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Arbitration in the UAE: A Practical Guide

Over time, arbitration has emerged as one of the most sought-after methods of resolving disputes across the globe, particularly in the commercial and construction sectors. The UAE assumes a unique position among the greatest powers in arbitration in the Middle East, the core reason being its strategic location and active economy. This guide considers the legal framework, along with the main institutions and practical tips for running an arbitration in the UAE.

Legal Framework:

  • The UAE Federal Arbitration Law (Federal Law No. 6 of 2018): Modernized the UAE's legislative framework to align with global best practices, largely adopting the principles of the United Nations Commission on International Trade Law ("UNCITRAL") Model Law on International Commercial Arbitration. It applies to all arbitrations conducted in the UAE, except those within the DIFC and ADGM.
  • DIFC Arbitration Law (DIFC Law No. 1 of 2008): Modeled on the English Arbitration Act 1996 and the UNCITRAL Model Law, this law serves as the statutory framework for all arbitration in the DIFC—an autonomous jurisdiction with its independent legal system and courts.
  • ADGM Arbitration Regulations 2015: Based on the UNCITRAL Model Law and the English Arbitration Act 1996, these regulations apply to arbitrations within the Abu Dhabi Global Market, another free zone in the UAE.

Arbitration Institutions:

  • Dubai International Arbitration Centre (DIAC): Administers a substantial number of commercial disputes globally, given Dubai's role as a major commercial and industrial hub.
  • Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC): Manages commercial disputes and provides flexible procedures for handling cases efficiently.
  • DIFC-LCIA Arbitration Centre: A joint venture between the DIFC and the London Court of International Arbitration, offering facilities for arbitration in the DIFC.
  • Sharjah International Commercial Arbitration Centre (Tahkeem): Manages both domestic and international disputes in Sharjah.

Some Key Provisions of Arbitration in the UAE:

  • Party Autonomy: UAE laws grant parties maximum freedom in determining arbitral procedure, including the appointment of arbitrators, the place, and manner of conducting proceedings.
  • Confidentiality: Most arbitration proceedings are private, ensuring that disputes and party identities remain confidential.
  • Enforcement of Awards: As a signatory to the New York Convention, the UAE ensures the international enforcement of arbitral awards.
  • Judicial Assistance: UAE courts assist in the arbitration process by helping with the appointment of arbitrators and granting interim measures while maintaining non-intervention principles.
  • Interim Measures: Arbitral tribunals and UAE courts can provide interim measures to protect parties' rights and businesses during the arbitration process.

Practical Considerations:

  • The Appropriate Arbitration Institution: Choose an arbitration institution based on the complexity of the dispute, business sector, and the institution's rules, facilities, and reputation.
  • Drafting the Arbitration Clauses: Ensure arbitration clauses are clear and precise, covering the place of arbitration, agreed-upon rules, and number of arbitrators.
  • Cultural and Legal Dynamics: Observe cultural and legal sensitivities in the UAE, and consider consulting local experts to enhance success.
Conclusion
In sum, arbitration in the country is a trustworthy and efficient way of resolving commercial disputes. The supporting legal framework, including a very supportive judiciary, helps in carrying out the task with much professionalism. Strategic geographical location and state-of-the-art arbitration laws make the UAE one of the leading arbitration destinations in the Middle East. The legal infrastructure outlined as above, with practical tips, will assist parties in being able to move smoothly through the process of arbitration to a successful resolution.

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