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Federal Govt Urged to Act on Arbitration Law

“There was a unanimous call by all the participants on Monday that UAE needs to have a federal arbitration law, based on the New York Convention,” Al Tamimi told Khaleej Times in an exclusive interview after the International Arbitration Day conference in Dubai.

He said almost all the top arbitrators from across the world were present at the conference which applauded the UAE’s progress in terms of arbitration law and the infrastructure available for foreign companies willing to use that option.

International arbitration is an established method for resolving disputes between parties to international commercial agreements. As with arbitration generally, it is part of a contract, i.e., the parties’ decision to submit any disputes to private adjudication by one or more arbitrators appointed in accordance with rules the parties themselves have agreed to adopt, usually by including a provision for the same in their contract. The practice of international arbitration has developed so as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their underlying legal systems.

The New York Convention refers to the United Nations Commission on International Trade Law (UNCITRAL), which has a mandate from the General Assembly to further the progressive harmonisation and unification of the law of international trade. The Commission has since come to be the core legal body of the UN system in the field of international trade law.

Dubai is the only emirate in the country where two arbitration courts – Dubai International Arbitration Centre (DIAC) and the Dubai International Financial Centre (DIFC) Arbitration Centre in a joint venture with the London Court of international Arbitration (LCIA) – provide arbitration services in accordance with international standards. Abu Dhabi has an arbitration centre, but Al Tamimi said it was far from matching the DIAC or DIFC standards. Al Tamimi said in the absence of a federal law, a foreign company might not be able to enforce a decision by any of the arbitration centers in Dubai or Abu Dhabi in the northern emirates.

“The only missing leg in the progress UAE has made in terms of arbitration is that it needs to have a federal law based on the UNCITRAL modern law,” he said. The emirates can set up their own arbitration centers but the law has to come from the federal government, he said. “With the federal law in place, UAE will become the center of arbitration in the Middle East,” he said.

Al Tamimi said the DIFC Arbitration Centre works under the jurisdiction of the DIFC Courts which is a common law court, while the DIAC comes under the Dubai Court which is a civil court.

“So it’s up to the foreign companies or clients to choose which law they would want to follow in case of arbitration. That can be included in any contract,” he said.

He said both arbitration centres provide the same services to the international community and they compete with each other which makes services better.

ovais@khaleejtimes.com