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Legal framework

National arbitration laws

What legislation applies to arbitration in your jurisdiction?

The United Arab Emirates recently adopted the Federal Arbitration Law (Federal Law 6/2018) which will govern UAE-seated arbitrations. The law was published in the Official Gazette on 15 May 2018 and came into force one month from its publication date.

The Federal Arbitration Law repeals the old arbitration law, which was set out in Articles 203 to 218 of the UAE Civil Procedure Code (Federal Law 11/1992). In accordance with Article 59 of the Federal Arbitration Law, any arbitration proceedings that were conducted in accordance with the provisions of the previous law will remain valid.

As set out in Article 2, the Federal Arbitration Law applies to:

  • arbitrations seated in the United Arab Emirates, unless the parties have agreed to the application of another law;
  • arbitrations seated outside the United Arab Emirates, but where the parties have agreed to subject the proceedings to the Federal Arbitration Law; and
  • arbitrations arising out of a legal, contractual or non-contractual relationship governed by UAE law.  

The Federal Arbitration Law does not apply to the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Markets (ADGM) which are offshore financial free zones within the United Arab Emirates that are exempt from the application of UAE civil and commercial federal laws. The DIFC and ADGM have independent laws governing arbitrations seated in those jurisdictions. The following answers only address onshore UAE arbitration laws.

Mandatory laws

Are there any mandatory laws?

The Federal Arbitration Law is mandatory to the extent that it applies to arbitration proceedings where, for example, the arbitration is seated in the United Arab Emirates or the arbitration proceedings are otherwise subject to the Federal Arbitration Law by the parties’ agreement (Article 2).

Where the Federal Arbitration Law has not been complied with, an award may be challenged. Article 53(1)(g) states that an award can be challenged if the arbitration procedures were null in a way which affects the arbitration.

The court (as defined in Article 1) may also annul or refuse to recognise or enforce an arbitral award if the subject matter of the dispute cannot be settled by arbitration (Article 53(2)(a) and Article 4(2)), or if the award contravenes public order or UAE morality (Articles 53(2)(b)).

Matters that cannot be settled by arbitration include:

  • real estate disputes relating to the registration of properties in the real estate register;
  • disputes concerning mandatory provisions of other laws, such as commercial agency agreements registered with the Ministry of Economy; and
  • disputes related to public policy matters, including marriage and inheritance.

New York Convention

Is your country a signatory to the New York Convention?  If so, what is the date of entry into force?

Yes. The United Arab Emirates acceded to the New York Convention by Federal Decree 43/2006 and it entered into force on 19 November 2006.

Are there any reservations to the general obligations of the convention?

The United Arab Emirates did not express any reservations to the New York Convention.

Treaties and conventions

What other treaties and conventions in relation to arbitration is your jurisdiction party to?

The United Arab Emirates is party to the following conventions which relate to arbitration:

  • the Washington Convention on the Settlement of the Investment Disputes between States and Nationals of Other States (1965);
  • the Riyadh Convention on Judicial Cooperation between States of the Arab League (1983);
  • the Hague Convention for the Pacific Settlement of International Disputes (1907); and
  • the Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notification (1996).

It has also entered into treaties which govern the reciprocal enforcement of judgments with several countries, including:

  • Tunisia (1975);
  • France (1992);
  • India (2000);
  • Egypt (2000);
  • China (2004);
  • Morocco (2006);
  • Tajikistan (2007);
  • Afghanistan (2009); and
  • Kazakhstan (2009).

The United Arab Emirates has also entered into 63 bilateral investment treaties, 37 of which are in force: Algeria, Austria, Azerbaijan, Belarus, Belgium–Luxembourg Economic Union, China, Czech Republic, Egypt, Finland, France, Germany, Greece, India, Italy, Jordan, Korea, Lebanon, Malaysia, Montenegro, Morocco, Pakistan, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Sweden, Switzerland, Syria, Tunisia, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan and Yemen.

