Headnote

Arbitration – Content of award – Dissenting awards – Majority awards – Requirements for signature of arbitrators

Summary of facts

The Respondent initiated an action before the Dubai Court of First Instance requesting the annulment of an award issued on 28 January 2007. In explaining the statement of claim, the Respondent indicated that, under an agreement dated 24 April 2001, the Petitioners had bought a publication house that was fully owned by the Respondent. The two parties had agreed to settle the disputes arising between them by way of arbitration if an amicable settlement could not be reached. A dispute emerged between the parties and was subsequently referred to a tripartite arbitration panel. On 28 January 2007, the arbitration award was issued. On 25 April 2007, the Court of First Instance annulled the arbitration award issued on 28 January 2007 on the basis that the copy of the award presented by the Petitioners indicated that the award did not include the signature of the arbitrators on the pages containing the grounds. A copy of the arbitrators’ signatures could only be found on the last page, which only included the dispositive part of the award. The Petitioners appealed the ruling in Appeal No. 362 of 2007 – Civil and presented another copy of the arbitration award with the arbitrators’ signatures attached to the grounds. On 27 September 2007, the Court of Appeal upheld the appealed judgment. The Petitioners filed a petition to cassation challenging this judgment. The Respondent requested the dismissal of the petition to cassation.

Held

The Petition to Cassation was dismissed.

Unless an award is signed by all of the arbitrators, the award is null and void. The exception to this rule is where an arbitrator refuses to sign the award. In such cases, the award will be valid only if a majority of the other arbitrators sign the award, while the fact that one of the arbitrators refused to sign the award must be noted in the wording of the award.

The arbitration award includes both the grounds and a dispositive part. Both parts of the award must be signed by all of the arbitrators in order to be valid. The exception to this is where the dispositive part is attached to the grounds. In the absence of this exception, all the pages of the award must be signed by all of the arbitrators.

Judgment

The Petition to Cassation is based on two arguments in which the Petitioners claim that the Court of Appeal’s judgment involved a misapplication of the law.

First, the Petitioners claim that the challenged judgment involved a violation and faulty application of the law, because, under Article 216 of the Civil Procedure Code, litigants are only able to request the annulment of the arbitration award in cases that are exclusively defined, and then only when the Court of First Instance is considering the ratification of such exclusively defined cases. No initial claim may be filed to request the annulment of the arbitration award. Since the Respondent filed the claim to annul the arbitration award before the Petitioners filed the claim to ratify the award, the Court of First Instance should have dismissed the claim for being filed prematurely. As the challenged judgment ignored this consideration, the challenged award should be deemed defective and should therefore be overruled.

The Petitioners’ first argument is incorrect. As the third paragraph of Article 213 of the Civil Procedure Code states: “As for the arbitration which takes place between the litigant parties outside the court, the arbitrators should deliver a copy of the decision to each party within five days from the delivery of the arbitration decision and the court shall examine the authentication or the nullity of the decision according to the [Page87:] request of one of the litigant parties through the usual procedures of the action prosecution.” Paragraph 1 of Article 216 of the Code states: “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.” Under the provisions of Article 217.1 and 217.2, the Civil Procedure Code states that arbitration awards may not be challenged by any means and that the judgment ratifying or nullifying the award may be challenged through proper means. Together these provisions indicate that, although arbitration awards may not be challenged by any means stated in the Civil Procedure Code, the litigant may request the annulment of the award on one of the grounds mentioned in subparagraphs (a), (b) and (c) of Article 216. This request may be presented either as an accidental request, i.e., when the court is considering the ratification claim filed by the other party to the award in accordance with Article 216.1, or through the normal procedures as expressly stated in Article 217.2, even before the ratification claim is filed. The Code thus does not force the losing litigant in the arbitration to wait until a ratification claim is filed before filing a request for the annulment of the award.

The Court considers that it was established from the case papers that the arbitration was conducted away from the court, with the Respondent filing papers through the normal procedures for initial claim and requesting the annulment of the arbitration award. The Court therefore considers that the Court of Appeal acted appropriately in considering that the request was filed in the prescribed legal manner and further considers that the Court of Appeal did not err in its application of the law. The Court therefore does not accept the arguments made by the Petitioners and considers them to be legally groundless.

