Recent court decisions highlight a few of the challenges parties
may face in relation to the enforcement of arbitral awards in the
onshore UAE courts. A summary of those decisions is set out in this
These developments will be of considerable interest to those
clients wishing to enforce domestic or foreign arbitral awards in
Fluor v. Petrixo Oil & Gas
In a judgment dated 30 March 2016, the Dubai Court of Appeal
refused to enforce a foreign ICC award (seated in London) on the
grounds that the claimant had failed to adduce evidence showing
that the UK had signed and ratified the New York Convention
In the absence of such evidence, the Dubai Court of Appeal
determined that evidence was required to prove that the English
courts would enforce an award issued in the UAE (e.g. reciprocity).
In reaching its decision, the Dubai Court of Appeal relied upon
Articles 235 and 236 of the UAE Civil Transactions Code (see UAE
Federal Law No. 11 of 1992, as amended), which provides that
foreign awards originating from countries which are not signatories
to the Convention must demonstrate that their domestic courts would
enforce an award issued in the UAE. Given that there was no English
court precedent which enforced a UAE award, the Dubai Court of
Appeal declined the application for enforcement.
The Convention does permit signatories to incorporate reservations
as a condition of their ratification. Those reservations include
the following: (1) the state will only apply the Convention in
respect of awards from other contracting states and (2) in relation
to non-contracting states, the state will only apply the Convention
to the extent that those states grant reciprocal treatment. The UAE
has not opted to incorporate either of those reservations.
The decision has been appealed to the Dubai Court of Cassation
(Dubai's highest court). It is hoped that the Dubai Court of
Cassation will clarify the evidentiary requirements necessary to
enforce arbitral awards successfully in the UAE.
Dubai Court of Cassation (Case No. 75 of
In a recent judgment, the Dubai Court of Cassation held that
Article 216 of the Civil Procedure Law (CPL) of the UAE permitted
the nullification of an arbitral award if there is an error in the
award or if an irregularity exists in the procedure resulting in
the issuance of the award.
In this case, the claimant commenced enforced proceedings before
the Dubai Commercial Court to ratify an arbitral award issued
pursuant to the DIAC Rules (Rules). The Dubai Commercial Court
proceeded to ratify the award. In turn, the respondent commenced
fresh proceedings to challenge the award in the Court of First
Instance on the grounds that the respondent had filed a civil case
before the courts during the arbitration. The civil case was
dismissed previously but was then under appeal. On that basis, the
respondent contended that the arbitrator should not have issued the
award until and unless the civil case was dismissed at the
appellate level, pursuant to Article 216 of the Civil Procedure
The Court of First Instance found in favour of the respondent and
the decision was subsequently upheld by the Court of Appeal. The
matter was then appealed to the Dubai Court of Cassation.
The Dubai Court of Cassation reasoned that arbitral proceedings
shall be suspended in the event of a challenge on the basis of
Article 39 of Decree No.2 of 1994. Further, it was held that a
party may challenge an award based on the general laws of the UAE
even if they are not enumerated specifically in the Rules.
Arguably, the practical effect of this is that a respondent in an
arbitration may attempt to frustrate or delay arbitral proceedings
by initiating court proceedings to challenge an arbitral award or
the procedure which resulted in the award, pursuant to Article 216
of the CPL.
The enforcement of arbitral awards in the UAE can be an
unpredictable and protracted process. We will continue to post
further updates in respect of recent enforcement decisions as and
when they become available.
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