Introduction 

Arbitration is one of the alternative methods available to litigants to resolve their disputes. Albeit not without controversy, arbitration is fast and not as expensive as litigation in courts.^[1] When compared to litigation before courts, arbitration allows for informality and privacy, which could lead to less acrimonious relationships between the parties involved in a dispute.

Arbitration in the UAE has undergone tremendous changes over the past few years. Most recently, a new stand-alone arbitration law came into existence in 2018,^[2] effectively replacing the old arbitration regime that comprised the arbitration provisions contained in the Civil Procedures Code.^[3] Federal Law No. 6 of 2018 on Arbitration (hereinafter, “the New Arbitration Law”) was largely influenced by the provisions of the UNCITRAL Model Law on International Commercial Arbitration, and it represented significant progress towards making the UAE a more “arbitration-friendly” jurisdiction. 

The New Arbitration Law was nearly 10 years in the making. Investors and practitioners eagerly anticipated it in order to cement UAE’s status as a world-class investment destination. However, the text of the New Arbitration Law is only one part of the overall picture. Crucial to the success and understanding of the New Arbitration Law is the court’s implementation of its provisions. 

Dubai is considered as a model and major jurisdiction for arbitration within the region.^[4] Over the years, arbitration and other special tribunals have been invoked in Dubai to resolve disputes in an easier and more practical fashion.^[5] In this context, Dubai Courts^[6] play an important role and the purpose of this publication is to review some of the most recent judicial decisions concerning the provisions of the New Arbitration Law so as to capture the attitude and pattern of the judiciary towards the legislation.^[7]

Status of Arbitration: Alternative or Exceptional

In general, the Dubai Courts’ take two different approaches to arbitration—treating arbitration as an alternative or as an exception. The first approach recognises arbitration as a valid alternate means to settle disputes among parties based on their will and mutual agreements.^[8] Arbitrators are independent and impartial — traits which are at the very foundation of arbitration^[9] — individuals who are selected by the disputing parties to resolve their dispute in an amicable way outside the parameters of courts.^[10] This approach is reflected in an earlier dicta developed by the Dubai Court of Appeal in Case No. 8/2018 (Jan. 16, 2019):

“…arbitration is the agreement of parties to a specific legal relationship (whether contractual or otherwise) to settle a dispute which has arisen or which may arise between them by referring it to persons selected as arbitrators… As such, arbitration is not an exceptional means of resolving disputes but an alternative means that shall be followed once its conditions are satisfied. Arbitration is a matter of the parties’ intent and giving expression to their intent in a written agreement, whether in the form of a separate agreement or as a clause within a contract.”^[11]    

On the other hand, the Dubai Courts also take the approach that, despite arbitration being a valid option, it is to be used in exceptional circumstances, as opposed to an alternative form of dispute resolution.^[12] Although this approach may seem more restrained, it does not make it any less pro-arbitration as it still permits it, albeit more sparingly. This approach can be observed in a more recent dicta. For example, in Dubai Court of Cassation, Case No. 153/2020 (March 8, 2020), the Dubai Court of Cassation decided:

“The agreement to arbitrate means waiving the right to bring an action before state courts which provides guarantees to litigants. Arbitration is an exceptional method to resolve disputes requiring special permit and clear authorization…”.^[13]

Although this dicta is not determinative in itself, the Dubai Court of Cassation clearly states a new approach that is much more cautious with respect to arbitration, particularly since the right to bring an action before the state is waived. Thus, the attitude of the Dubai Courts towards arbitration in this case and in others provides an important context needed to assess the extent to which the Dubai Courts have embraced the pro-arbitration spirit of the New Arbitration Law.

Arbitrability

The previous language of Article 203.4 of the repealed UAE Arbitration Chapter of the Federal Procedures Law No. (11) of 1992 reads as follows: 

“It shall not be possible to arbitrate in the matters in which the reconciliation is not possible, and it shall not be valid to agree on the arbitration unless by those who have the capacity of disposition in the litigated right.”

In a similar fashion, Article 4 of the New Arbitration Law states:

    “Arbitration is not permitted in matters which do not permit compromise.”

Due to the similarities between the provisions of the repealed law and the new law, courts often make references to the former arbitration provisions of the Federal Procedures Law No. (1) of 1992, although they were repealed by the UAE Federal Arbitration of 2018.^[14]

In accordance with the provisions of these laws, courts have compiled types of  disputes that can be arbitrated.^[15] For example, contractual and injurious acts can be arbitrated.^[16] Other disputes that can be arbitrated include the termination of sale and purchase of land agreements.^[17] Courts have also, however, sought to define certain contracts or disputes which are not arbitrable. These cases include disputes such as commercial agency, labour, and registration with respect to off-plan lands or estates.^[18] For the latter, ordinary courts exercise their jurisdiction.

