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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Arbitration – Grounds for annulment of award – Taking of oath
The Petitioner initiated the action before the Dubai Court of First Instance requesting the Court to ratify the award rendered under the auspices of the Dubai Chamber of Commerce and Industry on 20 February 2002, as well as to amend a material error in the award. The Petitioner indicated that, on 30 March 1993, it entered into an agreement with the Respondent whereby the latter was under an obligation to develop a world-class park as well as a commercial and residential area in Dubai. After the Petitioner had finished the design but before it had commenced the execution of the project, the Respondent terminated the agreement. Arbitration was commenced after the parties failed to reach an amicable settlement regarding payment for the services rendered by the Petitioner. On 20 February 2002, the arbitrator rendered an award ordering the Respondent to pay the Petitioner damages and interest on the amount of the damages until they have been paid in full.
The Attorney General, in his capacity as a representative of the Respondent, requested the invalidation of the award indicating that it was invalid for several reasons, including the fact that the arbitrator:
The Court annulled the award, at which point the Petitioner appealed the judgment before the Court of Appeal, which dismissed the appeal. The Petitioner then further challenged the judgment by submitting a petition to cassation, and the Respondent requested the dismissal of the petition to cassation.
The petition to cassation was dismissed.
Arbitrators shall require witnesses to take the oath before they provide their testimonies, regardless of whether or not such a procedure is requested by the disputing parties. If this procedure is violated, according to Article 211 of the Civil Procedure Code, the award is null and void. This applies even if the interested party waives its right before and after the award is given.
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The Petitioner argued that the challenged judgment involved a breach and a misapplication of the law, as well as defective causation and breach of the right to defence. The Petitioner further indicated that Article 41 of the Evidence Law concerning civil and commercial transactions and Article 211 of the Civil Procedure Code do not provide that the testimony of a witness will be invalid if given without taking the oath. According to Article 13 of the Civil Procedure Code, the procedure shall not be deemed invalid, unless it is explicitly stipulated by law or if an essential default or defect exists precluding the attainment of the purpose for which the procedure is undertaken. The Petitioner argued that the arbitrator is exempt from the procedural rules, save those enumerated under the arbitration chapter of the Civil Procedure Code, and that the imperative form of the law does not necessarily mean that invalidity is the inevitable result of any breach of such procedures. The Petitioner contended that the wording of the oath taken by the witnesses was agreed upon between the Petitioner and the Respondent. Furthermore, the Petitioner indicated that the Respondent did not object to the wording of the oath taken by witnesses during the arbitration proceedings and did not request that they take the oath in the wording prescribed under Article 41 of the Evidence Law. The Petitioner concluded that the Respondent accepted the wording of the oath in accordance with Article 30 of the UNCITRAL Arbitration Rules, Article 14.3 of the Civil Procedure Code, and Article 8 of the Regulation Governing Commercial Conciliation and Arbitration of the Dubai Chamber of Commerce and Industry.
Finally, the Petitioner argued that the arbitrator affirmed in the award that neither party had any objection to the manner in which the arbitration was conducted and that arbitrators are not subject to the provisions of the Evidence Law. The lawmaker has not stipulated a specific wording for the oath by which arbitrators should abide, as arbitration is an important means for resolving disputes arising out of international commercial contracts between parties of different nationalities, beliefs and cultures. Therefore, the Petitioner requested that the challenged judgment annulling the award be deemed defective and overturned on the grounds that the witnesses had not taken the oath.
The Court of Cassation held the above arguments to be groundless, as Article 6 of the Commercial Conciliation and Arbitration Regulation of the Dubai Chamber of Commerce and Industry, promulgated by Decree No. 2 of 1994, provides: “Where no special provision is made in this Regulation, the procedural rules agreed upon by the parties shall be applicable to any dispute submitted to the Chamber for conciliation or arbitration. In case the parties fail to agree on the said procedural rules, the Conciliation or Arbitration Panel shall set the applicable procedures without prejudice to the imperative provisions of laws applicable and prevailing in the Emirate.”
