A general introduction to international arbitration in United Arab Emirates

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Introduction

The United Arab Emirates (UAE) boasts a unique legal system influenced by both Islamic law and modern legal principles. As a federation composed of seven emirates, each with its own degree of autonomy, the UAE's legal structure reflects a blend of federal and local laws. With federal laws providing a framework for governance, each emirate retains the authority to enact its own legislation, allowing individual emirates to address issues specific to their needs. Additionally, Abu Dhabi and Dubai have various designated 'free zones', including the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC), which act as 'offshore' common law governed jurisdictions within those emirates.

Arbitration in the UAE is governed by the UAE Federal Arbitration Law No. 6 of 2018, as amended (the UAE Arbitration Law). The UAE Arbitration Law is based on the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration and applies to all ongoing and future arbitral proceedings, even if reliant on an arbitration agreement predating its enactment. It provides that the UAE courts shall decline any action that falls within the scope of an arbitration agreement if a judicial objection is raised (provided this is made prior to any motions or pleas being entered).¹ All agreements to arbitrate must be evidenced in writing (not necessarily in the form of a formal contract)² and, importantly, the individual entering into the arbitration agreement must have capacity or specific authority to do so.³

The recent amendments to the UAE Arbitration Law, which were introduced by Federal Law No. 15 of 2023, provide significant changes to the regime in the UAE 'aiming to enhance its efficiency, flexibility, and attractiveness for domestic and international parties'.⁴ The amendments:

1. allow for the appointment of an arbitrator who is also member of the Board of Trustees or otherwise involved in the management of the relevant arbitral institution;⁵
2. confirm the parties' right to choose the procedure to be followed in proceedings;⁶
3. acknowledge that the parties may agree to conduct arbitral proceedings virtually;⁷
4. stipulate that the tribunal has the power to determine the applicable rules of evidence (if the law is otherwise silent on the matter);⁸ and
5. extend the scope of confidentiality from simply the hearings, to the proceedings themselves.⁹

The UAE Arbitration Law permits judicial assistance from the offshore courts and designates the Court of Appeal to supervise arbitration-related cases.¹⁰ The Court of Appeal will also provide for 'emergency jurisdiction', even in circumstances where it does not have jurisdiction, in cases such as preliminary applications for attachment of assets or urgent applications for the transfer of assets. The UAE Arbitration Law does not apply to arbitrations seated in offshore jurisdictions within the UAE (unless onshore is specified as the seat), being the DIFC and ADGM, each of which have their own legislative framework for arbitration.

The DIFC is a financial free zone located in Dubai and established in 2004,¹¹ which houses its own common law courts.¹² The DIFC adopted its own civil, commercial and arbitration laws, and largely follows the English common law approach. Jurisdiction in relation to criminal matters is, however, retained by the onshore UAE courts. Arbitration in the DIFC is governed by the DIFC Law No. 1 of 2008, as amended (the DIFC Arbitration Law). The DIFC courts, operating, inter alia, a Court of First Instance and a Court of Appeal, are the curial and supervisory courts for arbitrations seated in the DIFC.¹³

As at February 2025, cases within the arbitration division of the DIFC totalled 4.5 billion dirhams, with an average case value of 342.6 million dirhams for the first six months of the year,¹⁴ demonstrating how popular a choice the jurisdiction is for arbitration.

The ADGM is a financial free zone located in Abu Dhabi and established in 2013,¹⁵ although it has only been fully operational since October 2015. The ADGM has its own civil, commercial and arbitration laws, and is the first jurisdiction in the Middle East to directly apply the totality of English common law,¹⁶ inclusive of the rules and principles of equity. Arbitration in the ADGM is governed by the ADGM Arbitration Regulations 2015, as amended (the ADGM Arbitration Regulations). The ADGM has its own common law courts¹⁷ that are broadly modelled on the English judicial system and are the supervisory courts in respect of arbitrations seated in ADGM.

Since February 2024, the Abu Dhabi International Arbitration Centre (arbitrateAD) has been administering all arbitration brought in the ADGM (unless the parties agree otherwise).

