As the readers are aware, the UAE is one of the last countries in the AGCC region not only to ratify the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 19581 (the New York Convention), but also to promulgate a standalone arbitration law adopting the UNCITRAL Model Law on arbitration. Prior to the recent promulgation of UAE Federal Law No. 6 of 2018 on Arbitration,2arbitration was governed by a brief chapter in the UAE Civil Procedures Code3 comprising a limited number of sixteen articles that provided for the major principles of arbitration, with limited guidance on arbitration procedure.

In spite of the challenges faced in arbitration, arbitration witnessed steady growth in the last two decades with the UAE becoming the most preferred seat of arbitration, attracting major international legal firms involved in arbitration, as well as reputed international arbitration practitioners from different parts of the world. During this period, UAE Court rulings have played a major role to fill the legal vacuum.

Since Arabic is the official language of the UAE, all of these rulings were issued in the Arabic language. Therefore, there was a pressing need to provide the arbitration community a fair translation of the major rulings (as quite often, the translation available in the market is not of sufficient assistance) issued by the UAE Courts: the Federal Union Supreme Court, Dubai Supreme Court and Abu Dhabi Court of Cassation, having a significant impact on arbitration, to serve as a practical guidance to the international arbitration community. To this end, the first work published by the ICC-UAE was in 2013, dealing with these Court rulings, followed by a second publication in 2017, updating the arbitration community on the most recent rulings of the UAE Courts.

In 2017, the newly elected Steering Committee of the ICC-UAE Commission on Arbitration and ADR took a different approach by inviting four reputed arbitration practitioners to provide an overview of the various aspects of arbitration by commenting on the relevant Court rulings issued in the previous years as well as the recent ones. A taskforce was formed to spearhead this publication.

As the taskforce was about to produce the work and sent it to publication, the new arbitration law was promulgated, a law that has been long awaited by the community. Therefore, the taskforce decided to hold off publishing the work to allow the authors to consider the provisions of the newly promulgated arbitration law that has reshaped the arbitration landscape in the country and to shed light on it. Therefore, the taskforce invited Mr Philip Punwar to author the first chapter providing an overview of the new arbitration law.

Before the promulgation of the new arbitration law, the litigants, in an attempt to avoid the challenges arising from not having a standalone arbitration law, commenced using the courts of the Dubai International Financial Center (DIFC), which is a financial free zone having its own jurisdiction. The DIFC Courts operate on the common law model and English is the official language. Even prior to the promulgation of the new arbitration law, the DIFC had already adopted the UNCITRAL Model Law.4Based on all of these factors, litigants used the DIFC Court as a conduit court to efficiently secure an order for recognition of an international arbitration award and then have it executed through the onshore Dubai Court as well as the other emirates pursuant to the relevant laws, and the protocol signed by concerned judicial authorities in this regard.

With the promulgation of the new arbitration law, that is based on the UNCITRAL Model Law and also introduces several provisions on the process of ratification & enforcement and annulment of an arbitral award, a significant degree of efficiency has been brought to the UAE legal system on arbitration. As per the early feedback of litigants on the implementation of this law, especially in terms of ratifying arbitral awards, the role of the DIFC Court as a conduit court has diminished to a great extent.

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This publication comprises five chapters:

a) The first chapter authored by Mr Philip Punwar provides an overview of the entire law and succinctly summarizes and consolidates the comments of each of the authors in the previous chapters that will assist the readers in understanding the overall mechanics of the new law and identified the areas where certain uncertainties remain. Mr Punwar has provided his insight on the salient points of the law, especially on how the new law has rendered the arbitration process in UAE more efficient by adopting the UNCITRAL Model Law and the areas where the law has diverged from the UNCITRAL Model Law.

b) The second chapter authored by Mr Hassan Arab deals with the arbitration agreement by focusing on the approach of the UAE legal system on arbitration agreements pursuant to which arbitration is considered as an exceptional venue for dispute resolution. Mr Hassan Arab has explained the strict approach adopted by the UAE Courts in interpreting arbitration agreements and, in doing so, he has provided a brief background on the situation before the promulgation of the new arbitration law and has also opined on extent to which this situation has been changed by the promulgation of the new arbitration law.

c) The third chapter authored by Mr Alain Farhad deals with the conduct of arbitration from the commencement of the arbitration proceedings up to the issuance of the final award under the new law. In doing so, Mr Farhad has shed light on the various practices developed in the UAE based on Court rulings, some of which have now been rendered redundant while others have been codified, which will give assurance to the parties and put an end to many uncertainties previously surrounding arbitration proceedings.

d) The fourth chapter authored by Mr Mahmood Hussain deals with the approach of the UAE legal system on public order and its role in arbitration. It is well-known in almost all legal system worldwide that the court may not ratify a national arbitral award if the award is viewed as against public order in that particular jurisdiction and on the same level, it will decline to recognize an international arbitral award for the same reason. This is clearly reflected in Article 5(2) (b) of the New York Convention. However, it remains to be seen how the UAE Courts will deal with this issue due to the specific feature of the UAE legal system, which is primarily adopting the civil law model where Shari’a principles play a major role especially when it comes to the issue of the public order.

e) The fifth chapter authored by Mr Gordon Blanke deals with the most significant changes brought by the new arbitration law on arbitration in UAE, more precisely, the procedure for ratification of arbitral awards paving the road to its enforcement, and for annulling arbitral awards that was previously handled by one court and took the form of a full-fledged trial. Mr Blanke also provides his insight on the one of the key objectives of the new law, which is to make arbitration more efficient. He has also demonstrated how the Court rulings issued over the last more than two decades remain of great relevance, as the grounds for annulment of an arbitral award set out in the new law are almost identical to those mentioned in the previous law (constituted by a chapter in the UAE Civil Procedures Code).

Finally, in its upcoming publication, the ICC-UAE is planning to focus on the Court rulings issued after the promulgation of the new law, especially those dealing with the new mechanism introduced by the law to give efficiency to arbitration proceedings that reflect the UAE’s commitment, being a preferred venue for dispute resolution, to promote arbitration being a country with a multi-culture environment that hosts business communities from all around the world. The new law definitely reflects the country’s policy to boost arbitration and make it more efficient by adopting the UNCITRAL Model Law.

NOTES

1
UAE Presidential Decree No. 43 of 2006 ratifying the New York Convention.

2
That came in force one month after its publication in the official gazette.

3
Federal Law No. 11 of 1992.

4
DIFC Law No. 1 of 2008 on Arbitration.

5
Additionally, the Judicial Tribunal, created by the Dubai Emirate to decide on conflicts of jurisdiction between the DIFC Court and the Dubai onshore Courts, in its recent ruling in favour of the Dubai Courts’ jurisdiction, has contributed in diminishing the DIFC Court role as a conduit court.