UNCITRAL

Has your jurisdiction adopted the UNCITRAL Model Law?

The Federal Arbitration Law is based on the UNCITRAL Model Law, but with modifications. For example, the time limits for challenging an award are shorter in the Federal Arbitration Law (30 days) than in the UNCITRAL Model Law (three months).

Reform

Are there any impending plans to reform the arbitration laws in your jurisdiction?

The United Arab Emirates recently adopted the Federal Arbitration Law and repealed the previous provisions of the Civil Procedure Code governing arbitration. It is therefore not expected that there will be further reforms in the near future.

However, provisions of other laws impact on arbitrations in the region. For example, in 2016 amendments were made to Article 257 of the Penal Code, Federal Law 3/1987, which provides that arbitrators may be imprisoned if they contravene their duty of neutrality and integrity. Article 257 of the Penal Code is understood to be in the process of amendment.

Arbitration agreements

Validity

What are the validity requirements for an arbitration agreement?

Article 4(1) of the Federal Arbitration Law provides that the arbitration agreement shall only be entered into by a natural person who is authorised to conclude the agreement on arbitration.

Article 4(2) of the Federal Arbitration Law provides that an arbitration agreement cannot be made in relation to matters which cannot be settled by arbitration.

Article 7(1) requires that any arbitration agreement must be made in writing. Under Article 7(2), an arbitration agreement will be deemed to have been made in writing if:

  • an arbitration agreement is included in a document signed by the parties or contained in their written communications;
  • the agreement between the parties refers to the provisions of a standard contract or any other document which incorporates an arbitration agreement;
  • the parties agree to refer their dispute to arbitration during the hearing of the case before the court; and
  • a party, in its written memoranda submitted to the court, requests the dispute to be referred to arbitration and the other party does not object.

Enforcement of agreements

How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

Article 8(1) of the Federal Arbitration Law states that a dispute which is subject to an arbitration agreement will be inadmissible before the court where the defendant raises an objection based on the arbitration agreement before submitting its first defence. However, if the arbitration agreement is found to be null, the court will hear the claim.

The courts have historically given full effect to valid arbitration agreements and it is expected that they will continue to do so under the Federal Arbitration Law.

Consolidation

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

The Federal Arbitration Law contains no provisions on the consolidation of separate arbitral proceedings under one or more contracts. Consolidation of separate arbitrations would therefore likely require the parties’ agreement subject to any applicable institutional rules.

Choice of law

How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Article 37(1) of the Federal Arbitration Law states that the arbitral tribunal shall apply the law agreed by the parties. Article 37(2) further states that the parties may agree to their legal relationship being governed by the provisions of a standard form contract or an international contract. The chosen law must not violate public order and morals.

Where the parties have not agreed on the applicable law, the arbitral tribunal is empowered to  use the law which applies to the subject matter of the dispute, pursuant to Article 38(1). In determining the applicable law, the arbitral tribunal must consider the terms and conditions of the contract, the subject matter of the dispute and any customary practices in transactions of a similar nature (Article 38(2)).

Separability

Are there any provisions on the separability of arbitration agreements?

Article 6(1) of the Federal Arbitration Law states that an arbitration agreement shall be an independent and severable clause from the rest of the contract. The invalidity, expiry or termination of the contract shall not affect the arbitration clause.

Article 6(2) states that a pleading of invalidity, expiry or termination of the contract shall not result in the arbitration procedures automatically terminating. The arbitral tribunal is empowered to determine the validity of the underlying contract.

Multiparty agreements

Are multiparty agreements recognised?

The Federal Arbitration Law does not provide specific provisions relating to multiparty arbitrations. However, Article 22 of the Federal Arbitration Law states that the arbitral tribunal may allow the joinder or intervention of a third party to the arbitration, provided that they are a party to the arbitration agreement.

Arbitral tribunal

Criteria for arbitrators

Are there any restrictions?

