The Emirate of Dubai established the Dubai International Financial Centre ('DIFC') as a free zone with its own civil and commercial laws and its own courts, led by Chief Justice Sir Anthony Evans who was previously a Lord Justice of Appeal in England. On Sunday 17th February, DIFC announced two major developments for international arbitration in the region.

First, DIFC released a draft Arbitration Law and commenced a one month consultation period on the law. The proposed law is based on the UNCITRAL Model Law on International Commercial Arbitration and seeks to provide a modern and effective framework in which the sophisticated disputes encountered in the DIFC can be resolved. The proposed changes to be enacted include:

  • broadening the scope of the DIFC's arbitration legislation so that parties with no connection to the DIFC may utilise the DIFC as an arbitral forum;
  • limiting the circumstances of Court intervention in arbitral proceedings, to show that whilst there will not be unnecessary judicial intervention, the parties can derive comfort from the level of assistance available if necessary;
  • providing express authority for the parties to arbitral proceedings to request interim measures of relief from the Courts;
  • specifying the types of interim measures available from the Arbitral Tribunal;
  • allowing the DIFC Court to determine the composition of the Arbitral Tribunal where the parties have not chosen any particular arbitral institution to oversee the proceedings;
  • specifying that the arbitral proceedings remain confidential unless the parties agree otherwise; and
  • providing that the arbitral tribunal, its employees and agents will not have any liability for the performance of their duties, save where such liability is deliberately caused.

Second, a joint venture between DIFC and the LCIA was inaugurated. The joint venture establishes a new centre for the administration of international arbitration and mediation and complements the independent legal and regulatory framework of DIFC. The DIFC-LCIA association benefits from the reputation of the LCIA as one of the longest-established international institutions for commercial dispute resolution in the world. The DIFC-LCIA Arbitration Centre ("the Centre") is intended to promote the effective resolution of international business disputes through arbitration and mediation world-wide.

The Centre's Arbitration and Mediation rules are a close adaptation of the existing LCIA Rules. The rules are universally applicable and compatible with both civil and common law systems, offering a comprehensive and modern set of rules and procedures. The Centre also has access to the LCIA's database of arbitrators, enabling it to appoint tribunals of the highest calibre.

As His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai noted during the inauguration, these changes are part of a strategy to position Dubai as an international arbitration jurisdiction in one of the world's fastest growing international financial centres. Economic activity in the Middle East is at unprecedented levels and investors and contractors from outside the region are increasingly active here. Developments in arbitration in the DIFC, combined with the already strong reputation of the Dubai International Arbitration Centre, mean that Dubai is becoming an ever more attractive venue for the settlement of regional disputes.