According to the Decree, and as established by the case law, the procedural rules applicable to arbitration conducted under the auspices of the Chamber of Commerce and Industry of Dubai are provided for in the aforementioned regulation. Where no provision is made in the said regulation, the procedural rules agreed upon by the disputing parties shall be applicable. When the parties fail to agree on such rules, the arbitrators shall set the applicable procedures, provided that such procedures are consistent with the imperative provisions of laws applicable and prevailing in the Emirate of Dubai. Article 1 of the UNCITRAL Arbitration Rules approved by the UN Commission on International Trade Law (UNCITRAL) was applied to the arbitration procedures and provides: “1. In case the disputing parties agree in writing to resolve any disputes arising out of the contract by way of arbitration under UNCITRAL Arbitration Rules, then such disputes shall be settled as per the said rules, subject to any amendment approved by the parties in writing. 2. Arbitration shall be subject to the said rules, unless any such rule is inconsistent with any of the provisions of the law [Page43:] applicable to arbitration and whereby both parties are governed, and in this case such law shall prevail.” Thus, in case the disputing parties agree to resolve any dispute arising between them by way of arbitration in accordance with the procedures prescribed under the UNCITRAL Rules, then such rules shall be applicable, except for those that are inconsistent with the provisions of the law applicable to arbitration. The latest version of the Civil Procedure Code prevailing in the UAE shall also be applicable. Clause 19 of the arbitration agreement stipulates that arbitration shall be conducted in accordance with procedures agreed upon by the parties and with any matters determined by the arbitrator, provided that such procedures and matters entail no contradiction with any law or procedure prevailing in the Emirate of Dubai. Article 40 of the Commercial Conciliation and Arbitration Regulation of the Chamber of Commerce and Industry of Dubai provides: “Testimony may be provided verbally or otherwise, without taking the oath, through a written acknowledgement signed by the relevant witness and duly notarized. By way of exception from the aforementioned text, the testimony must be made along with the taking of the oath in case the oath is obligatory in accordance with the law applicable to arbitration procedures. In all cases, the arbitration panel may summon the witness for discussion.” According to this article, if the law applicable to the arbitration procedures necessitates the administration of an oath before the witness provides testimony, then the arbitrator must require any such witness to take the oath.
The arbitration was conducted in Dubai under the Chamber of Commerce and Industry rules, in accordance with the procedures stipulated under the UNCITRAL Arbitration Rules, which provide that the provisions of the applicable law shall prevail in case the UNCITRAL Rules contradict such law.
The law applicable to arbitration procedures, as mentioned above, is the Civil Procedure Code. Article 211 of the Civil Procedure Code provides: “The arbitrators should administer an oath on the witnesses and everyone who shall perjure before the arbitrators shall be considered a committer of the crime of perjury.” According to this provision, as well as to what is established and customary in the adjudication of the courts, arbitrators must administer the oath before witnesses provide their testimony. This provision was included in an imperative form in the arbitration chapter of the Civil Procedure Code to ensure the truthfulness and authenticity of witness testimonies, which are of great value and importance. This provision is also aimed at deterring anyone from committing perjury offences and assuring litigants that the testimony of witnesses is truthful and accurate. As such, the law considers a person providing false testimony to have committed the offence of perjury laid down in Article 252 of the Penal Code. By virtue of the law, any person who commits perjury before a panel with the authority to hear the testimony of witnesses shall be penalized. Hence, arbitrators may not neglect this procedure, even if the litigants raise no objection to its violation during the hearing of witnesses. If any such violation has taken place, the arbitration award shall be deemed null and void. Even if the disputing parties waive their right to claim such nullity before the award is passed, the award shall still remain invalid pursuant to the Article 216.2 of the Civil Procedure Code, which provides: “The acceptance of the nullity shall not be restrained by the litigant party’s relinquishment of his right therein before the delivery of the arbitrators’ decision.”
According to Article 13 of the Civil Procedure Code, a procedure shall not be deemed invalid, unless it is explicitly stipulated by law or in cases where an essential default or defect exists precluding the attainment of the purpose for which the procedure is undertaken. Hence, a procedure shall not be deemed invalid, even if the law stipulates otherwise, in cases where it is proved that the purpose of the procedure has been attained. As the above-mentioned purpose can only be fulfilled by administering oaths to witnesses before they provide their testimony, the litigant may adhere to [Page44:] such invalidity before the Court even if no objection was raised before the arbitrator regarding the failure to abide by this procedure.
It is established, according to Article 41.2 of the Evidence Law, that the wording of the oath that witnesses are required to take shall be as follows: “I swear to speak the whole truth and nothing but the truth.” If necessary, the administration of the oath shall be made in accordance with the religion of the witness. This means that any other formula not including the above-mentioned wording shall not be deemed a valid oath substantiating the truthfulness of the testimony. The Petitioner’s claim as to the witnesses having to take the oath according to a certain wording agreed upon between the parties was held by the Court to be invalid; the witnesses did not take any oath. The minutes of the arbitration sessions show that the arbitrator warned the witnesses of the following: “Be informed, in your capacity as a witness, that you are required to tell the whole truth or otherwise you will be held liable. Are you aware of this?” Such warning may not replace the administration of an oath and may not be used as a wording thereof. Article 216.1 of the Civil Procedure Code provides: “The litigant parties may request the nullity of the arbitrators’ decision when the court examines its authentication and that shall be in the following circumstances: … (c) If a nullity in the decision or a nullity in the procedures which has affected the decision has occurred”
It is established that the arbitrator who issued the award that forms the subject matter of the present dispute had heard the testimonies of witnesses without administering their oaths. The said award has accordingly been deemed invalid. The award was based on the testimonies of witnesses who did not take the oath. Therefore, the award was deemed null and void, and this fact cannot be altered by the provision in Article 212 of the Civil Procedure Code according to which arbitrators are not bound by any procedures other than those provided in Chapter 3 of the Civil Procedure Code, since Article 211 of the Code expressly provided for the administration of the oath to witnesses.
The challenged judgment did not involve any breach or misapplication of the law. The above arguments made against the challenged judgment are groundless.
Accordingly, the present petition to cassation is dismissed.