubai International Arbitration Centre (DIAC); DIFC London Court of International Arbitration (DIFC-LCIA) Centre; Sharjah International Commercial Arbitration Centre (Tahkeem);Ras Al-Khaimah Centre for Reconciliation and Commercial Arbitration and the Emirates Maritime Arbitration Centre (EMAC).
  • The UAE also introduced Federal Law No. 6/2018 on Arbitration (Arbitration Law) with a special focus on enforcement of arbitral awards.
  • Arbitration allows for adjudication in English language or the language of choice of the parties and this adds to another important facet why arbitration is selected.
  • The confidential nature of arbitral proceeding is also an enticing factor.
  • Arbitral tribunals are often also empowered to grant preliminary relief, such as an order freezing assets and in addition might also allow for appointment of an “emergency arbitrator” to consider any application for interim relief.

International Arbitration :

Arbitration has been popularly used as the dispute resolution method for commercial matters including real estate matters. With the real estate boom in the UAE, there have been an increasing number of arbitration cases involving developers, contractors and investors. The Arbitration law will specially apply to any international commercial arbitration conducted abroad, if the parties have chosen this Law to govern such Arbitration (Article 2(2)).

The enforcement procedures for arbitral award are different for domestic arbitral awards and for foreign arbitral awards. The Cabinet Decision No. 57 of 2018 issued Executive Regulations of the Civil Procedures Code, which were especially intended to facilitate and expedite the process of ratification and enforcement of foreign arbitration awards. The executive regulations allow for the direct ratification of a foreign arbitral award submitted by way of a petition to the enforcement judge, instead of the previous process of filing a ratification case before the competent Court of First Instance. The execution judge is also required to issue its order on the petition within three days from the date of as submission of the execution application. Article 85 of the Executive Regulations, states that: “An enforcement order shall be applied for under a petition submitted by a concerned party to the Execution Judge who should issue his order within a maximum of 3 days from the date of filing of the petition.”

An enforcement action can still be challenged on few limited grounds, however it does not require the execution process to be stalled, unless the execution judge is convinced that an immediate enforcement will result in irreparable damage. Needles to say with the latest changes have led to positive development, with foreign arbitration awards being increasing enforced in the UAE and commercial arbitration being increasing relied upon.