The Federal Law No. (6) of 2018 on arbitration (‘Arbitration Law') defines arbitration as ‘ A procedure regulated by law in which a dispute between one or more parties is submitted, by agreement of the parties, to an arbitral tribunal which makes a binding decision on the dispute'(Article1 ). The UAE Arbitration Law is modelled on the UNCITRAL (United Nations Commission on International Trade Law) model Arbitration Law which represents the international best practices. Pursuing an arbitration process over the traditional litigation route can offer many distinct advantages such as choice of language, Confidentiality, flexibility to choose the number of arbitrators, the seat of arbitration, procedures etc.
Common formalities required in an arbitration process in the UAE:
In this article, we will discuss the common procedures and formalities of an arbitration process pursuant to the Arbitration Law.
- An Arbitration Agreement is required to be in writing, and otherwise, it shall be considered void (Article 7 (1)).
- An Arbitration Agreement may only be concluded by a natural person having the legal capacity with specific authority to arbitrate (Article 4(1))
- The Arbitration Agreement may also be concluded after a dispute has arisen, even if an action in this respect has already been brought before a court. In such a case, the agreement must determine matters included in the arbitration. (Article 5(2))
- The Parties are free to agree on a procedure of appointing the arbitrator or arbitrators and the time and method of appointment (Article 11 (1)
- The parties are free to choose the language of the arbitral proceedings, and if no specific language is chosen, then the proceedings will be in Arabic.
Appointment of arbitrator:
- Sole Arbitrator: The parties may choose a sole arbitrator with their mutual consent, and in the instance the parties are unable to agree on the Arbitrator within fifteen days after either party submits a written request to the other party requesting such appointment, the arbitrator shall be appointed, upon request of a party, by the concerned body (Arbitration Centre)(Article 11(2)).
- Arbitration with three arbitrators: In an Arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within fifteen days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within fifteen days of the appointment of the last Arbitrator, then an appointment shall be promptly made, upon request of a party, by the concerned body(Arbitration Centre) (Article 11(3)).
Interim and Partial Awards:
Both interim and partial awards can be issued by the arbitral tribunal during the arbitration process before rendering the final award. (Article 39 (1)). Such interim awards may be rendered by the arbitral tribunal pursuant to the nature of the dispute for various reasons such as: preserving evidence;preserving goods or other perishables; preserving status quo etc. (Article 21)
The arbitral tribunal is required to issue a final award either within such timeframe as agreed between the parties to the dispute or in the instance there is no such agreement, then the final award shall be issued within six months from the date of the first hearing. However, the tribunal is allowed to extend for six additional months (Article 42(1))
One of the major new developments introduced by the arbitration law is also to allow for easy and simpler enforcement proceedings. There are also stricter grounds incorporated to ensure that arbitrators are bound to close arbitral proceedings in a timely fashion and also provisions that ensure that arbitrators carry out their function in an unbiased and neutral manner. The adoption of this law in the UAE signifies the country's commitment to becoming an advanced arbitration-friendly jurisdiction.
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.