In recent years, the GCC region has undergone significant and rapid economic changes and, of its six states, the UAE (and, in particular, Dubai) has positioned itself as the key financial hub in the region. The liberalisation of the UAE’s regulatory environment has made it more attractive and less challenging to do business in the region which, coupled with the crippling effects of the GFC, led to a significant rise in disputes across all sectors and industries.

With the rise in disputes between local and internationally-based companies, Dubai has been given a rapid education in arbitration, which has forced its judiciary to promptly get to grips with the international arbitration landscape.

Arbitrations seated In Dubai

In recent years, arbitration in the GCC (and in particular, the UAE) has experienced monumental growth, with both domestic and international users increasingly drawn to its numerous advantages over the region’s court litigation system.

The most popular institutions in the region include DIAC, the DIFC-LCIA, ADCCAC (all based in the UAE) and the QICCA (in Qatar). Regarding Dubai, the onshore DIAC was formed in 1994, whereas the offshore DIFC-LCIA Arbitration Centre was established in 2008 to provide the DIFC (a financial free zone operating under the common law legal jurisdiction) with its own complementary arbitral institution.

A jurisdiction’s development as a reliable centre for arbitration is dependent upon the existence of an operational and efficient enforcement regime for both domestic and foreign arbitral awards. In light of some recent Dubai Court judgments, it is hoped that the problems with regional enforcement that once existed are reassuringly being overcome. As a result, parties with operations or commercial dealings in the Middle East should now be more confident in choosing seats in the GCC to refer their arbitrations.

Jan-Mar 2014 issue

DLA Piper Middle East LLP