arbitration

|

April 07, 2016

|

2220 views


| Your comment matters, please click here to rate article!


Legal Principle

Article 215 and 217 of the Civil Procedures Law of the UAE states that a person does not have the right to enter into an arbitration agreement if the signatory does not have the authority to bind the person it is representing through a private power of attorney to sign such a contract to arbitrate.

However, if a party signed on an arbitration agreement without having authorization to do so and the principal who was represented by such signing party later accepted such signature or action taken by the representative, even if at a later date, then such signature shall be valid and the contract shall be considered as effective.

Facts of the case

The claimant in the arbitration proceedings made a request for the appointment of arbitrators to resolve a dispute regarding a partnership agreement between the parties since one of the parties requested to terminate the contract and settle the financial liabilities. As it was agreed by the parties in the partnership agreement that both parties shall resolve any dispute through arbitration proceedings done by 3 arbitrators, the claimant proceeded to appoint his arbitrator and requested the other party to appoint its arbitrator. However, the other party failed/refused to respond to the request put forward by the claimant. As a result the claimant approached the Court to request the appointment of the remaining arbitrators.

The Court of First Instance accordingly appointed a second arbitrator to jointly appoint a third arbitrator along with the arbitrator appointed by the claimant. The respondent in the case at this instant did not approve the court's decision and appealed the judgment of the CFI.

The Court of Appeal dismissed the appeal at which stage the respondent applied to the Court of Cassation to set aside the judgment of the lower courts on the following grounds:

Grounds for Appeal, Objectioner's Point of View

The objectioner contended that the Arbitration clause contained in the partnership agreement is invalid because the person who signed the contract was not duly authorized by him to sign such a contract and to agree to arbitrate.

Court Judgment

The Court observed that although there was no express authorization from the respondent to its representative to accept the arbitration clause in the partnership agreement, the respondent shall be deemed to have accepted the arbitration clause when he later acknowledged the existence of the partnership agreement and accepted its contents. Therefore the Court held that the respondent had provided its implied acceptance to the partnership agreement and its terms including the arbitration clause.

To reach this conclusion the Court relied on a correspondence which was sent from the respondent after the signing of the partnership agreement and before the case was filed. In this correspondence the respondent is quoted as saying, "the contract signed between you (the claimant) and ABC on our behalf...". The Court in its full discretionary power concluded that the usage of such language in the correspondence sent by the respondent is clearly indicating acceptance of the partnership agreement, its validity and its contents in full by the respondent.

Moreover, the Court of Cassation, while passing its judgment also took into account a mistake which was committed by the respondent. The respondent had, in one of its previous submissions, claimed that the issue was referred to arbitration pre-maturely without following the conditions to arbitration contained in the partnership agreement. This submission made by the respondent was seriously considered by the Court to consolidate its decision that the respondent had in fact accepted the partnership agreement and thereby had agreed to be bound by its terms including the arbitration clause.

In this case the Court of Cassation upheld the decisions of the lower courts and passed judgment that the communications exchanged by a party after the signing of a contract shall be sufficient to determine the parties' intent and to conclude whether an implied consent was given to an agreement which was signed by person who was not authorized to do so.

Related Links


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.


Client Testimonials

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.

Raphael Lauria
Manager, FME General Trading

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.

Zhuo Liu
Client

...the extraordinary effort that has been exerted by the staff, and we specially thank Dr. Hassan Mohsen Alhais. Wishing your continues success & excellence...

H.H. Sheikh Saeed Bin
Mohammed Hashir Al Maktoum

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.

Luis Pozueco
Client

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.

Bassam Yamout
Director, JM Metal Trading LCC

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.

Philippe Delbecq
Client

Dr. Hassan Elhais is a responsible, reputable counsel who operates to high levels of service.

Anil Relwani
Manager, Luxury Real Estate

Dr Hassan Elhais is responsive, thorough and creative with his advice, and is a valued advisor and legal consultant.

Asma Mattar
Manager, Italian Style

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.

Dr. Massimo Hakim
Chairman, Italian Style

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.

Manish Gupta
Marketing Manager, Express Digital System

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.

James Horsley
British Client

Comments

No comments found.

Leave a Comment

Your email address will not be published. Required fields are marked *

Want to know more?
Then talk to us.


Main Menu

Contact Me