Arbitration

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement must be in writing. The agreement may be contained in a document that is signed by the parties or mentioned in an exchange of written communications (electronic communications, such as in email, are also permissible) (Arbitration Law article 7).

The arbitration agreement must be concluded by a natural person or by a representative of a legal entity authorised to agree to the arbitration agreement (Arbitration Law article 4(1)).

The arbitration agreement is separable and independent from the other terms of the contract (Arbitration Law article 6). This concept did not previously exist under UAE law.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

The new Arbitration Law expressly repeals CPL articles 203 to 218. The Arbitration Law is vastly more in line with international standards. The Arbitration Law does not provide the same requirements as the CPL.

Award

When and in what form must the award be delivered?

Arbitration Law article 41 provides for the form and contents of the arbitral award. In particular, the award must be in writing (article 41(1)); must be signed by the majority of the tribunal or the chairperson and any dissenting opinions must be attached to the award (article 41(2)); unless otherwise agreed to, the award must be reasoned (article 41(4)); the award must include basic information of the parties, the factual matrix of the dispute and evidentiary documents and the arbitration agreement forming the basis of the tribunal’s formation (article 41(5)); the award is considered issued in the seat of the arbitration irrespective if signed outside that seat and irrespective if the arbitrators signed the award in different places and through different means (article 41(6)); the date of the award is considered to be the date when a sole arbitrator signs the award or at the time of the last signature of an arbitrator (article 41(7)).

Appeal

On what grounds can an award be appealed to the court?

An award may only be set aside pursuant to Arbitration Law articles 53 and 54.

Article 53 provides for specific and narrow grounds for setting aside an award that include lack of capacity of a party that entered into the arbitration agreement, lack of authorisation to act on the matter, lack of proper notice, failure of the tribunal to apply the governing law of the arbitration agreement. Appeals to a UAE court to set aside the award must be made within 30 days of the award. UAE court decisions may then be appealed.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Recognition and enforcement of awards has now been simplified with the new Arbitration Law that applies to domestic and foreign awards. Arbitration Law article 55 permits a person or entity to apply for the recognition of an award and issue enforcement by a UAE court. An original or certified copy of the award is required along with the arbitration agreement, Arabic translation and transcript. Importantly, Arbitration Law article 55(2) requires a UAE court to issue an order for recognition and enforcement within 60 days from the date of filing.

Awards delivered in the DIFC may be enforced in Dubai (and vice versa) pursuant to DIFC Law No. 12 of 2004, as amended (Judicial Authority Law). If the claimants succeed in the merits of their enforcement application before the DIFC courts, the claimants should be able to take a DIFC court judgment for enforcement before the Dubai CE. The Judicial Authority Law provides that the Dubai courts do not have discretion or jurisdiction to review the merits of a DIFC court judgment. An enforcement order obtained in Dubai should theoretically be enforceable throughout the UAE by reference to article 11 of the UAE Federal Law No. 11 of 1973 on Judicial Relationships Amongst Emirates, which provides that: ‘[A]ny order deciding civil or commercial rights or damages, concerning penal affairs or personal affairs, issued by a judicial body in one of the emirates member of the federation, shall, according to the rules of this law be executable in any other emirate member of the federation.’

The UAE became a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NY Convention) in August 2006 and it entered into force on 19 November 2006, which was then ratified by UAE Federal Decree No. 43 of 2006. The Federal Decree approving the NY Convention entered into force on 19 November 2006. Broadly speaking, the intention of the NY Convention is to ensure that an arbitral award obtained in one NY Convention member state can be enforced in any other NY Convention member state as easily as if it were a domestic arbitration award. In theory, the NY Convention is a highly effective treaty that provides a process for the reciprocal enforcement of arbitral awards between the now 159 signatory states worldwide. The NY Convention provides in article III that ‘each Contracting State shall recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon’, provided that such awards satisfy the conditions as set forth in the NY Convention.