Professional Documents
Culture Documents
Francis Ho
With the number of construction disputes set to double in Dubai this year, Francis Ho guides you through the local options for those who wish to arbitrate their disputes
Most importantly, the DLAC does appear to enjoy a very significant advantage over the DIAC regarding the enforcement of arbitral awards. The UAE still has no federal arbitration law - arbitration falls under the UAE Civil Procedure, Federal Law No. (11) of 1992 which is largely viewed as inadequate in addressing the subject. This weak spot means that domestic arbitral awards are not automatically binding and enforceable in the UAE. A successful party would thus need to get its award certified though all three tiers of the local court system if the other party refused to pay. Not only does the DIFC avoid this issue by having a separate, suitable arbitration law but the Dubai emirate's Law No. (12) of 2004 provides that any arbitration award made in the DLAC is enforceable in Dubai's courts as soon as it has been ratified by the DIFC's courts. This legislation should mean that local enforcement is not an issue for a DLAC award. Nevertheless, doubts still persist in some quarters that the Dubai courts will apply Law No. (12) of 2004 without question. It is likely that these concerns will not be fully dispelled until a test enforcement case clarifies the position. Arbitration elsewhere in the UAE Parties based in Abu Dhabi frequently select the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) as the arbitration centre. Like the DIAC, the ADCCAC has a high degree of experience in construction disputes. It also suffers from the same drawback as the DIAC, namely, that the absence of a suitable UAE arbitration law means that domestic arbitration awards are not final and binding. The UAE's main arbitration centres can hear disputes from the other five other emirates although it should be noted that each emirate has its own arbitration centres. These have the same difficulties on enforcement as the DIAC and the ADCCAC. Other arbitration centres in the Middle East If the parties are willing to look outside the UAE for an arbitration venue, there are respected arbitration centres in Gulf jurisdictions where there is a satisfactory, UNCITRAL Model Law based arbitration law and which states are signatories to the New York Convention. These options include venues in Cairo and Muscat. Another alternative is Bahrain, an oil-rich kingdom less than an hour's flight from Dubai and Abu Dhabi. Bahrain is due to open a new arbitration centre later this year. The Bahrain Chamber for Dispute Resolution (BCDR) could emerge as a serious local rival to the arbitration centres of Dubai and Abu Dhabi as a neutral seat of international arbitration. The BCDR has teamed up with the American Arbitration Association (AAA) and may provide an attractive option for parties more comfortable with the rules and practices of the AAA and its international division, the International Centre for Dispute Resolution. On the matter of enforcement, Bahrain has ratified the New York Convention and has an arbitration law based on the UNCITRAL Model Law so enforcement of an award obtained in Bahrain within the kingdom or in another Convention state (such as the UAE) should be straightforward. In spite of the growing reputation of its major arbitration centres, it is universally-acknowledged that the UAE needs to enact a satisfactory federal arbitration law as soon as possible. A draft law was circulated for consultation last year based on the widelyaccepted UNCITRAL Model Law. However, its progress has been chequered and it remains unclear when it will come into law and in what form. Until then, enforcement in the UAE will remain a key concern for those using local arbitration centres. For those committed to arbitrating within the UAE, at present the separate legal framework of the DIFC should make the DLAC a more attractive seat than the DIAC or the ADCCAC.