DIFC-LCIA Arbitration Centre Subsumed Into DIAC

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Posted September 27, 2021 | Published in Dispute resolution
DIFC-LCIA Arbitration Centre subsumed into DIAC

In a move to strengthen Dubai’s position as a global centre for alternative dispute resolution, on 14 September 2021,
the Ruler of Dubai issued Decree No. 34 of 2021 to abolish the DIFC-LCIA Arbitration Centre and Emirates Maritime
Arbitration Centre, and to transfer all property, employees and cases from these centres to the Dubai International
Arbitration Centre (“DIAC”).
To ensure a smooth transition for disputes from the abolished arbitration centres over to DIAC, the Decree has
provided the following directions:
Arbitration agreements that refer disputes to the abolished arbitration centres will remain valid and effective and
are eligible to be considered and determined by DIAC, unless otherwise agreed by the parties.
Arbitral tribunals and committees formed under the abolished arbitration centres will be able to continue to
consider and determine the disputes pending before them. However, this will be under the supervision of DIAC,
unless otherwise agreed by the parties.
Dubai Courts and the DIFC Courts will continue to consider cases, requests and challenges relating to any
arbitration award or procedure issued by an arbitral tribunal within the abolished arbitration centres or DIAC.
Under the Decree, parties to a DIAC arbitration may choose whether they want the arbitration to be seated “onshore”
in the Emirate
Welcome toofFenwick
Dubai, or This
Elliott. “offshore” in theread
site uses cookies, Dubai International Financial Centre (“DIFC”) free zone. If an arbitral
our policy X seat
is not explicitly chosen by the parties,
(/about/compliance/cookies-policy). then the default seat will be DIFC. To accommodate for this option, DIAC has
been permitted by Article 2 of the Decree to open a branch in the DIFC free zone in addition to its existing premises in
mainland Dubai.
" The decision to restructure and reform DIAC is well aligned with the recent recognition of Dubai
as one of the top ten arbitration destinations globally, and is intended to offer a wider suite of
arbitration specialists with a centralised structure."
A Court of Arbitration will also be established within DIAC, which will determine the application of the Decree and the
arbitration rules and procedures, supervise DIAC arbitrations, including the appointment of arbitral tribunals and
fixing of arbitration costs and expenses, and propose policies for the management of DIAC, DIAC arbitrations, and
other training and education to be provided by DIAC within Dubai. The Court of Arbitration forms part of a wider
restructuring of DIAC, which also includes a new board, a new administering body, and new rules to be published
within six months.
DIAC was established in 2004 and is a popular choice for UAE based parties, particularly parties from Dubai. DIAC
cases are overseen by the Dubai Courts, which are Arabic speaking and operate under UAE Law.
By contrast, the DIFC-LCIA Arbitration Centre was intended to attract international parties due to the use of the DIFC
free zone, which is a common law jurisdiction. This enables cases to be overseen by English-speaking common law
courts, and by arbitration law based on the UNCITRAL Model Law.
The decision to restructure and reform DIAC is well aligned with the recent recognition of Dubai as one of the top ten
arbitration destinations globally, and is intended to offer a wider suite of arbitration specialists with a centralised
structure.
By Grace Lee-Tuck
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