Historically, parties preferred litigation and were generally reluctant to use arbitration. This was particularly because some uncertainty that was considered to surround the enforcement of arbitral awards. Although there is still a degree of uncertainty regarding enforcement, local courts are now generally more familiar with the arbitration process and more willing to recognise and enforce arbitration awards. Recently, the Dubai International Financial Centre (DIFC) Court has emerged as a forum where both domestic and foreign arbitration awards can be enforced. The DIFC Court is an English language common law court operating in the DIFC Free Zone.
Historically, litigation was often the preferred method for resolving disputes, as parties felt that it offered more certainty and control than arbitration. However, this trend has changed in recent years, and many parties now prefer to use arbitration to resolve their disputes.
One of the main reasons for this shift is the increasing cost and time associated with litigation. Court proceedings can be lengthy, and the costs of legal fees, expert witnesses, and court fees can quickly add up. In contrast, arbitration is often faster, less formal, and can be more cost-effective than litigation.
Another factor that has contributed to the rise in arbitration is the ability to choose a neutral arbitrator or arbitration panel. In litigation, parties are subject to the judge assigned to their case, whereas in arbitration, parties can choose an arbitrator with relevant experience and expertise in the area of dispute.
Arbitration also offers more privacy and confidentiality than court proceedings, which can be important for parties who want to keep their dispute out of the public eye. In addition, the final decision in arbitration is typically binding, meaning that the parties can move on with certainty once the decision has been made.
Overall, while litigation is still a common method of resolving disputes, arbitration has become an increasingly popular alternative. Parties are recognizing the benefits of arbitration, including cost-effectiveness, flexibility, and the ability to choose a neutral arbitrator, and are turning to this method to resolve their disputes in a timely and efficient manner.
Arbitration has increasingly become a popular method of dispute resolution in the UAE and in the surrounding regions. The growth of arbitration in the UAE is reflected to some extent by the fact that there are now several institutions in the UAE which administer commercial arbitrations.
ARBITRATION IN THE UAE
Although the majority of those working in the UAE construction industry have heard of arbitration, how much do they really know and why is it so important to the development of the nation?
The rapid growth of the United Arab Emirates’ (UAE’s) economy brought with it tourism, mass infrastructural projects, construction, commerce and international investment. The UAE’s exceptional growth also highlighted the need for a modern legal and judicial framework capable of instilling confidence into the growing market, and to further attract more inward investment. Most foreign investors were accustomed to operating in common law environments (as opposed to the civil law system in the UAE), which have a historical and sophisticated body of binding legal precedents and therefore offer certainty for those doing business in a market economy.
WHAT ARE THE MAIN ARBITRATION INSTITUTIONS IN THE UAE?
The Abu Dhabi Commercial, Conciliation and Arbitration Centre
In 1993, Abu Dhabi Chamber established Abu Dhabi Commercial Conciliation and Arbitration Centre to settle trade disputes through conciliation and arbitration. The centre kept panels to register the names of specialists in the fields of conciliation, arbitration, expertise and translation.
Conciliation is conducted through a mediator accredited by the centre or selected by both disputing parties.
The conciliator’s decision concerning a dispute is not considered binding, but it has the nature of recommendation on a proposal for dispute solving.
The default language is Arabic, unless the parties expressly choose English.
The Dubai International Arbitration Centre (DIAC)
Dubai holds an autonomous arbitration institution known as The Dubai International Arbitration Centre (DIAC) which replaced the former Centre for Commercial Conciliation and Arbitration.
The rules of arbitration are governed by Decree No. 11 of 2007, which was approved by H. H. Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai on 6 May 2007.
The new rules are available in both English and Arabic languages.
For more information read the DIAC arbitration rules, 2007.
DIFC-LCIA Arbitration Centre
DIFC-LCIA Arbitration Centre is a partnership between the London Court of International Arbitration (LCIA) and the DIFC. It was established in 2008 and is based in DIFC. The rules of the DIFC-LCIA Arbitration Centre are adapted from LCIA rules and are compatible with the civil and the common law systems. Written agreement of the parties is required for DIFC-LCIA jurisdiction to mediate in the case.
For more information, refer to DIFC-LCIA arbitration rules
International Islamic Centre for Reconciliation and Arbitration (IICRA)
International Islamic Centre for Reconciliation and Arbitration (IICRA) is an international, independent, non-profit organisation of the Islamic finance industry.
The centre settles financial and commercial disputes that arise between financial or business institutions and their clients or between them and third parties that choose to apply the provisions of Islamic law and sharia principles in resolving disputes through reconciliation or arbitration.
The centre practices locally, across GCC and internationally. Agreement of the parties is required for IICRA’s jurisdiction.
For more information, refer to IICRA.
Other arbitration institutions in UAE
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Our firm is well-equipped to handle a wide range of arbitration cases, including construction disputes, commercial disputes, and international disputes. We work closely with our clients to understand their specific needs and goals, and we tailor our arbitration services accordingly.
At e-basel, we believe in providing transparent, efficient, and cost-effective arbitration services. Our team of experts is highly skilled in managing complex arbitration cases and is committed to achieving a satisfactory outcome for all parties involved.
Whether you are an individual, a small business owner, or a large corporation, e-basel is ready to provide you with the arbitration services you need. We are happy to answer any questions you may have about our arbitration services, and we look forward to working with you to resolve your dispute in a fair and effective manner.