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?
The following legal requirements apply for the recognition of an award:
- The award must be in writing and signed by the arbitrators. The signatures of the majority of the arbitrators is sufficient, provided that the reason for any omitted signature is stated.
- Unless the parties have agreed to the contrary, the award must include the reasons for the decision.
- The award must include specific information, including:
- the names and addresses of the parties;
- the names, nationalities and addresses of the arbitrators;
- the text of the arbitration agreement;
- a summary of the parties’ claims, statements and documents; and
- the date and place of issue of the award.
Timeframe for delivery
Are there any time limits on delivery of the award?
Yes, the final award must be issued within the period agreed by the parties. If there is no such agreement, the final award must be issued within six months from the date of the first hearing of the arbitration. The tribunal may extend this period by up to six additional months, unless the parties agree to a longer extension.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
There is no limitation provided in the applicable legislation. Declaratory relief is sought and granted in arbitration, whereas declaratory relief is rarely granted by the national courts.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Yes, local courts will issue interim measures according to the constitution of the tribunal, which are usually freezing orders. Interim measures are granted at the discretion of the court. The Federal Arbitration Law 6/2018 (the Arbitration Law) empowers the tribunal to grant interim or conservatory measures that it considers necessary given the subject matter of the dispute, including orders to:
- preserve evidence;
- preserve goods which constitute part of the subject matter of the dispute;
- preserve assets and funds;
- maintain or restore the status quo; and
- take action that would prevent or refrain from taking action that is likely to cause imminent harm or prejudice to the arbitration process.
The above measures can also be granted by a local court through an application to the chief judge of the Court of Appeal.
Can interest be awarded?
At what rate?
If the interest rate is not agreed between the parties, UAE law permits a maximum rate of 12% under the Commercial Transactions Law. The courts generally award interest at a rate of 9% and this is usually adopted in arbitrations.
Is the award final and binding?
Yes, the award has the effect of res judicata under the Arbitration Law.
What if there are any mistakes?
On its own initiative or following the request of a party, the tribunal may correct any material errors in the award which are clerical or computational. A request to correct such errors should be made within 30 days from receiving the award.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
No, any right of appeal or other recourse available under law cannot be excluded by agreement of the parties.
What is the procedure for challenging awards?
There is no appeal available on the merits of the award. However, an award can be set aside on limited grounds. An application to set aside an award must be brought before the Court of Appeal within 30 days from receiving notice of the award or can be made during proceedings for ratification of the award.
On what grounds can parties appeal an award?
Foreign awards can be set aside on the grounds set out in the New York Convention.
Local awards can be set aside on the following grounds:
- There is no arbitration agreement or the agreement is void or has lapsed.
- A party agreeing to arbitration does not have the capacity to agree to arbitration.
- A party fails to present its case in the arbitration because it was not given proper notice of the appointment of an arbitrator, of the arbitral proceedings or for any other reason beyond its control.
- The award excludes the application of the parties’ choice of law for the dispute.
- The composition of the tribunal or the appointment of the arbitrator was not in accordance with the law or the agreement between the parties.
- The arbitral proceedings were marred with procedural irregularity or the arbitral award was not issued within the specified timeframe.
- The award goes beyond the arbitrator’s scope.
- The subject matter of the dispute cannot be settled by arbitration.
- The arbitral award conflicts with the public order and morality of the state.
What steps can be taken to enforce the award if there is a failure to comply?
On ratification of the award it can be enforced through the local enforcement courts.
Can awards be enforced in local courts?
How enforceable is the award internationally?
The United Arab Emirates has ratified the New York Convention. Therefore, in theory an award rendered in the country may be enforced in any other country that has ratified the New York Convention, subject to the terms of the convention and the laws of the foreign state.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
State or sovereign assets cannot be attached in the United Arab Emirates. While the concept of state immunity is not present in federal legislation, certain permissions may be required before instituting proceedings against government entities. For example, in Dubai, a complaint must first be filed before the Dubai Rulers Court (which is now part of the Dubai Legal Affairs Department) if the defendant is a Dubai government department.
Are there any other bases on which an award may be challenged, and if so, by what?
There are no other grounds than those set out above.
How enforceable are foreign arbitral awards in your jurisdiction?
Since the United Arab Emirates has ratified the New York Convention, a foreign award may be enforceable in the country provided that the award was rendered in a country that has ratified the New York Convention. The UAE courts generally apply the provisions of the New York Convention for the enforcement of a foreign arbitral award. New regulations have recently been introduced for the recognition and enforcement of foreign arbitral awards. These regulations have not yet been tested but in theory make the enforcement of foreign arbitral awards faster and easier than local arbitral awards.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
It is unlikely that a local court will enforce an award if it has been set aside by the courts in the seat of arbitration.