Article 10(3) of the Federal Arbitration Law states that the arbitrator is not required to be chosen from a certain gender or nationality, unless the parties agree or the law states otherwise.

Article 10(1) states that the following cannot be an arbitrator:

  • a minor;
  • a person deprived of civil rights due to a criminal penalty; or
  • a person who is bankrupt.

Article 10(2) further states that the arbitrator cannot be a member in the board of trustees or the administrative body of the arbitration institution concerned with the administration of the arbitration claim.

Contractual stipulations

What can be stipulated about the tribunal in the agreement?

Article 11(1) of the Federal Arbitration Law states that the parties may agree on the procedures, time and manner for the appointment of the arbitral tribunal. 

Default requirements

Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?

Under Article 9(1) of the Federal Arbitration Law, the arbitral tribunal shall consist of one arbitrator or more, as per the agreement of the parties. If the agreement does not detail this, the number shall be three (unless the competent authority decides otherwise).

Under Article 9(2), if there is more than one arbitrator, there must be an odd number, otherwise the arbitration agreement is invalid.

Challenging the appointment of an arbitrator

Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

Article 11(2) of the Federal Arbitration Law states that, where the parties failed to agree on the appointment of the arbitrator and the competent authority has appointed the arbitrator, the decision of the competent authority may not be challenged subject to Article 14.

Article 14(1) of the Federal Arbitration Law states that an arbitrator can only be disqualified if there are grounds to doubt the arbitrator’s impartiality or independence, or where it is proven that the arbitrator has not fulfilled the obligations under the arbitration agreement or the Federal Arbitration Law.

Under Article 15(2) of the Federal Arbitration Law, an application to disqualify an arbitrator must be made within 15 days from the date on which the applicant was informed of the appointment or the date on which the grounds for disqualification became known.

Jurisdictional objections

How should an objection to jurisdiction be raised?

The principle of competence-competence is recognised under the Federal Arbitration Law. Article 19(1) states that the arbitral tribunal must decide any claim regarding its jurisdiction to hear the dispute.

If the arbitral tribunal does have jurisdiction and either party objects, under Article 19(2) a party may request that the court determine whether the arbitral tribunal has jurisdiction, provided an application is brought within 15 days of the arbitral tribunal’s decision on jurisdiction.

Article 19(2) further states that the court must decide on the objection within 30 days of receiving such request. The court’s decision will be final. 

Replacement of an arbitrator

Why and how can an arbitrator be replaced?

Article 17(1) of the Federal Arbitration Law states that an arbitrator may be replaced, for example, if the arbitrator is disqualified or leaves their role. An alternative arbitrator shall be appointed in the same way as the appointment of the disqualified arbitrator. 

Powers and obligations

What powers and obligations do arbitrators have?

The powers of the arbitrators include:

  • granting temporary or preservative measures as it sees fit, such as orders for the preservation of evidence that may be essential in resolving disputes (Article 21);
  • defining the procedures applicable to the arbitration where it has not been agreed by the parties, provided that such procedures do not conflict with the general principles of litigation and the provisions of any international treaties to which the United Arab Emirates is a party (Article 23(2)); and
  • issuing interim or partial awards in relation to a specific element of the dispute (Article 39).

The obligations of the arbitrators include:

  • treating the parties equally, giving them equal opportunity to present their case (Article 26); and
  • issuing an award that is in writing (Article 41(1-5)), issued by the majority, signed, reasoned and that includes the following details:
    • the details of both parties and the arbitrators;
    • the arbitration agreement;
    • a summary of the requests of the litigants;
    • a summary of the parties’ statements and documents;
    • the verdict for the award and its grounds; and
    • the date and place of its issuance.

Liability of arbitrators

Are arbitrators immune from liability?

The Federal Arbitration Law contains no provisions stating that arbitrators are immune from liability.

Communicating with the tribunal

How do the parties communicate with the tribunal?

The Federal Arbitration Law contains no provisions on how the parties should communicate with the arbitral tribunal. However, Article 26 sets out general provisions relating to correspondence and notices. 

