Headnote

Arbitration – Jurisdiction

Summary of facts

The Petitioner asked the Court of First Instance to block the Rental Committee’s ratification of an arbitral award on the grounds that the Rental Committee did not have the power to do so. The facts of the case are that the Respondent entered into an agreement with the Petitioner for the lease of a racetrack in Dubai for a period of one year for a monthly rent of AED 8,500. The Respondent terminated the agreement six months after entering into the agreement. A dispute arose between the parties in relation to the total amount of rent outstanding. As per the provisions of the lease, the dispute was referred to arbitration under the rules of the Dubai Chamber of Industry and Commerce. An award was rendered by a sole arbitrator in favour of the Respondent. The award was ratified by the Rental Committee. The Court of First Instance held that the Rental Committee had jurisdiction over rental disputes and therefore had the power to ratify arbitral awards concerning such disputes. The Petitioner appealed the judgment, but the Court of Appeal ultimately endorsed the Court of First Instance’s decision. The matter was referred to the Court of Cassation.

Held

The appeal was dismissed.

Under Article 213 of the Civil Procedure Code, the Court that has jurisdiction over the subject matter of a dispute shall be competent to ratify arbitral awards. Furthermore, according to Article 1 of Decree No. 2 of 1993 establishing the Rental Committee (the “Decree”), the Rental Committee has sole jurisdiction over “all kinds of disputes between tenants and landlords”. It is in effect a judicial body separate from the courts, and its rulings have the same enforceability as court judgments. Article 4 of the Decree explicitly states that decisions of the Rental Committee cannot be set aside by the courts. Therefore ordinary courts do not have jurisdiction over the ratification of arbitration awards concerning rental disputes.

Judgment

Article 1 of Decree No. 2 of 1993 establishing an ad hoc judicial committee to hear any kind of dispute between tenants and landlords states that “an ad hoc juridical committee, which is called the Rental Committee, shall be formed and shall have solely jurisdiction over all kinds of disputes between tenants and landlords…”. Article 4 of Decree No. 2 provides that “the judgment passed by the Committee shall be final and unchallengeable”. As confirmed by the Court, this provision indicates that the Rental Committee is an administrative authority by virtue of its formation; however, it was given certain judicial powers by the legislator to settle disputes between landlords and tenants.

This Committee is thus deemed to be a judicial body that is completely independent from the ordinary judicial authorities. Its decisions have the same enforceability as judicial judgments and may not be challenged before ordinary courts, as explicitly established by Article 4 of the Decree. Article 213 of the Civil Procedure Code provides that the court that has jurisdiction over the subject matter of a dispute shall be competent to ratify arbitration awards. In the present case, the dispute between the litigants is grounded in the provisions regulating the rental relationship in accordance with the rules set forth in the Civil Transactions Law. Therefore the Rental Committee shall be solely competent to decide on such a dispute through judicial proceedings or arbitration. It shall also have jurisdiction to ratify arbitration awards relating to rental disputes.

Accordingly, the petition to cassation is dismissed.