Headnote

Arbitration – Waiver of right to appeal

Summary of facts

An action was brought by the Respondents before the Dubai Court of First Instance, requesting the enforcement of an arbitration award rendered on 3 October 1992, which bound the First Petitioner to a payment of AED 2,435,458.

The Petitioners brought an action requesting the nullification of the arbitration award. The Petitioners argued that the arbitration award was null and void, since the First Petitioner appeared only in a personal capacity and the Second Petitioner, a company with separate legal personality that was the subject of the dispute, had not appeared in the proceedings at all. The Court rejected the request for nullification, and its judgment was upheld by the Court of Appeal and became final after the Court of Cassation rejected the petition to cassation.

Thereafter, the Respondents requested the ratification of the award, which the Court accepted. The Petitioners brought a case on 13 November 1995 against the Respondents’ request for ratification, which was dismissed. Thereafter, the Petitioners filed an appeal against the judgment, which was also dismissed. The Petitioners then filed a petition to cassation requesting the judgment of the Court of Appeal to be reversed on the grounds that an arbitral decision is final where the parties have agreed that the arbitrators’ decision will be final in the arbitration agreement and the award falls within the scope of the arbitrators’ powers. The Respondents submitted their defence, but it was put aside as it was delivered after the set timeframe under the law.

Held

The judgment of the Court of Appeal was reversed.

Article 217 of the Civil Procedure Code provides that arbitration awards are not subject to any means of appeal and are binding. However, a judgment ratifying or nullifying an arbitration award properly made by an authorized arbitrator may be appealed, save when the parties have expressly waived the right to appeal or if the amount of the dispute does not exceed AED 10,000.

Judgment

The Petitioners argue that the challenged judgment constitutes a violation and misapplication of the law and a deficiency in reasoning, since the Court of Appeal based its judgment on the idea that the judgment of the Court of First Instance that endorsed the arbitration award is not appealable as long as the parties agreed in the arbitration deed that the arbitrator’s decision is final and not appealable and as long as the award issued by the arbitrator is within the scope of the duties assigned by the arbitration deed.

Article 217 of the Civil Procedure Code provides that arbitration awards are not subject to any means of appeal and are binding. However, a judgment ratifying or nullifying an arbitration award properly made by an authorized arbitrator may be appealed, save when the parties have expressly waived the right to appeal or if the amount of the dispute does not exceed AED 10,000.

Therefore, the Court of Appeal failed to verify whether the parties agreed to waive their right to appeal a decision nullifying or ratifying an award. A mere agreement mentioned in arbitration deed or arbitration agreement upon authorizing an arbitrator for reconciliation shall not be adequate for considering the award rendered thereby as a final award without being restricted by the pleading procedures.

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The waiver of the right to appeal mentioned in Article 217.3 – by which the appeal shall be dismissed – shall mean the explicit waiver of the right to appeal a judgment ratifying or annulling an arbitration award and not the waiver of the right to appeal the arbitration award itself, as the arbitration award shall not be subject to any means of appeal.

The Court of Appeal should have reviewed the challenges to the representation and capacity of the Respondents. The challenged judgment constituted a violation of the law and is reversed, without the need to consider the remaining grounds of the challenge.

Accordingly, the judgment of the Court of Appeal is reversed.