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( Source of the document: ICC Digital Library )
Salma El Baz, Senior Associate at Rizkana & Partners in Cairo and Dr Jamsheed Peeroo, Barrister at Chambers of A.R.M.A. Peeroo SC GOSK in Port Louis report on discussions on recent developments in Qatar, the UAE and Egypt.
The new Qatari arbitration law, which came into force in April 2017, is largely inspired by the UNCITRAL Model Law. Speed and efficiency are at the heart of the legislation as changes included new time limits and a new appointment process. Arbitral tribunals will, for instance, have to issue their awards within three months even though this time limit may be extended by the courts. Additionally, applications to set aside an award must be filed within a month instead of three months as provided for in the UNCITRAL Model Law. Also of notable interest is the regulation of the good character of appointed arbitrators, who should preferably be selected from a registry maintained by the Ministry of Justice, even though arbitrators can still be selected from other lists or sources provided the good character requirement is met. The new law also interestingly enacted the parties’ right to choose the supervisory jurisdiction between (1) the Qatar Court of Appeal, or (2) the Qatar Financial Centre Civil and Commercial Court of First Instance.
In Case no. 2216/2013, the Qatar Court of First Instance refused the enforcement of an ICC arbitral award as it was not rendered in the name of the Qatari ‘Emir’, which was considered as breach of Article 69 of the Qatari Civil and Commercial Procedural Code and consequently a breach of public order. However, in 2016, the Qatari Court of Cassation overturned the aforementioned ruling stating that: ‘the New York Convention made no mention of an award being attested by authorities and that the conditions of Article IV had been met’.
An amendment to Article 257 of the UAE Penal Code in 2016 provided for the imprisonment of arbitrators found to have breached their ‘duty of objectivity and integrity’. Whilst this amendment initially aimed at preventing partiality and bias in arbitration, it has raised much concern mostly because the exact scope and definition of these duties remain unclear and uncertain. The amendment has been heavily criticized by the legal community and its repeal may be expected.
The Dubai International Financial Centre Court’s decision in Gavin v Gaynor ( DIFC CFI 017) clarifies that even where there is no express agreement on the seat of arbitration, such an agreement may be implied, ‘giving consideration to the Seat with the most connection with the Agreement, the parties, the transaction or any other relevant consideration’. This reinforces the idea that arbitrators and courts should not determine the seat of arbitration arbitrarily but should defer to party autonomy.
The Dubai-DIFC Judicial Committee set up in June 2016 to resolve conflicts of jurisdiction between Dubai Courts and DIFC Courts. In its first decision in December 2016 in Daman Real Capital Partners Company LLC v. Oger Dubai LLC (Cassation No. 1 of 2016), the Judicial Committee appears to have narrowed down the scope of the DIFC’s conduit jurisdiction, which allowed the parties to seek recognition of foreign or domestic arbitral awards before DIFC Courts for enforcement in Dubai. The Judicial Committee held that DIFC Courts should relinquish its recognition and enforcement jurisdiction entirely because setting aside proceedings were pending before the Dubai Courts. Dissenting opinions were expressed by the three DIFC Judges forming part of the Judicial Committee on the ground that DIFC Courts should have exclusive jurisdiction on enforcing awards within the DIFC.
In Brookfield Multiplex Constructions LLC v. (1) DIFC Investments LLC (2) Dubai International Financial Centre Authority ( DIFC CFI 020), the DIFC Court of First Instance refused to grant an anti-suit injunction to restrain proceedings before the non-DIFC Dubai Courts. It however stated that it would have jurisdiction to issue such an injunction ‘even if the seat of the arbitration is non-DIFC Dubai’ but that it would be ‘an unusual and exceptional case where the Court did so, particularly bearing in mind the appropriate respect that the courts of the two different systems in the Emirate of Dubai must have for each other’. The Court further opined that anti-suit injunctions available before the Dubai Courts could be used in support of arbitration seated in the DIFC.
An arbitral tribunal was challenged in an important commercial arbitration taking place in Egypt. One of the parties objected to the arbitration centre’s jurisdiction to decide on the challenge and referred the matter to the courts in accordance to Article 19 of the Egyptian Arbitration Act which states challenges to arbitrators should be referred to the juge d’appui. The challenging party also stated that the process of challenging a tribunal/arbitrator before arbitration centres in Egypt lacked transparency and impartiality as unreasoned decisions rendered by an anonymous committee defies all notions of transparency, right of defence and equality. Finally, the challenge included a claim that Article 19 is a matter of public order and should not be disregarded. This case has re-opened a debate in Egypt as to whether Article 19 of the Egyptian Arbitration Act is of public order. The Court of Appeal has rendered two contradictory decisions in this respect whereby one declared that Article 19 was a matter of public order in 2002 and the other declared the opposite in 2015.
The arbitral award issued in the arbitration between Bassem Youssef and Q-Soft v. CBC was very politicized and the tribunal did not provide any reasoning or justification for the damages awarded to CBC. Accordingly, the award was annulled for failing to provide any reasoning for the awarded damages. During the past year, this award has created a wide debate around a judge’s authority when setting aside an arbitral award, specifically, the judge’s right to review the entirety of the award in question. On 6 January 2016, the Cairo Court of Appeal set aside the arbitral award issued against Bassem Youssef and Q-Soft for lack of sufficient reasoning. Originally, Article 53 of the Egyptian Arbitration Act provided exclusive and limited grounds for setting aside arbitral awards and Egyptian courts have always strictly implemented such Article. It has been established that when setting aside arbitral awards, the court does not have the authority to review the merits of the dispute nor the arbitrator’s discretionary power. Accordingly, Egyptian courts did not consider insufficient, contradictory, or invalid reasoning as valid grounds for setting aside an award. In 2016, the Cairo Court of Appeal however ruled that the court has the authority to carefully review the reasoning indicated in the arbitral award. It added that the reasoning allows the court to ensure that the arbitral proceedings were in compliance with the due process principle. Although the Court of Appeal did stress on the fact that it does not have the authority to review the merits of the case, it concluded that the existence of a flagrant grievance in the reasoning which led to a discrepancy between the reasoning and the outcome of the award is a sufficient ground to set aside an arbitral award under Egyptian Law. The annulment has been appealed and a decision is yet to be made by the Court of Cassation.
On 7 December 2015, a Cairo Court of Appeal issued a decision regarding the annulment of an award issued on 17 December 2014 in the case Golden Pyramids v OCI S.A.E/CCC. In its decision, the Court confirmed the distinction between the seat and the venue of arbitration.
The seat of arbitration is the basis of establishing a number of legal relationships between the arbitration process in question and the procedural order/legal regime governing the seat. The arbitral award is always considered rendered at the seat of arbitration, not the geographic location where the arbitral hearings have been held; and
If the arbitral tribunal decided to render its award in a place other than the seat of arbitration, this is considered a change in location or venue only, and not of the seat of arbitration agreed upon by the parties. The courts of the seat remain solely competent to decide over matters related to the validity or annulment of the arbitral award.