Written by Dr. Hassan Elhais The UAE has rapidly emerged as a leading financial centre, attracting large global investors and businesses. As international developers and contractors continue to invest in construction projects, there has been an increasing trend in the use of arbitration in Dubai. The arbitration process is the preferred method to resolve disputes by commercial companies. As the certified language of arbitration proceedings is in English, a specialist tribunal can be appointed as opposed to the more broad UAE courts, and arbitration is generally more cost-effective and less time-consuming. This has led businesses and investors in the UAE to ensure that arbitration clauses or agreements are inserted into their contracts. Furthermore, the downturn in economic conditions in the real estate market over the past few years has led to an increase in disputes in general, and parties are more likely to issue court proceedings than to try to recover their losses through other ventures.
Arbitration proceedings in the UAE are governed by Articles 203 to 218 of Federal Law No. 11 of 1992 as amended (the Law of Civil Procedure or the Civil Procedure Code (‘CPC’).
Federal Law No. 11 of 1992, the UAE Civil Procedure Code is the main statute governing arbitration in the UAE, Article 203 provides that:
1. The parties to a contract may state in the contract or by a supplementary agreement that any dispute arising between them in respect of the performance of a particular contract shall be referred to one or more arbitrators and may also agree to refer certain disputes to arbitration under special conditions.
2. No agreement for arbitration shall be valid unless evidenced in writing.
3. The subject of the dispute shall be specified in the Terms of Reference, or during the hearing of the case, even if the arbitrators were authorised to act as amiable compositors; otherwise the arbitration shall be void.
4. Arbitration is not allowed in matters which are not capable of being reconciled. An arbitration agreement can only be made by the parties who are legally entitled to dispose of the disputed right.
5. If the parties to a dispute agree to refer the dispute to arbitration, no court case may be filed before the courts. However, if one of the parties files a case, irrespective of the arbitration provision, and the other party does not object to such filing at the first hearing, the case may be considered, and in such instance the arbitration provision shall be deemed cancelled.
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 New York
The United Arab Emirates joined the New York Convention in 2006, this provided great support to arbitration within the UAE, because it makes the implementation of the International Arbitration Awards easier in the UAE. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 New York Convention states that:
Article 11.1:
Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
Article 11.3: the court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this Article, shall at the request of one party, refer the parties to arbitration.
Arbitration Law DIFC Law No. 1 of 2008
The DIFC is a separate jurisdiction under the UAE Constitution and has its own independent, common law jurisdiction over all civil and commercial disputes within the DIFC financial district. DIFC Law No. 1 of 2008 states that:
Article 12(1) – Definition and Form of Arbitration Agreement
….an agreement by the parties to submit to Arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
Article 13(1)
If an action is brought before the DIFC Court in a matter which is the subject of an Arbitration Agreement, the DIFC Court shall, if a party so requests…dismiss or stay such action.
Copyright © of this article is retained by the author and/or other copyright owners. We explicitly grant you permission to download a copy, without any alteration, of this article for personal non-commercial research or study, without prior permission or any charge. This article can be utilized on your website or for marketing, however, we grant you permission to host this article on your website and no other rights. This content should not be altered in any way or sold commercially in any format without prior permission of the copyright holder. During reference of this article, full biographic details entailing the name of the author, his designation, the institute and the publishing date of the article shall be provided.
Your email address will not be published. Required fields are marked *
I owe the success of my case to Dr. Hassan's diligent approach. He remained focused, put me at ease and always went the extra mile. Dr. Hassan tirelessly put my case in the best possible light and I cannot thank him enough. I would highly recommend Dr. Hassan - I am grateful to him from the bottom of my heart.
Dr. Hassan Elhais is among the best legal consultants I have ever worked with. He has an amazing ability to reduce complex issues into a simple concept that non-legal people can understand. He consistently develops innovative litigation strategies that help us to achieve our ultimate legal goals.
...the extraordinary effort that has been exerted by the staff, and we specially thank Dr. Hassan Mohsen Alhais. Wishing your continues success & excellence...
I believe everyone should recognize what a difference Dr. Hassan Elhais work has made to people's lives; and especially to our family's life, because we will remain forever grateful to each and every one of his team.
Dr. Hassan Elhais never fears cases that involve exposure and he always gives me his honest assessment of our chances of success, which is invaluable to me.
He aided us not only in providing legal advice but also in all legal issues that required a long term strategic approach to achieve most favorable and optimum outcomes he provided us with high level of professional service.
Dr. Hassan Elhais is a responsible, reputable counsel who operates to high levels of service.
Dr Hassan Elhais is responsive, thorough and creative with his advice, and is a valued advisor and legal consultant.
Regardless of the complexity of the matter I know Dr. Hassan Elhais will consider not only legal strategy but also business practicalities in providing advice and litigation options.
I recommend Dr. Hassan Elhais to anyone who says 'I'm in legal trouble'. I was extremely satisfied with the high standard of his work. He has always been there when I have needed him and I refer all my clients, family and friends to him/his firm.
Dr. Hassan Elhais was very professional and he listened to my needs. He was very prompt, efficient and always kept me informed. Dr. Hassan Elhais's service was excellent and I would definitely recommend him to friends and colleagues.
Contact Me
