New Arbitration Law based on the UNCITRAL Model Law has been approved by UAE parliament. Experts do not expect any more in-depth talks about its contents.

The Cabinet of Ministers will make a final review of the new Uae Arbitration Law and, afterwards, it will enter into force once the Supreme Council and Sheikh Khalifa Bin Zayed Al Nahyan sign it.

According to the studies, the law will replace the country’s Civil Procedure Law, which has been in place since 1992 and has a number of pitfalls. Once passed, it will serve as the final piece to the country’s buoyant Arbitration landscape. Although some laws have stalled in the past, practitioners believe that the new UAE arbitration law will pass this year. Some say perhaps before Ramadan, which starts on 16 May this year.

Important Features

Previous drafts were open for discussion and feedback from the local legal community. They include narrow grounds to challenge an award and quicker procedures to enforce awards in local courts. Also, if a court sets aside an award, the underlying arbitration agreement survives. This means a party can start new proceedings without submitting to a local court’s jurisdiction.

Expectations from final draft

Insiders consider the new UAE arbitration law to be a very good draft law. Some of the expectations are –

• Most expect up-to-date features in final draft as found in other national laws around the world.
• Many also believe the law will apply in all cases in the UAE except for those seated at the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM).
• The latter, which are offshore free zones, already enjoy different rules under a common law framework.
• The new UAE arbitration law will distinguish between offshore and onshore seats in order to ensure harmony.

Issues

In 2017, a government resolution amended the applicable professional code to only allow UAE lawyers to appear in onshore cases. After practitioners exchanged criticisms with the UAE Ministry of Justice, the Dubai government issued a letter confirming that foreign lawyers can appear in arbitrations seated in Dubai. It remains to be seen, however, whether other Emirates will follow suit.

The UAE has yet to undo a controversial penal code amendment from October 2016. The change, which chilled arbitrators from accepting arbitrator appointments in the UAE, indicated that arbitrators could be imprisoned for showing biasness. In addition to the fear of prosecution, the amendment states that officers will seize an individual’s passport during a pending investigation.

Some critics believe the new UAE arbitration law will excite arbitrator “due process paranoia,” which parties may abuse to delay a case moving forward. The UAE Government has reportedly agreed to modify the 2016 amendment in an effort to preserve the country’s status as a go-to seat for arbitration. However, the reform process may be long and complex.

To learn more, you can get in touch with Aceris Law’s Dubai Arbitration Lawyers Desk. Their dedicated team of lawyers at Aceris Law, accompanies clients involved in arbitrations concerning Dubai, i.e., where a contract is executed in Dubai, a dispute is brought by or against a party in Dubai, or a Dubai public entity is involved. For more information, visit https://www.acerislaw.com.