Reaching decisions

Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

The Federal Arbitration Law provides no requirement of unanimous agreement of the arbitral tribunal.

Article 41(2) states that the arbitration award shall be issued based on the majority opinion. Where there is no majority, the chair of the arbitral tribunal shall issue the award unless otherwise agreed by the parties.  

Arbitrability

Are there any disputes incapable of being referred to arbitration?

Yes. Under Article 4(2) of the Federal Arbitration Law, no arbitration agreement shall be made for matters which cannot be settled by arbitration.

In practice, there are certain disputes that cannot be referred for arbitration, including:

  • real estate disputes relating to the registration of properties in the real estate register;
  • disputes concerning mandatory provisions of other laws, such as those regarding commercial agency agreements registered with the Ministry of Economy; and
  • disputes related to public policy matters, which include:
    • criminal matters;
    • matters affecting public order;
    • personal status issues such as marriage and divorce;
    • matters regarding acquiring a nationality; and
    • matters regarding rights of minors.

Can the arbitrability of a dispute be challenged?

Yes. Under Article 19(1) of the Federal Arbitration Law, the arbitral tribunal shall decide any claim relating to the arbitration agreement, including the validity or scope of the subject matter of the dispute. The decision of the arbitral tribunal can be challenged within 15 days from the date it is issued by filing an application with the court (Article 19(2)).

Where an award is issued in relation to a dispute which cannot be settled by arbitration, the court may annul the award under Article 53(2)(a). 

Jurisdiction and competence-competence

Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

Yes, please see “How should an objection to jurisdiction be raised?” above.  

Arbitral proceedings

Starting an arbitration proceeding

What is needed to commence arbitration?

Article 27(1) of the Federal Arbitration Law states that the arbitration proceedings will commence on the day that follows the constitution of the arbitral tribunal, unless the parties agree otherwise.

Article 27(2) states that the notification of the request for arbitration will be deemed as an act of initiating a lawsuit for the purposes of imposing a precautionary attachment.

Limitation periods

Are there any limitation periods for the commencement of arbitration?

The Federal Arbitration Law contains no provisions on limitation periods for the commencement of arbitration.

If UAE law applies to the parties’ underlying agreement, arbitration proceedings commenced after the applicable limitation period will be time-barred. Under the UAE Civil Code, Federal Law 5/1985, the general limitation period for claims arising under contract is 15 years (Article 473). However, there are exceptions to this general rule – for example, physicians, pharmacists, lawyers, engineers, experts, professors, teachers and brokers have five years to claim any outstanding fees (Article 475).

Procedural rules

Are there any procedural rules that arbitrators must follow?

Under Article 23(1) of the Federal Arbitration Law, parties are free to decide on the procedural rules for the arbitration. In the absence of any agreement by the parties, Article 23(2) states that the arbitral tribunal may decide on the procedures, provided that such procedures do not conflict with the general principles of litigation and the provisions of any international treaties to which the United Arab Emirates is a party (Article 23).

Dissenting arbitrators

Are dissenting opinions permitted under the law of your jurisdiction?

Yes. Under Article 41(2) of the Federal Arbitration Law, dissenting opinions are required to be in writing and attached to the majority decision.

Judicial assistance

Can local courts intervene in proceedings?

Yes. The local courts can intervene in the proceedings in limited circumstances, such as:

  • Article 11 – the court may assist in the process of appointing arbitrators;
  • Article 16 – the parties can request that the court terminate an arbitrator’s appointment where the arbitrator is unable or ceases to perform their mandate;
  • Article 18 – the court may, on the request of any party or the arbitral tribunal, issue an order for precautionary or temporary measures;
  • Article 19(2) – the court may decide the jurisdiction of the arbitral tribunal if the tribunal has dismissed the objection to jurisdiction;
  • Article 21(4) – where the arbitral tribunal has issued an order for a temporary measure (eg, the preservation of evidence or assets) a request can be made to the court for an order to execute the temporary measure;
  • Article 36(1) – the arbitral tribunal may request the assistance of the court to compel a witness to provide oral testimony or to submit written evidence; and
  • Article 47 – the parties may file a request with the court to oblige the arbitral tribunal to deliver the award.

