Headnote

Arbitration – Ratification of foreign award – New York Convention on the recognition and enforcement of foreign awards

Summary of facts

The Petitioner filed an action before the Dubai Court of First Instance requesting the recognition of an arbitral award rendered under the ICC rules of arbitration in London, ordering the Respondent to pay the Petitioner damages together with interest. The Respondent submitted a counterclaim requesting to annul the arbitration award on several procedural grounds. The Court of First Instance dismissed both actions.

The Petitioner appealed the Court of First Instance decision before the Court of Appeal which dismissed the action and upheld the lower court’s decision.

The Petitioner filed a petition to cassation.

Held

The decision of the Court of Appeal was overturned and the matter was remanded to the court of appeal for reconsideration by a different panel.

It is established by the judiciary of this court that the provisions of conventions and treaties between UAE and other foreign states or the agreements endorsed by UAE shall be applicable regarding the enforcement of the foreign court rulings and arbitration awards even with the absence of the conditions stated in Section Four of the UAE Civil Procedure Code.

Judgment

Whereas the Petitioner describes the challenged ruling as violating and misapplying the law on the ground that it dismissed the Petitioner’s request to recognise and enforce the arbitration award stating that

to enforce the arbitration award rendered in a foreign country without filing an ordinary case in the state where the award is requested to be enforced — in case either a country has not signed an arbitration treaty or convention — it is required that both the states are members to the New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitation Awards of 1958 and the prior Geneva Convention of 1927. UAE has ratified the New York Convention by virtue of the Federal Decree No. 43 of 2006 published in the Official Gazette on 28 June 2006. The case documents do not refer to UAE and Great Britain joining the same convention regarding the enforcement of arbitral awards in each of them. Consequently, the award — subject of the dispute — rendering in London may not be enforced in UAE.

Great Britain has been a member of the New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitation Awards since 1975. Accordingly, both the states — the one where the arbitration award was rendered and the other where the award is requested to be enforced — have joined the Convention regarding the enforcement of the arbitral awards. Consequently, the provisions of the New York Convention ought to apply. Thereupon, the challenged decision was supposed to accept the request for recognition and enforcement of the arbitral award and should be reversed.

As for such challenge, it is established by the judiciary of this court that the legislator has issued some regulations for the Enforcement of awards in Chapter One of Book Three of the UAE Civil Procedure Code. Section Four of the UAE Civil Procedure Code (Articles 235 to 238) provides for the rules for enforcing the foreign awards, orders and bonds in of the said law. Article 238 provides:

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Rules provided for in the preceding Articles do not prejudice rules and regulations provided for in conventions signed between the UAE and other countries in this respect.

It is established by the judiciary of this court that the provisions of convention and treaties between UAE and other foreign states or the agreement endorsed by UAE shall be applicable regarding the enforcement of the foreign court rulings and the arbitration awards even with the absence of the conditions stated in Section Four of the UAE Civil Procedure Code. It is proven by the Federal Decree No. 43 of 2006, published in the Official Gazette on 28 June 2006, that UAE ratified New York Convention on the Recognition and Enforcement of Foreign Arbitation Awards. Article 1 of the said Convention provides:

This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

Article 3 of the Convention provides:

Each Contracting State shall recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

Whereas Article 238 of the UAE Civil Procedure Code provides that:

The international conventions, whenever endorsed by the State, shall be applicable and enforced and the judge shall be required to apply their provisions regarding the enforcement of the foreign court ruling.

Whereas it is obvious, by reviewing the New York Convention on the Recognition and Enforcement of Foreign Arbitation Awards, that Great Britain has been a member of such Convention since 24 September 1974, meaning that the state where the arbitration award is issued and the state where the award enforcement is sought are both members to New York Convention. Accordingly, the Convention ought to apply to the dispute. Whereas the challenged ruling deviated from such rule and ordered to dismiss the Petitioner’s request by stating the above-mentioned reasoning; the challenged decision misapplied and violates the law, rendering it worthy of reversal.