The Petitioners’ defence before the Court is further that, under Article 212.5 of the Civil Procedure Code, it was enough for the arbitration award to include the signatures of all or most of the arbitrators who participated in the hearings and deliberations for it to be considered a valid award. This is notwithstanding the fact that they only signed the dispositive part, as there was no need for signatures on all the pages, including the grounds of the award, if the dispositive part included a link to the grounds.

The copy of the award that was presented to the Court of First Instance included the signatures of the arbitrators on the dispositive part of the award and was considered to be free of defect.

The other copy of the arbitration award that was delivered to the Petitioners and presented by them to the Court of Appeal was signed by the majority of the arbitrators.

The Petitioners’ main defence is that the Court of Appeal’s judgment, in upholding the Court of First Instance’s judgment, ignored the fact that there were two different copies of the award when it held that the award invalid on the basis that it did not include the arbitrators’ signatures on the grounds and that the inclusion of the signatures on dispositive part alone was insufficient to make the award valid. The Court of Appeal cited the copy of the award submitted by the Respondents before the Court of First Instance while ignoring the copy submitted by the Petitioners before the Court of Appeal and the Petitioners’ explanation that there were differences between the signatures on the two copies of the award. The Petitioners argue that since the Court of Appeal did not verify whether or not the signatures matched, either by appointing experts or asking the arbitrators to authenticate their signatures, the judgment must be considered defective and overruled.

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The Court considers that the Petitioners’ argument is inadmissible. Article 212.5 of the Civil Procedure Code states: “The arbitrators’ decision shall be delivered with a majority of opinions and it should be written together with the contradictory opinion, and it should particularly include a copy of the arbitration agreement and a resume of the litigant parties’ statements, their documents, the decision’s reason and its pronunciation, its delivery date, its delivery place, the arbitrators’ signatures, and if one or more of the arbitrators has refused to sign the decision that should be mentioned therein, and the decision shall be valid if the majority of the arbitrators have signed it.” This wording indicates that one of the essential pieces of data that should be included in an arbitration award is the signature of the arbitrators, as this is the only evidence that the award legally exists. The absence of this will render the award subject to annulment. The Court considers that the sole viable exception to this is when the grounds, or part thereof, are attached to the page where the dispositive part is recorded and has been signed by all of the arbitrators. The exception works by effectively extending the effect of the signatures so that they include the grounds of the award. This fulfils the statutory requirement for all of the arbitrators to sign the award. Where the grounds of the award are issued in pages separate from the dispositive part of the award, all the pages of the award must be signed by all the arbitrators, in addition to the last page including the dispositive part. Otherwise, the award shall be invalid. Where one or more arbitrators decline to sign the award this shall be mentioned in the award, and in that case the award shall be valid with no omission or default, as long as it has been signed by the majority of the arbitrators.

The Court considers that even if the award had been signed by all the arbitrators, the fact that the dispositive part was separate from the pages including the grounds of the award necessitated that the arbitrators sign all the pages containing the grounds, in addition to the last page containing the dispositive part.

The Court considered that the two copies of the award, whether presented by the Respondent or the Petitioners, showed no evidence that all three of the arbitrators had signed the pages containing the grounds in addition to the last page containing the dispositive part. On that basis, the award was invalid notwithstanding that the copy presented by the Petitioners to the Court of Appeal had two signatures on the grounds of the award, ascribed to only two of the three arbitrators who signed the dispositive part. Neither copy of the award mentioned that an arbitrator had declined to sign it. All of the arbitrators signed the separate page containing the dispositive part of the award, and on this basis the Court considered that this left no room to argue that the award should be valid with only two signatures. The award would have only been valid if the award reported that the third arbitrator had declined to sign it. Having an arbitrator with a different opinion to the other two does not automatically mean that he has to decline to sign the award, but it does make it necessary to have the arbitrator’s signature on both the dispositive part and the grounds of the award, otherwise the award shall be invalid.

The Court considers the decision of the Court of Appeal to be the true conclusion, regardless of whether or not it had expressly mentioned that it did not rely on the copy of the award as presented to it by the Petitioners.

Accordingly, the petition to cassation is dismissed.