Arbitration Article Series III Terms of References

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September 24, 2013

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Parties wanting to enforce an award under the New York Convention must satisfy the requirements of the UAE Civil Code. In practice, enforcing arbitration awards can be a lengthy and unpredictable process. It is common for the UAE courts to require the foreign award to satisfy the rules and procedures of the UAE, and they may refuse to enforce it if there is a violation of local laws. One potential difficulty arises in convincing the UAE court that it did not have jurisdiction to hear the dispute in the first place (irrespective of the arbitration agreement between the parties). The UAE courts normally have a fairly broad jurisdiction over disputes including, for example, claims connected to money or assets within the UAE and claims arising out of contracts executed or to be performed in the UAE, as well as claims over foreigners who are resident in the UAE. Therefore, it is difficult to prove that the UAE court did not have jurisdiction over the order.

Another recent development in the UAE has been the establishment of the LCIA-Dubai International Financial Centre (DIFC) Arbitration Centre, and the DIFC Law No. 1 of 2008 (DIFC Arbitral Law) based on the UNCITRAL Model Arbitration Law. The DIFC-LCIA Arbitration Centre is a partnership between two institutions, the relatively new Dubai International Financial Centre (established in 2004) and the long-established London Court of International Arbitration (which originated in 1883). The partnership ensures the promotion of the effective resolution of international business disputes through arbitration and mediation. Furthermore, the UNCITRAL Arbitration Rules provide a broad set of procedural regulations which parties may agree to use for the arbitration proceedings arising out of their commercial dispute. The rules cover all areas of the arbitration process, providing a model arbitration clause, setting out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings, and establishing rules in relation to the form, effect and interpretation of the award.

The DIFC is a financial free zone which is exempt from UAE federal commercial and civil laws, and provides Dubai with a recognized arbitration institution. Any award issued by the DIFC is a New York Convention Award. Article 42 of the DIFC Arbitration Law provides for recognition and enforcement of arbitration awards, and Article 44 sets out limited grounds on which recognition or enforcement of an award can be refused by the DIFC Court for example where:

  • Either party was under some incapacity or that the arbitration agreement was invalid.
  • The party against whom the award is being invoked was unable to present its case.
  • The arbitrator exceeded its jurisdiction.
  • Composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the law of the State or jurisdiction where the arbitration took place.
  • The award has not yet become binding on the parties or has been set aside or suspended by a Court of the State or jurisdiction in which the award was made.

The special rules of immediate enforcement shall apply to arbitration awards.

The arbitrators' award shall be issued within the United Arab Emirates; otherwise, the rules applicable to arbitration awards passed in foreign countries shall apply instead.

The arbitrators' award shall be passed by a majority and shall be made in writing and accompanied by the dissenting vote. In particular, the award shall contain a copy of the arbitration agreement, a summary of the statements of the parties, their documents, the grounds and context of the award, the date and place of issue and the signatures of the arbitrators. Should one or more arbitrators refuse to sign the award, such refusal shall be stated in the award; provided, however, that the award shall be valid if signed by a majority of the arbitrators.

Unless otherwise agreed between the parties to the dispute, the award shall be in the Arabic language, it must then be attached with its official translation when filing it.

The award is considered issued from the date it is signed by the arbitrators

Administration process after the Award is issued

Under Article 213 when arbitration is conducted through the court, the arbitrators shall, within 15 days after the issue of their award, file in the court; the award with the original Terms of Reference, minutes of sessions and documents. They will also file with the court a copy of the award to be delivered to each of the parties, so a hearing may be arranged within 15 days for the purpose of approving the award. The parties of the dispute shall be notified of the date fixed for the hearing.

Where the arbitration is conducted in connection with an appeal case, the filing shall be made with the court, which has jurisdiction to consider the appeal. In addition, where arbitration is conducted between the parties to a dispute outside the court, the arbitrators must provide each party with a copy of their award within 15 days from the date of the issue of the arbitration award. The court shall, at the request of one of the parties filed within the normal course of filing the case, consider whether the award shall be approved or nullified.

When can the award be remitted back to the Arbitrators?

Under Article 214, when considering the request for approving the arbitrators' award, the court may refer the award back to the arbitrators to reconsider any issues which they have omitted, or to clarify the award if it was not specific to the extent that the enforcement of the same is not possible.

Approval of the award by the court

Under Article 215, the arbitrators' award may not be enforced unless the same has been approved by the court in which the award was filed; provided that the court has reviewed the award and the Terms of Reference and ensured that there is no encumbrance to such enforcement. The court shall, at the request of one of the parties concerned, correct any material errors in the arbitrator’s award in accordance with the legal provisions. The Execution Judge has the jurisdiction to all the matters related to the execution of the arbitrators’ awards.

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