Electronic Communications

The New Arbitration Law is flexible enough to accommodate the use of technology in conducting arbitration hearings. More specifically, Article 28.2(b) of the law provides that:

“The Arbitral Tribunal may unless otherwise agreed by the Parties:

(b) hold arbitration hearings with the Parties and deliberate by modern   means of communication and electronic technology. The Arbitral Tribunal shall deliver or communicate the minutes of hearing to the Parties.”

As such, arbitration panels can use modern technologies, such as videoconferencing, to hold hearings, deliberations, and cross-examinations of witnesses.^[19] The purpose of the same permitting these kinds of technology is to make the process more accessible to users, less costly, and more efficient.^[20]

The Signing of the Arbitration Award

The signing of an arbitration award is a hotly debated issue in UAE law and jurisprudence. Signature is not a mere formality but can lead to invalidity of an arbitration award.^[21] In other words, if the award is not signed by an arbitrator, or even if some pages of the award are not signed, an arbitration award can be declared invalid. Indeed, the signature requirement is considered as a matter of public policy.^[22] 

According to Article 212.5 of the Old Arbitration Law:      

“The arbitral award shall be made by a majority and shall be given in writing along with any dissenting opinion and shall, in particular, include a copy of the arbitration agreement, a summary of the arguments and documents presented by the parties, the grounds and context of the award, the date and place of issue of the award and the signatures of the arbitrators. Should one or more arbitrators refuse to sign the award, this must be noted in the award; the award shall be valid if signed by a majority of the arbitrators.”

 In a similar fashion, Article 41.3 of the New Arbitration Law states:

“The award shall be signed by the arbitrators and the signatures of the majority of the arbitrators shall suffice, provided that the reason for any omitted signature is stated.”

Although signing an arbitration award is mandatory, the language used in Article 41.3 does not provide guidance and other necessary details that are needed to remove any ambiguities regarding the issue of signing an arbitration award. Questions arise as to the nature of the signature and what parts of the awards should be signed. The decisions made by the Dubai Court of Cassation, however, have helped in providing guidance. For example, according to Dubai Court of Cassation, Case No. 1083/2019 (June 14, 2020):    

There is no need to sign the cover page of the award on the condition that details such as the names and addresses of the parties, seat of the arbitration, and the rules applicable to the arbitration are included in the award.^[23] In addition, the signature on the arbitration award signifies the authentication of both the decision itself and the reasoning.^[24] If the reasoning is contained on a page that is separated from the substantive part of the award, all pages should be signed by the arbitrator.^[25]

Thus, this case and others help provide the necessary context to appropriately comply with arbitration award requirements, although the New Arbitration Law remains vague as to proper signature protocols and procedures.

Conclusion

The UAE is one of the largest countries in the Arab region. Furthermore, Dubai, in particular, plays an important role both regionally and globally. The purpose of this article was to shed light on some of the major amendments advanced by way of the New Arbitration Law of 2018. A number of the decisions made by the Dubai Court of Cassation provide assistance in the interpretation of the new provisions. The underlying theme of these legislative amendments and court decisions is in favour of adopting a flexible approach to arbitration, leaving the option open for when it best suits the circumstances.    

Some of the legislative amendments clarify the scope of application of the New Arbitration Law and reinforce the concept of party autonomy. However, for the most part, court’s decisions have treated arbitration as an exceptional, rather than alternative, form of dispute resolution. Most of these decisions have sought to define the circumstances in which arbitration is appropriate. This is not to say that Dubai has not adopted a pro-arbitration attitude, but merely that it has favored some restraint. Dubai Courts have also embraced the pro-arbitration spirit through decisions concerning matters such as the signature of arbitration awards. In this particular case, the Dubai Court of Cassation helped provide guidance. Thus, the amendments and related court decisions clarify uncertainties as they pertain to the New Arbitration Law and respond to developments.

Since its enactment in 2018, there has been an abundance of emerging jurisprudence on many provisions of the New Arbitration Law. In addition, there seems to be a level of consistency prior to and after the enactment of the New Arbitration Law with respect to how to approach arbitration. The Dubai Court of Cassation has set the standard on how the New Arbitration Law provisions should be interpreted while keeping pace with global standards so as to make Dubai a more arbitration friendly jurisdiction. Considering the legislative changes made by way of the New Arbitration Law coupled with the continuous interpretation by the Dubai Court of Cassation, it is unlikely that there will be another drastic amendment or modification in the near future.

References

^[1]     See Faisal Kutty, The Shari’a Factor in International Commercial Arbitration, 28 Loy. L.A. Int’l & Comp. L. Rev. 565, 573 (2006) 570 (2006).

^[2]     See UAE Federal Arbitration Act, No. 6, Federal Law, 2018 (UAE).

^[3]     See UAE Civil Procedures Code, Articles 203-218, No. 11, Federal Law, 1992 (UAE).

