What has happend?
In September 2023, the UAE Ministry of Justice passed a law which amends the Federal Arbitration Law, which has been in place since 2018.
Recap: What is Arbitration?
Arbitration is a legal process that serves as an alternative to going to court, offering a more private, often quicker, and sometimes less expensive way to resolve disputes. In arbitration, the disputing parties agree to present their case to a neutral individual (an arbitrator) who has the authority to make a binding decision on the matter.
Unlike a court judge, an arbitrator is typically an expert in the specific subject matter of the dispute. Once both parties agree to abide by the arbitrator’s decision, called an “award,” it is generally final and enforceable by law, leaving limited opportunity for appeal.
Arbitrations are becoming increasingly common in the UAE, and this is reflected by the evolution of the local legal framework and arbitration institutions.
What are the amendments?
The amendments are limited, but nevertheless important. Those most likely to interest clients are:
Virtual proceedings – Arbitration hearings may be held virtually, and arbitral institutions must ensure the availability of technology to allow parties to attend virtually. This reflects the growing demand for virtual dispute resolution in a post-pandemic world.
Arbitrator independence – The rules on arbitrator independence have been relaxed and tightened at the same time.
Individuals who are personally connected to the body administering the arbitration (for example the Dubai International Arbitration Centre) cannot sit as an arbitrator unless certain conditions are met.
Individuals who are personally connected to any of the parties, and that relationship could affect their independence, are also prohibited.
“Document only” hearings – Arbitrators can now decide whether to hold a hearing on the basis of documents only (rather than a combination of documents and witness testimony).
Our view
The endorsement of fully virtual arbitrations is a welcome evolution, particularly for those seeking to resolve international disputes in a manner which maximises time, cost, and environmental impact.
The remaining amendments reflect the UAE’s commitment to sustaining a modern, agile arbitration infrastructure that is consistent with global best practices. However, parties should be aware of the rules on arbitrator independence; a failure to comply could render any arbitration award invalid.
This material is provided for general information only. It does not constitute legal or other professional advice. For more information contact Nathan Hooper, Principal at Support Legal: nathan.hooper@supportlegal.com