Alternative methods to settle commercial disputes
Arbitration or out-of-court settlement is increasing in the UAE. Here are some arbitration institutions for commercial disputes.
UAE federal law on arbitration
In May 2018, the UAE issued Federal Law No. 6 of 2018 on Arbitration (PDF) . The new arbitration law annuls articles 203 to 218 of the UAE Civil Procedures Law No. 11 of 1992 which tackled some provisions of arbitration in UAE.
The new arbitration law contains 61 articles and it applies on:
- any arbitration conducted in the UAE, unless the parties agree that another law should govern the arbitration, provided it is not in conflict with the public order of the state.
- any international commercial arbitration conducted abroad, if the parties chose this law to govern such arbitration.
- any arbitration arising from a dispute in respect of a legal relationship, whether contractual or not, governed by UAE law, unless it is excluded by a special provision.
In addition to Federal Law No. 6 of 2018 on Arbitration, arbitration is also governed by Federal Law No. 11 of 1992 concerning the Civil Procedural Law. The following sections of said code cover the use of arbitration:
- Chapter IV Execution of Foreign judgements- Articles 235 - 238
- Chapter V Execution procedures - Articles 239 - 243
Arbitration
Considering the UAE is a major trading hub and a host country for foreign investment, arbitration is becoming an optimal method, for parties to solve their commercial disputes.
Many foreign investors prefer to assign their disputes to arbitration committees for many reasons such as:
- to avoid long process of commercial disputes reviewed by courts of law
- to avoid controversial international laws and accordingly save time, money and efforts which would otherwise be spent on many sessions at the courts of law
- the lack of precedent doctrine in the UAE which makes the result of disputes somehow uncertain
- the fact that the court proceeding is conducted in Arabic.
The arbitrator's decision is viewed as a settlement having the power of execution once being acquired by the court of law concerned.
In 2012, on an average, 57 per cent cases were settled through alternative methods.
Refer to mediation.
In addition to the above, a number of specialised federal courts were established to handle special types of cases. Some of them are:
- information technology courts
- consumer protection courts
- trans-border crimes courts
- state security court.
Key arbitration institutions
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 Dubai International Arbitration Centre (DIAC) which replaced the former Centre for Commercial Conciliation and Arbitration.
Read the DIAC Arbitration Rules, 2022.
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
