Arbitration

Enforcement of Local Arbitration Award in the UAE

According to the Civil Procedures Law – Federal Law No.11/1992, which was further amended with Federal Law No.30/2005 with specific chapter named “The Arbitration”, which includes every aspects related to the arbitration between Articles 203 till 218.

As you see that 15 Articles relate exclusively to the Arbitration and you must be aware of it, before we handle any arbitration dispute in UAE.

I have summarized the above in to 6 important points:

First: The legality of the Arbitration.
Second: Appointment of the Arbitrator/s
Third: Arbitration Procedures
Fourth: The Frame of the Arbitration Award
Fifth: The Enforcement OR Void of the Arbitration Award
Sixth: The End Result of the above.

First: The legality of the Arbitration.

The most important points in the legal system which the law requires in the Arbitration are as follows:

  1. The Arbitration Deed/ Contract / Agreement – call it whatsoever – must be in writing.
  2. The subject of the dispute must be clearly mentioned.
  3. Arbitration of irreconcilable matters is inadmissible.
  4. The Arbitration should be between parties who have the right in dispute.

If any of the above is not respected – the Arbitration Award will be considered as null and void.

Second: Appointment of the Arbitrator/s

There are two ways to appoint an Arbitrator/s when a dispute arises:

  1. Amicably between the parties, they will name the authority such as DIAC or a person/s.
  2. If both parties did not name an authority or person to handle the arbitration in the Arbitration Deed or after the dispute arises, they cannot reach to same amicably – then both parties have the right individually, to approach the local court having jurisdiction, and request the court to appoint an Arbitrator/s.
  3. In any circumstances the appointment of Arbitrators should be odd numbers.

If any of the above is not respected – the Arbitration Award will be considered as null and void.

Third: Arbitration Procedures

We can summarize the procedures mentioned in the law for the arbitrators to adhere to, as follows:

  1. If there is one Arbitrator, it is easy for him to follow the procedures. In the event there are more than one Arbitrators, they all must together follow the procedures and sign each procedures they handle together.
  2. If there is no specific duration in the deed of arbitration/s – the Arbitrator/s have to finish the arbitration award within 6 months from the first meeting held in arbitration proceedings. [The party can extend the duration expressly or tacitly – if they have appointed the arbitrator/s amicably – or the court can do the same as per the request from the arbitrator/s – if they were appointed through the court].
  3. The law requires from the arbitrator/s to take any statement from the witness/s under Oath.

If any of the above is not respected – the Arbitration Award will be considered as null and void.

Fourth: The Frame of the Arbitration Award

The law requires in this part the following:

    1. The Arbitration Award should be issued by majority of the Arbitrator/s in writing, attached with the arbitration deed, including the summary of each party with their claims and defense and the award should be Arabic, unless the parties accept to make the arbitration in any other language – once the award is issued, they need to undertake a legal translation of the Award, prior to enforcing same through the courts here – and the Arbitrator/s should date the Award as the law considers his signature on that date.

If the above is not respected – the Arbitration Award will be considered as null and void.

  1. If the Arbitrator/s are appointed amicably, then he will hand over a copy to each party within 5 days from the date he/they sign the arbitration award, but if the Arbitrator/s are appointed by court, he/they have to submit the award to the same court who appointed him/them.

Fifth: The Enforcement OR Void of the Arbitration Award

It is simple to say that we have to take into consideration 2 major points before we go in to details about these aspects:

  1. The Losing party cannot file the null and void case against the Arbitration Award, unless the attestation case for enforcement of the award by the winning party is lodge in court.
  2. According to Article 216 of CPL – it states the reasons to consider an arbitration award as null and void as follows:
    1. If the Award is issued without arbitration deed;
    2. If the Arbitration deed itself was null and void;
    3. If the Arbitrator/s crosses the time-frame of the arbitration deed;
    4. If the Arbitrator/s crosses his scope of duty in the arbitration deed;
    5. If the subject of the dispute is not mentioned in the arbitration deed.
    6. If the award is issued in the absence of any of the parties, without serving summons on them.
    7. If the award is issued by arbitrator/s who are not appointed according to the law.
    8. If the arbitrator/s does not have the capability to issue the award.
    9. If any of the parties of the dispute, does not have the legal capacity to undertake the arbitration procedures.
    10. If the award is invalid or if the procedures in the arbitration are rendered invalid, in a manner that affects the award. – Examples from Supreme Courts: (a)That the arbitration award not signed by the arbitrator/s OR (b)the arbitrator/s took a statement from the witness, without Oath and the award depends on that statement and shows how it affects. One more example from Supreme Court –(c) if one of the party submits documents in the absence of the other party and the Arbitrator/s do not notify the other side with copies of these documents to defend themselves and the award issued depending on the said documents.
  3. By sense and logic – if none of the reasons mentioned above in the CPL to consider the arbitration award as null & void, it means it will be valid and the court will give a decision for enforcement.
  4. It is important to mention that the CPL considers that the acceptance of an invalidation of the award in advance prior to it being issued, this acceptance is null and void itself.

Sixth: The End Result of the above.

We can reach to a conclusion in the end regarding the local arbitration award, as follows:

  1. The award [dispute of the matter] of the arbitrator/s itself, is not a subject to challenge in any stage of court.
  2. The judgment that will be issued by the Court of 1st Instance in the enforcement of arbitration award case and/or null & void case against the award – will be subject to objection before the High Court and Supreme Court, unless the said Arbitration is irreconcilable, then they cannot object and the court of 1st instance judgment will become final.
  3. The estimate of the fees and expenses of arbitration due to the arbitrators shall be left to their discretion, and they shall charge them in whole or in part to the losing party.
  4. The court, at the request of any of the party shall amend this estimate to render it commensurate with the efforts exerted and with the nature of the dispute.