Can the local courts assist in choosing arbitrators?

With respect to sole arbitrators, either party may apply to the ‘competent authority’ (ie, the body authorised to administer the arbitration or the court) to assist with the appointment where the parties have failed to agree within 15 days after receiving a written request for the appointment of the arbitrator (Article 11(2)).

In the case of an arbitral panel, if either party has failed to appoint their nominated arbitrator within 15 days of receiving the request, or where the parties’ nominated arbitrators have failed to appoint the third arbitrator within 15 days from the date of their respective appointments, the competent authority can make the appointment (Article 11(3)).

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?  Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Article 32(3) of the Federal Arbitration Law states that if a party does not attend a hearing or fails to file the required documents without justification, the arbitral tribunal may proceed with the arbitration and can issue an award in the dispute based on the evidence available.

Under Article 36, the arbitral tribunal may seek the assistance of the court to obtain evidence. The court may issue an order to compel a witness to provide oral testimony or submit written evidence.

Third parties

In what instances can third parties be bound by an arbitration agreement or award?

Article 22 of the Federal Arbitration Law states that the arbitral tribunal may allow the joinder or intervention of a third party to the arbitration provided such party is a party to the arbitration agreement.

Default language and seat

Unless agreed by the parties, what is the default language and location for arbitrations?

The default language for the arbitration is Arabic, unless the arbitration parties agree otherwise (Article 29(1)). 

There is no default venue for the arbitration. Article 28(1) of the Federal Arbitration Law states that where the parties have not agreed on venue, the arbitral tribunal may select the venue taking into consideration the circumstances of the dispute and the suitability of the venue to the parties.

Gathering evidence

How is evidence obtained by the tribunal?

Article 31 of the Federal Arbitration Law states that parties may attach a copy of any necessary documents to their pleadings.

Under Article 36, the arbitral tribunal may seek the assistance of the court to obtain evidence. The court may issue an order to compel a witness to provide oral testimony or to submit written evidence.

What kinds of evidence are acceptable?

The Federal Arbitration Law refers to documentary evidence (Article 31), fact witness evidence (Article 33) and party-appointed and tribunal-appointed expert evidence (Articles 33 and 34).

Article 33 provides that the parties may agree on the procedure for taking evidence. Absent the agreement of the parties, the arbitral tribunal may decide on these matters (Article 33(2) and (7)).  The arbitral tribunal also has the power to determine the rules of evidence, including in relation to the admissibility and weight of evidence (Article 33(8)).

Confidentiality

Is confidentiality ensured?

Article 33(1) of the Federal Arbitration Law states that the arbitration hearings are deemed confidential unless otherwise agreed by the parties. Article 48 states that the award is confidential and cannot be published without the consent of both parties.

Can information in arbitral proceedings be disclosed in subsequent proceedings?

The Federal Arbitration Law contains no provisions on whether arbitral proceedings can be disclosed in subsequent proceedings. In enforcement proceedings, the original award and a copy of the arbitration agreement are required to be submitted with the application for enforcement (Article 55(1)).

Ethical codes

What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

The Federal Arbitration Law does not refer to any ethical codes for arbitrators or counsel. Attorneys acting in arbitration will generally be bound by the ethical rules of the state in which they are admitted to practise law. Ethical codes for arbitrators are also issued by various Bar associations, such as the American Bar Association, which provide ethical guidance.

Costs

Estimation & allocation

How are the costs of arbitration proceedings estimated and allocated?

Article 46(1) of the Federal Arbitration Law states that, unless the parties have agreed otherwise, the arbitral tribunal may estimate the arbitration costs; these shall include the fees and expenses incurred by the members of the arbitral tribunal. The arbitral tribunal may order any of the parties to pay the costs, either in whole or part (Article 46(2)).

