On 1 September 2008, the Ruler of the Emirate of Dubai, HH Sheikh Mohammed Bin Rashid Al Maktoum, enacted a new Arbitration Law of the Dubai International Financial Centre ("DIFC").

The new law, which is to be known as DIFC Law No 1 of 2008, replaces and repeals the DIFC's previous arbitration law of 2004. This is welcome as the previous law restricted the availability of DIFC as an arbitral forum to disputes involving DIFC registered entities, or to contracts with a connection to the DIFC. This restriction has been removed by Part 2, Article 7 of the new law, and DIFC is now available as an arbitration forum to anyone who chooses to adopt it.

This is an exciting development as the DIFC offers features which are likely to make it a very attractive arbitration venue. DIFC is a legal island within the UAE, it offers a common law jurisdiction with its own laws (largely based on English law) and its own independent court system with judges drawn from the common law world. Those judges can be expected to be supportive of the arbitral process, and inappropriate judicial interference in arbitrations is unlikely. DIFC also teamed up with the LCIA earlier this year launching an arbitration centre with rules based closely on the well established LCIA rules, and with access to LCIA’s extensive database of arbitrators.

As His Excellency Dr Omar Bin Sulaiman, Governor of DIFC said: "With the introduction of the Arbitration Law, DIFC now offers a legislative platform for comprehensive dispute resolution… We are confident that the new Arbitration Law, in conjunction with the newly formed DIFC-LCIA Arbitration Centre, will ensure that local, regional and global companies have an expeditious, cost effective alternative to expensive, laborious dispute settlements ..."

The new arbitration law, which is based closely on the UNCITRAL Model Law with only minor modifications, is likely to bolster DIFC's standing as a forum for international arbitration, and provide an important option for those wishing to arbitrate within the Middle East.