Arbitration has become increasingly popular as a method of resolving disputes in the UAE, with several prominent arbitration centres offering their services to businesses and individuals. Among these, the Dubai International Arbitration Centre (DIAC), with oversight from the well-respected DIFC courts, is the key player. However, the ADGM's arbitrateAD is set to present significant competition.

The DIAC is the primary arbitral institution in Dubai, having been established by the Dubai Chamber of Commerce and Industry in 1994; it offers a modern and efficient platform for the resolution of commercial disputes. The DIAC's rules were revised in 2022, providing parties with a clear framework for conducting arbitral proceedings and confirming that, in the absence of a clear agreement as to the seat, this will be presumed to be the DIFC, rather than onshore UAE (as was the position under the 2007 Rules). All arbitrations commenced under the DIFC–London Court of International Arbitration (LCIA) after September 2021 are now administered by the DIAC.¹⁸

The Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) was historically the main onshore arbitration institution in the UAE's capital, Abu Dhabi.¹⁹ In December 2023, the Abu Dhabi Chamber of Commerce and Industry launched arbitrateAD, a new international arbitration centre based in Abu Dhabi. Effective since 1 February 2024, the governance structure and arbitration rules of arbitrateAD replaced those of its predecessor.²⁰ New cases registered on or from 1 February 2024 will be administered by arbitrateAD, with ADCCAC continuing to administer any pre-existing cases.²¹

The International Court of Arbitration of the International Chamber of Commerce (ICC) established its Middle East and North Africa representative office in the ADGM in 2017, with a case management office for the ICC Court Secretariat being opened in the ADGM in 2020 (together, the ICC Office). The activities of the ICC Office were integrated into the new case management structure of the ICC Court Secretariat, which now administers Middle East-related ICC arbitrations in the ADGM.²²

The ADGM launched the ADGM Arbitration Centre, a hearing facility available to all parties seeking to resolve their disputes through arbitration or mediation.²³ In December 2023, the ADGM Arbitration Centre launched 'ODR@ADGM', which is an online dispute resolution platform providing a digitalised settlement and mediation service.²⁴

Additional arbitral institutions in the UAE include:

1. the Sharjah International Commercial Arbitration Centre;
2. the Saudi Centre for Commercial Arbitration (SCCA) in the DIFC;
3. the UAE Sports Arbitration Centre;
4. the Ras Al Khaimah Centre for Reconciliation and Commercial Arbitration;
5. the Ajman Centre for Commercial Conciliation and Arbitration;
6. the International Islamic Centre for Reconciliation and Arbitration; and
7. the Umm Al Quwain Conciliation and Arbitration Centre.

In the past decade, arbitration has emerged as a preferred method for resolving disputes in the UAE, offering parties a flexible and efficient alternative to traditional litigation. While a clear distinction exists between international and domestic arbitration law within the UAE's legal framework, the UAE Arbitration Law applies to both domestic and international arbitral proceedings seated in the UAE.

Article 2 of the UAE Arbitration Law confirms that the law applies to (1) arbitration conducted in the UAE, unless agreed otherwise by the parties, (2) international arbitrations conducted outside the UAE, only if the parties agree, and (3) arbitrations arising out of a contractual or non-contractual legal relationship governed by the laws of the UAE, unless excluded by mandatory UAE laws.²⁵

The UAE Arbitration Law distinguishes between international and domestic arbitration and determines the required criteria for an international arbitration. An arbitration will be considered an international arbitration, even if it is conducted in the UAE, in circumstances where: (1) the parties have their principal place of business (or, in the absence of a principal place of business, the place of domicile) located in two or more different countries at the time of entering the arbitration agreement; (2) the venue of arbitration, the place where a substantial part of the parties' commercial obligations were implemented, or the place most relevant to the dispute is located outside the country in which the principal place of business or domicile (of any of the parties) exists; (3) the subject matter of the dispute is connected to more than one country; or (4) the parties expressly agreed that the subject matter is connected to more than one country.

A key feature in the UAE Arbitration Law is the principle of party autonomy, which is central in international arbitration, whereby it allows parties to choose their governing law and the arbitral procedure.²⁶

Similarly, the DIFC Arbitration Law and the ADGM Arbitration Regulations apply equally to domestic and international arbitration.