However, the award on costs is subject to appeal. In accordance with Article 46(2), the court may – on request of the parties – decide to amend the estimate of the fees or costs. If the arbitration costs have been pre-agreed by the parties, the court cannot reconsider the costs of the arbitration.

Security for costs

Can the national court or tribunal order security for costs under the law in your jurisdiction?

Article 21 of the Federal Arbitration Law sets outs the interim measures an arbitral tribunal may take. These include:

  • ordering the preservation of evidence (Article 21(1)(a));
  • ordering the preservation, custody or sale of goods or property which are the subject matter of the dispute (Article 21(1)(b));
  • ordering the preservation of assets for the purpose of executing a future award (Article 21(1)(c));
  • ordering the maintenance or restoration of the status quo (Article 21(1)(d)); and
  • ordering any measure to prevent any current or future damage or prejudice to the arbitration process, or ordering the parties to abstain from taking any measure that may cause damage or prejudice to the arbitration process (Article 21(1)(e)).

The general powers of the arbitral tribunal, in particular under Article 21(1)(e), should allow an arbitral tribunal to order security for costs.

The award

Requirements

What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

Articles 41(1-5) of the Federal Arbitration Law sets out the legal requirements for a valid award. The award must be issued in writing, issued by the majority, signed, reasoned and include the following details:

  • the details of both parties and the arbitrators;
  • the arbitration agreement;
  • a summary of the litigants’ requests;
  • a summary of the parties’ statements and documents;
  • the verdict for the award and its grounds; and
  • the date and place of its issuance.

Articles 53(1) and (2) of the Federal Arbitration Law sets out the grounds on which an award can be challenged. This includes when the award has not been rendered within the timeframe stipulated in the law or as agreed by the parties, or when the arbitration procedures were invalid.

There is no requirement for the award to be reviewed by any other body.

Timeframe for delivery

Are there any time limits on delivery of the award?

Article 42(1) of the Federal Arbitration Law states that the arbitral tribunal shall issue the award by the date agreed by the parties and that if no date is agreed, the award shall be issued within six months from the date of holding the first hearing of the arbitration procedures. The six-month time limit can be extended with the agreement of the parties.

The award can be annulled pursuant to Article 53(1)(g) if the time limit for rendering the award is not adhered to.

Remedies

Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The Federal Arbitration Law contains no provisions limiting the types of remedy available in the arbitration.

What interim measures are available?  Will local courts issue interim measures pending constitution of the tribunal?

Article 21 of the Federal Arbitration Law sets outs the interim measures an arbitral tribunal may take. These include:

  • ordering the preservation of evidence (Article 21(1)(a));
  • ordering the preservation, custody or sale of goods or property which are the subject matter of the dispute (Article 21(1)(b));
  • ordering the preservation of assets for the purpose of executing a future award (Article 21(1)(c));
  • ordering the maintenance or restoration of the status quo (Article 21(1)(d)); and
  • ordering any measure to prevent any current or future damage or prejudice to the arbitration process, or ordering the parties to abstain from taking any measure that may cause damage or prejudice to the arbitration process (Article 21(1)(e)).

Article 18(2) of the Federal Arbitration Law states that the court chair may order interim or precautionary measures before or during the proceedings.

Interest

Can interest be awarded?

The Federal Arbitration Law contains no provisions on whether interest can be awarded. However, the general position under UAE law, in particular Articles 76 and 88 of the UAE Commercial Code, is that interest can be awarded.

At what rate?

The Federal Arbitration Law contains no provisions on the rate at which interest can be awarded.

Article 76 of the UAE Commercial Code states that “[i]f the rate of interest is not specified in the contract, it shall be calculated according to the market rate prevailing at the time of the transaction, but in this case shall not exceed 12% until payment is made".

Finality

Is the award final and binding?

