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September 28, 2021
An arbitration proceeding is similar to traditional court litigation in many ways. However, it has many advantages to offer in comparison to traditional litigation. An Arbitration procedure is private and confidential and, in many ways, faster and less expensive when compared to traditional litigation channels. For these advantages, companies often prefer to choose arbitration proceedings for dispute resolution and ensure that an arbitration clause is pre-agreed between the parties on commercial contracts.
Increasing reliance on arbitration proceedings is also considering the reliable enforcement options for an arbitral award in numerous international jurisdictions. This is due to the international treaty of the New York Convention on the ‘Recognition and Enforcement of Foreign Arbitral Awards of 1958’ (‘New York Convention’), which was entered into force on 7 June 1959, allowing arbitration awards to be enforced internationally in various jurisdictions. Around one hundred and fifty countries have ratified the New York Convention, which constitutes more than three-quarters of the world countries. The New York convention requires that the signatory states (contracting states) ensure recognition and enforcement of the arbitration award made in other contracting states, thus, paving way for international arbitration process and its recognition. The United Arab Emirates is a signatory to the New York Convention, and adopted the said treaty by enacting the Federal law decree no. 43 of 2006 on ‘The United Arab Emirates Joining the Convention of New York on Recognition and Enforcement of Foreign Arbitral Awards’.
Enforcement of arbitration award in the UAE:
The Federal Law No. (6) of 2018 on ‘Arbitration’ and its amendments (Arbitration law) constitute the arbitration law in the UAE. Article 3 of the Arbitration law describes arbitration as ‘international arbitration’ if any of the parties at the time of conclusion of the arbitration agreement have their place of business in two or more different states, or if a subject matter of the arbitration dispute is connected to different statesetc.
Article 55 of the Arbitration Law states the procedures and requirements for enforcing an arbitral award as follows:
Enforcement of Award Article (55):
(a) The original award or a certified copy thereof.
(b) A copy of the Arbitration Agreement.
(c) An Arabic translation of the arbitral award, attested by a competent authority, if the award is not issued in Arabic.
(d) A copy of the minutes of deposit of the award in Court.
One of the major new developments introduced by the arbitration law is allowing for easy and simpler enforcement proceedings. Enforcement of an arbitral award can now be commenced before the court of appeal by filing for ratification and enforcement of the award. 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 UAE Arbitration law is modelled on the UNCITRAL (United Nations Commission on International Trade Law) model code which represents the international best practices. The adoption of this law in the UAE signifies the country’s commitment to become an advanced arbitration-friendly jurisdiction.