Headnote

Arbitration – ADCCAC rules of arbitration – Notification procedures – Article 208 of the UAE Civil Procedure Law

Summary of facts

The Respondent entered into a Memorandum of Understanding (MoU) with the Petitioner in which the Petitioner agreed to promote the Respondent’s architectural consultancy business and to procure contracts for the Respondent in return for monthly fees. A dispute arose between the parties and the Respondent referred the matter to arbitration under ADCCAC requesting a declaration that the Respondent is entitled to cease making payment of the Petitioner’s fee and to restore the status quo. The Respondent also sought the refund of fees from the Petitioner.

The Arbitrator issued an award and granted the Respondent’s claim. The Respondent then approached the Court of First Instance seeking to ratify and enforce the arbitral award. The First Instance Court ratified the arbitral award. The Petitioner appealed before the Court of Appeal which upheld the First Instance Court’s ruling. The Petitioner filed the present petition to cassation.

The Petitioner pleaded that the appeal court erred in its finding as the Petitioner was not served with the arbitration notice as set out under Articles 8, 9 and 10 of the UAE Civil Procedure Law and the entire arbitration proceedings were conducted in the Petitioner’s absence. Moreover, the Petitioner contended that notice had no legal effect unless served in the manner provided and recognised in the arbitral rules which provide that notice must be served through courier, Abu Dhabi Chamber of Commerce and Industry messenger or addressed to a post office box or sent by facsimile.

Held

The petition to cassation was dismissed.

Article 208 of the UAE Civil Procedure Law explicitly states that arbitrators shall not be bound to observe the notification requirements of the UAE Civil Procedure Law and that the exception to the general rules of notification set out under Articles 8, 9, 10 of the UAE Civil Procedure Law was included to provide a streamlined notification procedure for arbitrations free from the formalism of the Civil Procedure Law. Notifications required for arbitrations may be served by any means whether before, during or after the conclusion of the arbitration proceedings. Notifications can be also served by modern means of communication such as facsimile or e-mail.

Judgment

Ad hoc arbitration requires the parties to specify the method of service of the request for arbitration or statement of claim and/or all other notification of documents between the parties. For institutional arbitration, however, the regulations of the institution would govern the service of documents. Articles 16 and 36 of the Abu Dhabi Commercial Conciliation and Arbitration Centre Rules (ADCCAC) (1993) provide that “The management of the Centre and all Boards of Conciliation or Arbitration shall recognise the contact address given by the parties, together using telex, fax or registered mail in all correspondence and notices”.

Article 36 of the Rules also provides that

The Arbitration Board shall call the disputing parties to a combined meeting to be held before the Board. All parties must be summoned at least one week before, by written notification to be delivered to the parties or their legal representatives. The [Page96:] notification shall fix the date, place and hour for the meeting. In case of default by any or all parties the Board shall decide whether or not the notification was executed and whether the summons should be re-served.

In relation to appearance and default and its impact on the progress of arbitration, Article 208 of the UAE Civil Procedure Law provides that

If a party fails to abide by any of the agreed deadlines, the arbitral tribunal has the right to issue its award based on the documents received from the other party to the dispute.

Additionally, Article 36 (2) of the ADCCAC Rules 1993 provides:

Failure of the applicant to Arbitration to appear at the hearing without a written excuse shall lead to the dismissal of his application and closing the file of the case where the file does not include any claims for the respondent against the applicant. The Board may likewise in case of failure of the respondent to appear in any hearing sessions without any acceptable excuse, proceed in arbitration and pass a default award against the absentee.

The Court of Appeal upheld the First Instance Court’s decision on the basis that the Petitioner had sought to set aside the arbitral award without following the normal procedure for filing an action under Article 213 of the UAE Civil Procedure Law. The Court of Appeal further supported its reasoning in accordance with Article 215 of the UAE Civil Procedure Law, the court shall confirm the arbitral award after reviewing it with the terms of reference and confirming that no bar exists to preclude enforcement.

The court considered the records and noted that the Director General of ADCCAC issued a letter notifying the Petitioner of the Respondent’s request for arbitration and requested to send a response and nominate an arbitrator. Moreover, the arbitrator issued a letter summoning the Petitioner and the Respondent to a hearing on 21 June 2012 which the Petitioner did not attend despite receiving notification by mail at its post office box, the address given in the MoU. Additionally, the arbitrator re-summoned the Petitioner to a hearing on 5 July 2012 which the Petitioner did not attend either despite receiving notification through a courier and by e-mail from the post office of the Abu Dhabi Chamber of Commerce and Industry. The minutes of the 19 July 2012 hearing confirm that the Petitioner failed to attend despite their notification by Abu Dhabi Chamber of Commerce and Industry messenger on 11 July 2012. The Petitioner refused service on that occasion and was re-served the same day through the courier. Hence, the court considered that the Petitioner was duly notified of the arbitration hearings. Based on the foregoing, the Court of Appeal upheld the Court of First Instance’s decision to confirm the arbitral award after reviewing it with the terms of reference and ascertaining that there was no impediment existed to preclude enforcement under Article 216 of the Civil Procedure Law.

The Appeal Court’s reasons for the judgment are sound, sufficient and consistent with law and accordingly, the petition to cassation is dismissed.