Headnote

Arbitration – Appointment of arbitrators – ADCCAC rules

Summary of facts

The Petitioner and the First Respondent had agreed in a memorandum of understanding to liquidate their company and its subsidiaries and to resolve the disputes between them by arbitration, pursuant to the procedural regulations of the Abu Dhabi Commercial Conciliation and Arbitration Center (ADCCAC), which is the Second Respondent in this action.

As the parties to the arbitration had a disagreement in respect of the liquidation, the Petitioner filed an arbitration and requested that each party designate one arbitrator. Thereafter, the ADCCAC requested those arbitrators to designate a chairman. When they failed to do so, the ADCCAC immediately submitted the issue of the appointment of the third arbitrator to an independent third body. This was not in compliance with the procedures laid down in the arbitration agreement or the ADCCAC Rules. Of particular concern was that the process adopted by the ADCCAC did not allow the parties to object to the identity of the chairman.

On that basis, the First Respondent brought an action against the Petitioner and the Second Respondent, requesting, among other things, that the third arbitrator be appointed by the Higher Judicial Council. The Court of First Instance dismissed the action. The First Respondent appealed before the Court of Appeal, which cancelled the appointment of the third arbitrator by the ADCCAC and referred the matter of the appointment of the third arbitrator to the Ministry of Justice.

Held

The petition to cassation was dismissed.

Pursuant to Articles 203 and 204 of the Civil Procedure Code, the court of original jurisdiction may appoint one or more arbitrators at the request of either litigant in the event that the litigants fail to agree on the appointment of said arbitrators. The court’s decision is not subject to appeal.

The failure of the institution to appoint an arbitrator in accordance with the relevant procedures gives either party the right to resort to the court of original jurisdiction to request the appointment of the arbitrator.

Judgment

Pursuant to Articles 203 and 204 of the Civil Procedure Code, if the parties have agreed to arbitration in respect of a dispute arising between them in the performance of a contract concluded between them and they fail to agree on the arbitrators or one or more of the agreed arbitrators abstains from working, resigns, is dismissed, is removed by judgment or is otherwise prevented from working, the court originally competent to try the dispute subject matter shall, upon the request of either party to litigation, appoint the required arbitrators. The decision of the court in this regard is not subject to challenge. Referring to Article 12 of the ADCCAC Arbitration and Conciliation Rules, the Court of Cassation held that the appointment by the ADCCAC of the third arbitrator failed to comply with that article, since it was made without the required consultation of the parties.

Accordingly, the challenged judgment annulling the ADCCAC decision appointing the third arbitrator was appropriate. Either party therefore had the right to resort to the court of the original jurisdiction to request the appointment of the third arbitrator.

Accordingly, the present petition to cassation is dismissed.