Yes. Pursuant to Article 52 of the Federal Arbitration Law, the arbitration award is binding on the parties, has the force of res judicata and has the same executive effect as if it was a judicial judgment.

What if there are any mistakes?

Article 50 of the Federal Arbitration Law states that the arbitral tribunal shall, on request by any of the parties or on its own motion, correct material mistakes in the award. The request to correct the award shall be submitted within 30 days from the date the award, unless the parties have otherwise agreed. The arbitral tribunal is required to issue the corrected award within 30 days from the date of the request to correct the award and may extend this time limit by a further 15 days if there is good reason to do so.

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The Federal Arbitration Law does not specifically address whether the parties can exclude by agreement the right of appeal or recourse against the award. However, it is likely there will be limits to such agreements in light of public policy considerations in the United Arab Emirates. 

Appeal

What is the procedure for challenging awards?

In accordance with Article 53(1) of the Federal Arbitration Law, a party may challenge the award by filing nullification proceedings or challenging the award when ratification proceedings are filed by the award creditor. An application to annul or to ratify an award is made by filing an ordinary action before the courts.

The time limit for commencing nullification proceedings is 30 days from the date the award is served on the party seeking the annulment of the award (Article 54(2)).

The court can decide to annul the award in whole or in part (Article 54(3)) and the court may amend the form of the award to remove any invalid aspects, provided that the content of the award is not affected (Article 54(6)).

On what grounds can parties appeal an award?

Article 53(1) of the Federal Arbitration Law sets out the grounds on which a party can apply to set aside an award:

  • A valid arbitration agreement does not exist in accordance with the laws governing such agreement or the Federal Arbitration Law if the governing law is not specified (Article 53(1)(a)).
  • A party to the arbitration agreement did not have the capacity to enter into the arbitration agreement (Article 53(1)(b)) or the capacity to dispose of the disputed right (Article 53(1)(c)), in accordance with the laws that govern the capacity of such party.
  • A party was unable to present its defence because it was not given proper notice of the appointment of the arbitrators or the proceedings or as a result of a violation by the arbitral tribunal of general litigation principles (Article 53(1)(d)).
  • The award does not apply the law agreed on by the parties (Article 53(1)(e)).
  • The composition or appointment of the arbitral tribunal was not in accordance with the agreement of the parties (Article 53(1)(f)).
  • The arbitration procedures were invalid in a way affecting the award or the award was rendered after the expiry of the time limit for rendering the award (Article 53(1)(g)).
  • The award decides on matters which go beyond the scope of the arbitration agreement (Article 53(1)(h)).

The competent court will set aside an award on its own motion if the subject matter of the dispute cannot be settled by arbitration (Article 53(2)(a)) or if the award contravenes public policy or UAE morality (Article 53(2)(b)).

Enforcement

What steps can be taken to enforce the award if there is a failure to comply?

If the award debtor does not comply with the award, the award creditor can apply to local courts for recognition and enforcement.

The procedure to enforce an award is set out at Article 55 of the Federal Arbitration Law. An award must first be ratified by the courts before it can be enforced in the United Arab Emirates. A party seeking to ratify an award must file an application with the courts which is accompanied by:

  • the original copy of the award or an authenticated true copy;
  • a copy of the arbitration agreement;
  • a legal translation of the award in Arabic (if issued in another language); and
  • a photocopy of the document recording the submission of the award with the court.

Article 55(2) provides that the court shall order the ratification and execution of the award within 60 days from the date of application for ratification.

Can awards be enforced in local courts?

Yes. Please see above.

How enforceable is the award internationally?

In addition to the New York Convention, the United Arab Emirates is party to several regional and international treaties that support the enforcement of awards internationally. A UAE award should therefore be enforceable in any state that is a signatory to the treaties that the United Arab Emirates is party to, such as the New York Convention, the Riyadh Convention on Judicial Cooperation between States of the Arab League and the Gulf Cooperation Council (GCC) Convention for the Execution of Judgments, Delegations and Judicial Notification.

