Headnote

Arbitration – Jurisdiction

Summary of facts

The Respondents requested and received a decision, rendered by the Rental Dispute Resolution Committee of the Sharjah municipality, instructing the Petitioner to vacate a property owned by the Respondents following the expiry of a lease contract. The Respondents received this judgment despite knowing that the lease had been rescinded by virtue of another lease contract, which had not expired. The Petitioner then resorted to the Rental Dispute Resolution Committee of the Sharjah municipality, asking for the judgment to be cancelled and the later lease contract to be deemed in force. The Rental Dispute Resolution Committee stated that it had no specific jurisdiction to hear a request to challenge the decision, which would fall under the jurisdiction of the ordinary judiciary. The Court of First Instance then also issued a decision stating its lack of jurisdiction to adjudicate on the Petitioner’s action. The Petitioner appealed this judgment, and the Court of Appeal decided, on 31 May 2003, to uphold the appealed judgment. The Petitioner then filed a petition to cassation, alleging a violation and misapplication of the law. The Petitioner’s argument was that the Rental Dispute Resolution Committee had avoided its role in stating that it did not have jurisdiction to hear the petition, thereby violating the rules of justice and infringing the constitutional rights of the Petitioner.

Held

The Court of Appeal’s judgment was overturned.

Article 216 of the of the Civil Procedure Code provides that the legislature has given the losing party the right to institute an initial motion requesting the arbitration award to be nullified that is similar to the right given to the prevailing party to institute an initial motion requesting the arbitration award to be ratified through regular legal proceedings. Also, the losing party has the right to file an incidental request to nullify the award when the action to ratify the award is heard.

Judgment

The Petitioner’s argument is appropriate based on the following grounds.

Article 4 of Local Law No. 6 of 2001, which governs the relationship between lessors and lessees in the emirate of Sharjah, provides that “a competent committee called the Rental Dispute Resolution Committee shall be headquartered in the Sharjah municipality”.

Article 5 of Local Law No. 6 of 2001 further stipulates: “Reviewing and resolving urgently by arbitration all disputes arising from the lease contract between the lessor and the lessee shall be the jurisdiction of the Rental Committee…. The awards rendered by the Committee in claims whose value does not exceed AED 100,000 shall be final, with complaints to be filed to the Grievance Committee within 15 days against awards in other cases…. The award shall be carried out, after being ratified by the competent court; namely, the Federal Court of First Instance within whose jurisdiction the leased premises are located, by the execution judge.”

Essentially, the Rental Dispute Resolution Committee is an arbitral panel.

Article 8.G of Decision No. 15 of 2001 of the Executive Council of the Sharjah Emirate concerning procedures of the Committees of Dispute Resolution and Complaint provides that “after considering the abovementioned provisions, the Committee may determine procedures to be followed and shall not be restricted by the measures of the procedures provided for in the applicable laws except for Articles 203-217 of Law No. 11 of 1992”.

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In addition, as per Article 5 above, the awards rendered by the Committee regarding claims exceeding the amount of AED 100,000 may be challenged before the Grievance Committee, which consists of three judges. The Grievance Committee’s decisions shall be deemed final and shall not be subject to challenge by any means of litigation. The Federal Court of First Instance in whose jurisdiction the leased premises are situated has jurisdiction to ratify (or annul) the awards rendered by the Committee, as is the case for arbitral awards generally in cases where the award has been made out of court.

Article 216 of the of the Civil Procedure Code provides that the legislature has given the losing party the right to institute an initial motion requesting the arbitration award to be nullified that is similar to the right given to the prevailing party to institute an initial motion requesting the arbitration award to be ratified through regular legal proceedings. Also, the losing party has the right to file an incidental request to nullify the award when the action to ratify the award is heard.

In this case, the arbitration award that formed the subject of the dispute was rendered outside the courts, and the Court of First Instance accordingly has jurisdiction to hear the action relating to its nullification. The Court of Appeal’s judgment upholding the Court of First Instance’s decision has violated and misapplied the law, since the Court of First Instance is competent to hear the nullification action of the Committee’s decision.

Accordingly, the Court of Appeal’s judgment is overturned and the action remanded to the Court of First Instance.