CHALLENGES TO ARBITRAL AWARDS IN THE UNITED ARAB EMIRATES: WHAT HAS CHANGED SINCE 2018?
In 2018, the United Arab Emirates (UAE) legislature enacted Federal Law No. 6 of 2018 (UAE Arbitration Law), the UAE’s first standalone arbitration law.
The enactment of the UAE Arbitration Law was welcomed with great enthusiasm by the local arbitration community, as it addressed many of the perceived shortcomings of the previous legislation governing arbitration. Among its benefits, the UAE Arbitration Law provides greater clarity on the circumstances in which a domestic court will refuse to recognise an arbitral award rendered governed by the Arbitration Law. Whereas under the previous legal regime courts were somewhat receptive to challenges to arbitral awards, local judges are now more hesitant to annul them as confirmed by publicly available case law.
The old legal regime under the Code of Civil Procedure
Prior to the promulgation of the UAE Arbitration Law, arbitrations in the UAE were governed by Chapter 3 of Federal Law No. (11) of 1992 Concerning Issuance of the Civil Procedures Code (Code of Civil Procedure). Under Article 216, a local court was empowered to refuse recognition of an award – in part or in full – under the following circumstances: (i) if the award was issued without, or was based on, invalid terms of reference or an agreement which had expired, or where the arbitral tribunal exceeded its limits under the terms of reference; (ii) if the award was issued by an arbitral tribunal that was not appointed in accordance with the law, or only a number of the arbitrators who were not authorised to issue the award in the absence of the others, or if it was based on terms of reference in which the dispute was not specified, or if it was issued by a person who is not competent to act as an arbitrator or by an arbitrator who does not satisfy the legal requirements; or (iii) if the award of the arbitrators or the arbitration proceedings became void and this invalidates the award.
Jul-Sep 2021 issue
Horizons & Co.