Alessandro Tricoli

Approximately 10 years after the establishment of the DIFC-LCIA Arbitration Centre (“DIFC-LCIA”), the Emirates Maritime Arbitration Centre (“EMAC”) was officially launched. Like arbitrations conducted under the auspices of the London Maritime Arbitrators Association and the Singapore Chamber of Maritime Arbitration, the establishment of the EMAC is symbolic of the UAE’s continued endeavor to keep pace with international best practices.

This article aims to compare the EMAC with the DIFC-LCIA by considering their mechanisms, processes, and costs.

Arbitration Costs

The EMAC and DIFC-LCIA adopt a largely hourly rate basis, utilizing the ad valorem basis only for registration and administrative fees. Pertinent arbitration costs are as follows, and detailed costs may be retrieved from their respective websites.

Registration Fee Between 1,000 and 10,000 depending on dispute amount 10,000
Administrative Fee Between 4,000 and 60,000 depending on dispute amount Hourly basis between 1,000/hr and 1,500/hr
Arbitrator’s Fee Hourly basis in consultation with parties, EMAC and arbitrators To be advised by DIFC-LCIA Registrar when Tribunal is constituted; generally does not exceed 2,500/hr for hourly basis
Emergency Arbitrator’s Fee Hourly basis in consultation with parties, EMAC and arbitrators 120,000 excluding 50,000 for Application Fee
Unit of time Not stipulated 15 minutes in all cases

As arbitration suits differ from one another, it is difficult to accurately determine which centre is more cost-efficient. However, EMAC might give parties greater flexibility in managing costs since costs are determined in consultation. DIFC-LCIA prefers having an oversight of the costs presumably to ensure that less sophisticated parties are not unreasonably charged.

While the DIFC-LCIA rules appear to be much more prescriptive than the EMAC rules in how the tribunal should decide on the legal and arbitration costs, rules of both centres are in substance similar because the prevailing principle of their rules is to reflect the parties’ success and failure pursuant to the award and their conduct in the arbitration.

Time Limit for Issuing an Award

The two centres adopt contrasting approaches here. The final award in EMAC arbitrations must be issued within 90 days from the date that hearings are deemed closed, while such deadline does not exist for DIFC-LCIA arbitrations. The approach taken by EMAC gives parties and their lawyers some clarity as to the timeline while the DIFC-LCIA approach allows arbitrators to reach a just decision based on their own timeline. Parties should still note that the arbitrators in EMAC arbitrations may reasonably request from the Executive Committee of the EMAC to extend the 90-day time limit, more than once.

Language of the Arbitration

Both EMAC and DIFC-LCIA arbitrations have different default languages – English for EMAC and the language of the arbitration agreement for DIFC-LCIA. In this regard, parties keen on DIFC-LCIA arbitrations should be prudent when drafting the dispute resolution clause/arbitration agreement if the language of the arbitration agreement and the language of the arbitration are envisaged to be different.

It is noteworthy that notices and applications for the attention of the EMAC Centre may be done in English or Arabic. Hence parties may find themselves dealing with documents in 2 languages from the commencement of arbitration till the enforcement of the award(s). This is contrasted with DIFC-LCIA rules which do not anticipate the use of languages other than English for notices and applications to the LCIA Court. Further, a DIFC-LCIA arbitral tribunal or the DIFC-LCIA Registrar may order for a party to translate any document (or any part thereof) that it submits which is not in the language of the arbitration.

Challenging an Arbitrator

While the rules of EMAC and DIFC-LCIA allow parties to challenge the fitness of an arbitrator to act, the EMAC goes a step further by expressly placing an ongoing obligation on the arbitrator to disclose any circumstances likely to create justifiable doubt on his impartiality. Still, the DIFC-LCIA is no less robust because the LCIA Court may unilaterally revoke any arbitrator’s appointment due to similar reasons and more.

Similarities Between EMAC and DIFC-LCIA

Notwithstanding the above contrasts, both arbitration centres apply rules which are similarly worded.

Time Sensitivity

Both EMAC and DIFC-LCIA recognize the need for catering to parties from time-sensitive industries. In this regard, both offer electronic service of documents, which parties from the maritime industry would appreciate. Additionally, the rules of both centres allow the emergency arbitrator to “conduct the emergency proceedings in any manner” as “appropriate in the circumstances”. This reflects the pragmatic approach that both centres have taken in the drafting of their rules.

Seat of Arbitration

The Dubai International Financial Centre (“DIFC”) is the default seat of arbitration for EMAC and DIFC-LCIA arbitrations. This assures parties that the supervisory court (the DIFC Courts) conducts its proceedings in English and relies on the predictable common-law system.

Further, it is reportedly easier to enforce in Dubai, a DIFC-seat award than an onshore Dubai-seat award. Reason being enforcement of the DIFC-seat award could be done by the DIFC Courts which adopts the predictable common-law system while an onshore Dubai-seat award must be enforced through the Dubai Courts.

Place of Hearing

Both EMAC and DIFC-LCIA rules provide that places of hearing may be different from the seat of the arbitration. Such provision removes any possible confusion that parties may have or dispute regarding the supervisory court, paving the way for all relevant persons to convene a meeting or hearing at a convenient location.

Last Observations

It is immediately apparent that the EMAC rules favor more flexibility and autonomy for parties as compared to the DIFC-LCIA rules. As this approach extends to the fixing of arbitration costs as well, it may well be the case that EMAC arbitrations would cost less than DIFC-LCIA ones. Having said that, if parties prefer a tried and tested arbitration centre that adopts a more prescriptive approach, the DIFC-LCIA is the one to go for.

While differences are evident between the two centres, both possess many similarities that parties would appreciate as well. Both centres are user-centric and aim to assist in the delivery of fair and just outcomes. The DIFC-LCIA has proven to be a success, with a surging caseload year-on-year. With the establishment of the EMAC, parties may now commence their claims at another excellent arbitration centre that offers a flexible approach backed by the strong supervisory DIFC Courts.