United Arab Emirates: A (SAND) STORM IN A TEACUP - The Right To Representation In UAE Arbitration

There is a new hot topic in the UAE legal community: can legal consultants lawfully represent parties to an arbitration in the UAE? The debate stems from a new provision in a recently issued Federal Ministerial Resolution. In this article, we explain the debate, and put forward two interpretations of the law relevant to the point. We also comment on the recent clarification issued by the Dubai Legal Affairs Department

Legal foundation of the debate

Ministerial Resolution No. 972 of 2017 on the Executive Regulations of Federal Law No. 23 of 1991 on the regulation of advocates (the Advocates Law) was issued on 25 September 2017. It came into effect on the date of publication in the Official Gazette of the Federal Government on 28 September 2017.

Article 2 of the new Executive Regulations states "...arbitration tribunals and judicial and administrative committees may not accept a person to act as a lawyer on behalf of another person unless his name is registered in the Roll of Practising Lawyers". Entry onto the Roll of Practising Lawyers is restricted to UAE nationals who have a degree in law or Shari'ah and who have completed a training period as an advocate.

Article 2 also provides that a power of attorney to empower a person to represent or plead before an arbitral tribunal may only be issued in favour of a practising advocate.

While Article 2 came into force on 28 September 2017, diverging opinions on its scope of application came to light in Dubai Arbitration Week and, shortly afterwards, in an article published by the Global Arbitration Review.

Article 2 – Two possible interpretations

Restrictive interpretation

A restrictive interpretation of Article 2 is that, because it expressly permits only practising advocates to appear before arbitral tribunals, by implication it also excludes all other representatives including legal consultants and non-lawyers.

This is the view which has been widely published.

Permissive interpretation

There is an alternative interpretation of Article 2. Article 2 appears in the Federal Executive Regulations to the Advocates Law. The Advocates Law is only concerned with the practice of law by advocates. This role in the legal community is treated as a distinct profession to the work of legal consultants. No provision of the Advocates Law specifically restricts the conduct of legal consultants in the UAE, and Article 2 must be read in this context.

The exemptions from the scope of Article 2 strengthen this alternative interpretation. The carve-outs from the restriction are aimed at non-practising advocates, to enable UAE nationals who are not listed on the Roll of Practising Lawyers (but otherwise would qualify as such) to represent public sector entities and government authorities, at a Federal and Emirate level.

Emirate power to legislate – Dubai law and DLAD clarification

The UAE Constitution provides each of the Emirates with concurrent jurisdiction between the Federal legislative authority and the legislative authorities of each of the seven Emirates.

In the Emirate of Dubai, the Dubai Legal Affairs Department (the DLAD) specifically regulates the practice of law by legal consultants. On 7 December 2017, the DLAD issued a letter addressed to the DIFC Arbitration Institute regarding the current debate on Article 2. The letter points to Dubai Executive Council Resolution No. 22 of 2011 on the fees and fines relating to the practice of law and legal consultancy, which gives the power to the DLAD to regulate the legal consultancy profession in Dubai. By virtue of this power, in the letter, the DLAD confirmed that all lawyers who are licensed in Dubai, including foreign lawyers registered as legal consultants with the DLAD, may appear before any arbitral tribunal in Dubai. The letter also stated that legal consultants visiting the Emirate of Dubai from elsewhere may represent parties before an arbitral tribunal in Dubai.

The letter reinforces the provisions of Dubai Administrative Resolution No. 234 of 2015 adopting the by-laws concerning the registration of legal consultants in the Emirate of Dubai which allows legal consultants to practise the "Legal Profession" (although the Resolution is not specifically referred to in the DLAD letter). The "Legal Profession" is defined as the provision of Legal Services to the public, where "Legal Services" expressly includes representing parties before arbitration tribunals.

Under general principles of interpretation, a specific enabling provision is likely to take precedence over a general, non-specific restriction. Constitutionally, where a law is validly enacted by each of the authorities at Federal and Emirate level acting within their concurrent jurisdictions, a Federal Law will only take precedence over Emirate level legislation where they are contradictory. It is also a general principle of interpretation that where varying interpretations of the same law are contemplated, the law should be read in a manner which gives it effect.

Therefore, interpreting Article 2 in context and with regard to the concurrent legislative powers shared by the Federal and Dubai legislative authorities, Article 2 of the Advocates Law, and the DLAD's confirmation that legal consultants are entitled to represent parties before arbitration tribunals, are in fact complementary.

In short, legal consultants are entitled to represent parties to arbitration proceedings held within the Emirate of Dubai.

Choice of the parties under Arbitration Rules

One of the features of arbitration is that a party is free to appoint any person to represent it, regardless of qualification or nationality. In this, arbitration differs to the rights of audience before courts which in many jurisdictions are restricted to certain categories of legally qualified individuals. This feature is expressly stated in arbitration rules, or widely accepted by arbitration centres. Arbitrators appointed to an arbitration tribunal are not required to have any legal qualifications and it is not uncommon for industry experts to be preferred in specialised industries, such as construction.

Article 7 of the Dubai International Arbitration Centre (DIAC) Arbitration Rules contains a rule on representation in line with this feature of arbitration: "the parties may be represented or assisted by persons of their choice, irrespective of, in particular, nationality or professional qualification". The DIAC Arbitration Rules are passed into Dubai law by virtue of Dubai Decree No. 11 of 2007.

Article 3 of the Rules of Arbitration of the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) provides that parties to arbitration proceedings subject to the said rules "may at any stage select those who shall act for them, drawn from among lawyers or others...". The ADCCAC Rules are recognised by Abu Dhabi law by virtue of Abu Dhabi Resolution No. 7 of 1993, applicable to regulations approved from time to time by the Board of Directors of the ADCCAC.

The Rules of Arbitration of the Sharjah International Commercial Arbitration Centre (Tahkeem) do not limit party representation to lawyers or advocates. They refer instead to party representatives (see, for instance, Articles 4(4)B), 5(1)A) and 17).

Scope of Article 2 – Financial free zones

The financial free zones of the Dubai International Financial Centre (DIFC) and Abu Dhabi General Markets (ADGM) have their own legal system and court structure. Laws and regulations enacted for each of these free zones provide for a separate regulatory framework governing the practice of law and party representation before each of the DIFC Courts and the ADGM Courts. Non UAE nationals are expressly permitted to represent parties before these courts. It follows that arbitral proceedings with a seat in one of these free zones, and which physically take place within them, are unaffected by Article 2.

Article 2 does not apply to arbitrations seated and held outside of the UAE.

The current debate affects arbitrations with a seat onshore, or which are physically located onshore (even with a seat in one of the financial free zones).

Conclusions

Legal consultants, as well as UAE nationals registered as practising advocates, are entitled to represent parties to arbitration proceedings in Dubai. This has now been made clear by the DLAD in its letter on Article 2.

Our view is that the permissive interpretation of Article 2 is the correct one. Therefore, subject to the applicable arbitration rules, we also believe that legal consultants are entitled to appear before arbitral tribunals in Abu Dhabi and Sharjah as well.

Nevertheless, there is a risk that counterparties may seek to take advantage of the present debate about the meaning of Article 2 in relation to arbitral proceedings with a seat or physically taking place in the other Emirates, outside of Dubai. Consequently, parties who are contemplating taking arbitral proceedings, or who are in the midst of arbitration, may wish to consider a range of options to reduce the risk of disruption.

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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