What has happened?
On 1 February, arbitrateAD officially opened its doors, accompanied by the publication of its Rules. This marks a significant milestone in the provision of arbitration services in the region.
Where is arbitrateAD located?
arbitrateAD has promised state of the art arbitration facilities. We understand that they will be located in the Abu Dhabi Global Market (ADGM).
Are there any notable features of arbitrateAD?
arbitrateAD is a has a range of modern rules and processes. Perhaps the most interesting features for businesses:
ADGM is the default “seat”: To recap, the “seat” of an arbitration is the legal location where the arbitration is based. Put another way, it determines which country’s laws apply to the arbitration process. If an arbitration agreement does not identify the seat, it will default to the ADGM.
Court of Arbitration: arbitrateAD will be overseen by its own court, consisting of high-profile local, regional and international practitioners. The Court’s main functions include:
o Appointing and replacing arbitrators;
o Resolving challenges to arbitrators; and
o Scrutinising awards before publication.
Emergency arbitrations are available: Emergency arbitration is a procedure that allows parties to obtain urgent interim relief before the main arbitration proceedings get underway. This is particularly useful in situations where immediate action is needed to prevent irreparable harm, preserve assets, maintain the status quo, or address any situation that cannot wait for the formation of a full arbitration panel.
Expedited arbitrations for lower-value disputes: arbitrateAD’s expedited proceedings apply to disputes valued under AED 9m (c. US$2.45m) and must conclude within four months (or six months with an extension). These cases are resolved by a single arbitrator, who has the authority to decide the case without a traditional hearing.
Technology: Tribunals are free to conduct the arbitration using a range of technology including holding virtual hearings.
Should I use an arbitrateAD clause in my contracts?
arbitrateAD is a positive development for arbitration in the region, giving businesses a wide range of modern and user-friendly arbitration centres to choose from.
That said, it's still uncertain how arbitrateAD will stack up against other local and international options. Because picking the right arbitration clause depends on the specific situation, we advise businesses to get professional guidance before deciding.
My contracts refer disputes to the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC). What now?
From 1 February 2024, any new arbitration cases will be handled by arbitrateAD by default. However, to use arbitrateAD’s expedited or emergency arbitration procedures, all involved parties need to agree.
Arbitration cases already with ADCCAC will stay there.
Should I consider replacing my ADCCAC arbitration clause?
In theory, businesses don't have to change their ADCCAC clauses since arbitrateAD will handle all ADCCAC disputes filed after 1 February 2024 automatically. But there might be problems later, especially if a party challenges the switch to arbitrateAD, either directly or indirectly.
We therefore suggest that businesses take a closer look at their ADCCAC clauses and get advice on their best course of action.