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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.
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.
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".
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.
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)).
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).
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