The United Arab Emirates has also concluded several bilateral treaties for the enforcement of foreign judgments including with Tunisia, France and India.

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

While there are no specific provisions in the Federal Arbitration Law providing for sovereign immunity, in accordance with Article 247 of the Civil Procedure Code, “public property owned by the state or one of the Emirates” is immune from attachment or seizure for the purposes of enforcement.

In addition, any federal government entity entering into a contract which includes an arbitration agreement requires the prior approval of the Council of Ministers.

Are there any other bases on which an award may be challenged, and if so, by what?

Those in Articles 53(1) and (2) of the Federal Arbitration Law are the only grounds on which an award can be challenged.

If a party is seeking enforcement of a foreign award under the New York Convention or any other convention that the United Arab Emirates is party to, then the provisions of such conventions will apply to any application to challenge the award.

How enforceable are foreign arbitral awards in your jurisdiction?

Foreign awards that do not fall within the scope of the Federal Arbitration Law are subject to the enforcement regime set out in the treaties and conventions that the United Arab Emirates is party to.

The most significant and extensive of these is the New York Convention. According to the exhaustive list of grounds provided by Article 5 of the New York Convention, a court can refuse the recognition and enforcement of an award where:

  • the arbitration agreement is invalid pursuant to the governing law;
  • the defendant has not been given proper notice of the proceedings or is otherwise unable to present their case;
  • the arbitral award deals with matters beyond the scope submitted to the arbitration;
  • the composition of the arbitral tribunal or the manner in which proceedings were conducted contravened the parties’ agreement;
  • the award is not binding or has been set aside by a competent authority of the country in which, or under the law of which, that award was made;
  • the subject matter of the arbitration cannot be settled by arbitration under the law of the jurisdiction in which recognition or enforcement is sought; and
  • if the recognition or enforcement of the award would be contrary to the public policy of the jurisdiction in which recognition or enforcement is sought.

In addition to the New York Convention, the United Arab Emirates is party to regional treaties, such as the GCC Convention for the Execution of Judgments, Delegations and Judicial Notification and the Riyadh Convention on Judicial Cooperation between States of the Arab League. Foreign awards from these member states should therefore be enforceable in the United Arab Emirates, provided that the award complies with the terms of the applicable treaty.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

The recognition and enforcement of a foreign award is subject to Article 5 of the New York Convention, not the Federal Arbitration Law.

Article 5 of the New York Convention sets out an exhaustive list of grounds based on which a Court can refuse the recognition and enforcement of an award (see above).

Third-party funding

Rules and restrictions

Are there rules or restrictions on third-party funders?

The Federal Arbitration Law contains no provisions on third-party funding. However, as third-party funding of litigation or arbitration is not prohibited under UAE law, there should be no restrictions for arbitration.

Class-action or group arbitration

Concept

Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

No. There are no specific provisions in the Federal Arbitration Law providing for class-action or group arbitration.  

Hot topics

Emerging trends

Are there any hot topics or trends emerging in arbitration in your jurisdiction?

The recent adoption of the Federal Arbitration Law is a significant development in the arbitration space and is expected to modernise and streamline the UAE arbitration framework.

The Federal Arbitration Law, which is modelled on the UNCITRAL Model Law, provides more certainty on enforcement issues and addresses several procedural issues which previously resulted in inefficiencies and inconsistencies.

There has also been recent growth in the number of arbitration institutions in the United Arab Emirates, reflecting the popularity of arbitration in the region. In addition to the key arbitration institutions, such as the Dubai International Financial Centre and the Dubai International Financial Centre-London Court of International Arbitration, there are a number of industry-specific arbitration institutions which have been recently established; for example, the Emirates Maritime Arbitration Centre was established for the resolution of maritime disputes. The International Chamber of Commerce (ICC) International Court of Arbitration is also to open a representative office in the Abu Dhabi Global Markets, which will be able to accept the registration of arbitration cases under ICC rules.