^[4]     See Amer H. AL Qahtani, The Dubai Experience: Evaluating the Effectiveness and Efficiency of International Commercial Arbitration Laws in the Gulf Arab Region, (Nov. 2015) (Ph.D. in Law Dissertation , Macquarie University).

^[5]     See Jayanth K. Krishnan and Harold Koster, An Innovative Matrix for Dispute Resolution: The Dubai World Tribunal and the Global Insolvency crisis, Journal of Dispute Resolution 387, 393 (2016).

^[6]     Dubai Courts mean courts established under Law on the Formation of Courts in the Emirate of Dubai No. 3 of 1992. Thus, Dubai International Financial Centre Courts are excluded from the definition “Dubai Courts”. See Dr. Lothar Ludwig Hardt and Hardt Trading F.Z.E. v. DAMAC (DIFC) Company Limited et al [2009] DIFC CFI 036.

^[7]     Cases were selected that reflect accurately the legal provisions that need to be explained or being contentious. See Mark A. Hall and Ronald F. Wright, Systematic Content Analysis of Judicial Opinions, 96.1 Cal. L. Rev, 63-74 (2006).

^[8]    See Dubai Court of Cassation, Feb. 4, 2020, Case No. 55/2020; and Dubai Court of Cassation, Sep. 23 2020, Case No. 692/2020. In the United States, the Supreme Court over the years has strongly supported arbitration as an alternative dispute resolution mechanism and adopted liberal federal policy favoring arbitration agreements. See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).  

^[9]     See Dubai Court of Cassation, Nov. 25, 2020, Case No. 324/2020; Dubai Court of Cassation, Dec. 9 2020, Case No. 960/2020; Dubai Court of Cassation, Dec.9 2020, Case No. 1037/2020; and Dubai Court of Cassation, Dec.7, 2020, Case No. 36/2020.

^[10]   See Todd B. Carver and Albert A. Vondra, Alternative Dispute Resolution: Why It Doesn’t Work and Why It Does, 72 Harvard Business Review 120 (May-June 1994).

^[11]    See Dubai Court of Appeal, Jan. 16, 2019, Case No. 8/2018.

^[12]   See Dubai Court of Cassation, July 26, 2020, Case No. 567/2020; Dubai Court of Cassation, March 19, 2020, Case No. 5/2020; and Dubai Court of Cassation, June 30. 2019, Case No. 293/2019.

^[13]   See Dubai Court of Cassation, March 8, 2020, Case No. 153/2020.

^[14]   See Dubai Court of Cassation, July 15, 2020, Case No. 492/2020.

^[15]   See Chatura Randeniya and Mevan Bandara, Arbitration Procedures and Practice in the United Arab Emirates: Overview, (May 1, 2021), available at https://uk.practicallaw.thomsonreuters.com/6-502-3220?transitionType=Default&contextData=(sc.Default)&firstPage=true (last visited Aug. 29, 2021).

^[16]   See Dubai Court of Cassation, June 30, 2019, Case No. 293/2019.

^[17]   See Dubai Court of Cassation, October 13, 2020, Case No. 247/2020; Dubai Court of Cassation, July 15, 2020, Case No. 492/2020; and Dubai Court of Cassation, Nov. 24, 2020, Case No. 296/2020.

^[18]   See Dubai Court of Cassation, Feb. 6, 2020, Case No. 55/2020; Dubai Court of Cassation, Mar. 19, 2020, Case No. 5/2020.

^[19]   See Dubai Court of Cassation, Dec. 7, 2020, Case No. 34/2020; and Dubai Court of Cassation, Oct. 13, 2020, Case No. 247/2020.

^[20]   See Antonia Birt and Matei Purice, New Technologies and the UAE Federal Arbitration Law, Kluwer Arbitration Blog (May 24, 2021), available at http://arbitrationblog.kluwerarbitration.com/2021/05/24/new-technologies-and-the-uae-federal-arbitration-law/?print=print (last visited Aug. 29, 2021).

^[21]   See  Matthew Heywood and  Neeva Rice, The Simple Things – Enforcement of Arbitration Awards in the UAE, June 4, 2015, available at http://constructionblog.practicallaw.com/the-simple-things-enforcement-of-arbitration-awards-in-the-uae/, (last visited Aug. 29, 2021).

^[22]   See Gordon Blanke, Your Signature, Please: Recent Developments under Article 41(3) of FAL, Practical Law: Arbitration Blog (August 20, 2020), available at http://arbitrationblog.practicallaw.com/your-signature-please-recent-developments-under-article-413-of-fal/ ),(last visited Aug, 29, 2021).

^[23]   See Dubai Court of Cassation, May 14, 2020, Case No. 51/2020.

^[24]   See Dubai Court of Cassation, Jun. 14, 2020, Case No. 1083/2019.

^[25]   Id.