United Arab Emirates: When Does An Arbitration Award Acquire Res Judicata Status In Dubai?

Res judicata is a fundamental legal principle, ensuring that there is a definitive end to litigation and providing reassurance that parties cannot be  pursued for the same matter twice. In the UAE, res judicata is only applied to causes of action and  issues which have actually been tried and adjudicated in a previous proceeding. This constraint  seeks to exclude causes of action and issues that could or ought to have been presented in the  previous proceedings. Here, we address the specific question of when the Dubai courts will give an  arbitration award res judicata status.

THE RES JUDICATA STATUS OF ARBITRATION AWARDS ISSUED IN DUBAI

As the UAE is a civil law jurisdiction, the doctrine of res judicata is codified in law by virtue of article 92 of the UAE Civil Procedures Law and article 49 of the UAE Evidence Law. Judge Abdul Wahhab Abdoul of the Union Supreme Court explained in his judgment issued on 6 October 2004 (Case No. 707/Judicial Year 23) that the effect of these two articles is that "... a dispute may not be resubmitted in respect of a question that has already been judicially decided."

In accordance with article 49 of the UAE Evidence Law, issues that have been determined and are subject to a final court judgment have acquired res judicata status and cannot be brought before the court again. A court judgment receives final status once it has been passed by the Court of Appeal, irrespective of the fact that it can be appealed to the Court of Cassation (Judge Al Husayni Al Kanani of the Union Supreme Court, Case No. 190/26 9-JY-27, June 20, 2005). In other words, it is not necessary to wait for a final decision of the Court of Cassation before a court judgment is given res judicata status.

Applying a similar reasoning to arbitration awards, the Court of Cassation has, on numerous occasions, held that arbitration awards are also given res judicata status as soon as they are issued. For example,

in a decision rendered on February 3, 2008 (Case No. 265/2007), the Court of Cassation held that it was "well settled that the award of the arbitrators acquires the status of res judicata immediately upon its being issued." A similar sentiment has been noted in earlier decisions of the Court of Cassation, in particular a judgment issued on December 10, 2005, in Case No. 225/2005.

The Court of Cassation has recently reconfirmed the above position in a judgment dated August 21, 2016, issued in Commercial Appeal 199 of 2014. In this case, the parties had entered into a contract for the supply of work. The claimant carried out the works but was not paid in full by the respondent. The claimant then commenced arbitration proceedings for payment of the outstanding debt. The claimant filed its arbitration request with the Dubai International Arbitration Centre ("DIAC"). DIAC appointed an arbitrator who heard the case and issued an award in the claimant's favor.

Upon receiving the award, the claimant applied to the Dubai Court of First Instance to have the award recognized and enforced. At the same time, the respondent filed an application with the same court to have the award set aside. The respondent also filed an application to have an arbitrator appointed by the court on the basis that DIAC had lacked the authority to appoint an arbitrator in the first place.

The Court of First Instance dismissed the respondent's application to appoint a new arbitrator on the basis that the respondent had acknowledged, agreed to and participated in the DIAC arbitration. With regard to the parties' applications relating to the arbitration award, the Court of First Instance found in favor of the claimant. The respondent appealed the Court of First Instance's decision in both the Court of Appeal and the Court of Cassation. The Court of Cassation upheld both decisions of the lower courts and found in favor of the claimant.

In rendering its decision, the Court of Cassation once again confirmed that arbitration awards are given res judicata status as soon as they are issued. The Court of Cassation also confirmed that this status is not lost or put on hold during any court proceedings during which the validity of the arbitration award is considered. In other words, the res judicata status is only removed if an award is annulled.

For a number of years, the Dubai courts have taken a clear and consistent approach in setting out when an arbitration award acquires res judicata status and how and when this status can be revoked. This will no doubt provide comfort to international arbitration practitioners and users in Dubai, not least because of the absence of any guidance in the institutional arbitration rules on how this issue is to be handled.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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