Having been a leading construction and engineering lawyer and arbitrator for over 40 years, as well as a prominent figure in the UAE legal landscape for close to two decades, Dentons' Peter Shaw has witnessed the ups and downs in the practice of commercial arbitration in the UAE.
In this interview, Peter shares his views on the history and future of dispute resolution in the Emirates and also discusses what he's looking forward to in the coming years at Dentons.
When did you first start working in the Middle East?
I first visited Bahrain shortly after the First Gulf War upon invitation from a client whom I had been advising in relation to the new Valletta Airport in Malta. A year later I was instructed by the Bahrain Defence Force to defend claims brought by a contractor in an arbitration in relation to the construction of a military air base, which involved nine discrete hearings over a period of five years.
Towards the end of this period I was additionally instructed on my first project in the UAE, which was a dispute between my client, the EPC Contractor and its main civils subcontractor on the first phase of the Al Taweelah Power and Desalination Project in Abu Dhabi.
What did the legal landscape look like in the Gulf at that time?
The UAE had only a handful of international law firms in the 1990s who, due to the nature of the economy at the time, were mainly advising on matters in the real estate, construction and energy sectors. Dentons, named Fox & Gibbons at the time, employed approximately seven lawyers and was still located in Dubai Creek. The Downtown area, as well as much of the rest of Dubai as we know it today, hadn't yet existed.
Today the UAE is home to some of the most talented lawyers in the world with leading international and local expertise in a range of legal disciplines, a stark change from the time I arrived to the region.
What are some of the most notable developments that you have witnessed in the past 25 years?
I think the impact of the global financial crisis of November 2008 has been momentous. In particular the sharp upsurge in construction disputes caused by the financial squeeze changed how disputes had traditionally been resolved in the Emirates, which had usually been in a majlis. After the onset of the financial crisis, disputes rapidly began to shift to being resolved through arbitrations.
More recently, the long-term reduction in the price of oil has also had a strong effect on the region with pressure on governments to accelerate the creation of new sources of revenue by diversifying the economy, creating long-term strategic plans, as well as other means.
What do you think have been the key changes in the legal market in your time here?
The most notable change has perhaps been the influx of international law firms into the region beginning in the mid-2000s, which was substantial.
The development of the DIFC and the DIFC Court, together with its own arbitration law and centre based on English Common Law, as well as the more recent Abu Dhabi Global Market Courts, has also had strong positive implications for the development of a sophisticated arbitration hub in the UAE. I would go so far as to say as it has also helped to make Dubai a more attractive city for investment.
Do you think there is any prospect of implementing legislation here similar to the Housing Grants, Construction and Regeneration Act in the UK?
It would be great to see the introduction of an interim binding payment regime in the region. As the late Michael Latham said, 'cash flow is the life blood of the construction industry' and it is as true here as anywhere else.
If such a scheme were introduced, and were it possible to enforce such decisions by way of some form of summary judgment, then I believe it would make a substantial difference to the construction and real estate sectors. Whilst the number of disputes may not reduce as the result of this sort of regime, the length of time and cost involved in resolving them certainly would. I do however think such a regime may be a long way off.
What difference do you think an effective arbitration act in the UAE would make?
Shortly after I arrived in Dubai in 2004 I first set eyes on the first draft of a modern arbitration law, which is yet to come into effect. The main difference that having a new law in place would make would be to restrict court interference with valid awards with very limited rights to set them aside.
If you could change one aspect of arbitration in the Middle East, what would it be?
It would be great to see more predictability in the judgments of the "onshore" courts, particularly in cases linked to enforcement of arbitral awards. Unfortunately this uncertainty encourages award debtors to challenge enforcement of awards. During my time in the region there has been improvement in the courts relinquishing their jurisdiction wherever they are faced with a contract which includes an agreement to arbitrate, but the court's approach to enforcement still leaves a lot to be desired.
What do you think the legal market will look like in the UAE in 25 years from now?
The UAE will inevitably face numerous challenges in the next 25 years, both legal as well as with the economy, as it strives to fulfil its vision to become one of the best countries in the world. As the past 25 years have demonstrated, however, it can be very difficult to predict what may happen in such a fast-growing nation.
I would hope that the UAE will continue on its remarkable path of success and growth, in particular in the areas of law, education, technology, science and culture.
What have you enjoyed the most about living in the region?
The one thing which is very unique and interesting about Dubai is the diversity of cultures and backgrounds of the people who live here: it's truly is a cosmopolitan city. I have also enjoyed learning some Arabic while I've lived here as well as being able to experience Islamic art and calligraphy, which I admire greatly.
From a career perspective, it's also very exciting have been at the cutting-edge of legal developments in the region. It's certainly a place where change can be rapid and you are faced with new challenges on a regular basis.
What are you looking forward to in the coming years at Dentons?
I look forward to continuing to be part of Dentons' success as it develops into a truly leading global law firm. I will also enjoy continuing to work in a dynamic environment, with clients with which I have built up relationships over many years. I indeed have no intensions or retiring any time soon.