Out of danger, are they really? The article by Criminal Lawyers in Dubai will discuss the "not so much" liability of arbitrators in UAE in accordance with the recent amendment in the laws pertaining to arbitration.
Why should we study arbitrator's liability? Simply because the authenticity of international arbitration is highly questionable and is facing a reputational crisis. Yet, the laws imposing criminal penalties on arbitrators have been eradicated which is the topic of discussion of this article.
UAE has recently promulgated a decree which halted the long drawn controversy regarding the criminal liabilities of arbitrators and experts which emerges from their irrational behaviour or duties inconsistent with the laws of the Arbitration Centre or from their unbiased nature. His Highness Sheikh Khalifa Bin Zayed Al Nahyan issued Federal Decree Number 24 of 2018 (the Decree) on 23 September 2018. The Decree amended several provisions of Federal Law Number 3 of 1987, the UAE Penal Code wherein Article 257 which forms the basis of this article.
The shift in the Law
Article 257 of the Penal Code was very much a concern for arbitrators concerning the imposition of criminal liability on those who fail to perform their duty impartially. However, the risk of penalties was low, yet it worked as a deterrent for arbitrators, and they may be unwilling to take up new matters which might cause breach for which they are not aware of.
Article 257 (The History)
"Any individual who issues a request depicts a supposition, gives a report, displays a case or demonstrates an incident for or against an individual, in repudiation to the requirement of biases and trustworthiness, while acting in his ability as a mediator, expert, interpreter or fact discoverer designated by a regulatory or judicial authority or chosen by the parties, will be punished by brief detainment.
The aforementioned classes of people will be banned from assuming the responsibilities which they were entrusted in the first instance, shall be liable under Article 255 of this law."
Article 257 (The Present)
"Any individual who, while acting in the limit of an expert, translator or examiner chosen by a judicial authority in any civil or criminal case, or delegated by an authoritative expert, affirms an issue in opposition to what is valid and distorts that issue while knowing reality about it, will be condemned to detainment for a minimum term of a year and a maximum term of five years. The punishment ought to be brief detainment if the referenced people were allocated to order in connection to a felony."
The amendment issued by the legislator clarifies the application of Article 257 on a specific category of the individual which earlier was applicable to anyone issuing a decision. As of now, it is only applicable to any person acting the capacity of an expert, translator or investigator appointed by judicial authority, thereby removing arbitrators from the purview.
Another significant amendment which can be witnessed in the Decree is the Article 236 which now makes arbitrators and experts are public employees for the purpose of new Article 234 and 237, which provides for the criminal liability of the public employees or employees of the international organization.
We believe the new amendment is the positive step in the right direction and is a welcoming change towards deposing confidence in the arbitration proceedings within UAE. Nevertheless, we wait for more clarity in terms of interpretation and application of Article 236.
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