KHALEEJ TIMES, Wednesday, May 16, 2018 | Shaaban 29, 1439
UAE set to be global arbitration hub
has unveiled the long-anticipated new 'Federal Arbitration Law' that will go a
long way to consolidating the country's position as the most attractive hub for
arbitration in the Middle East and North Africa region, legal experts said.
The new legislation issued by President His Highness Sheikh Khalifa bin Zayed Al
Nahyan repeals the former law governing arbitration in the UAE.
"The much-awaited self-standing arbitration law of 61 articles, which is based
on the United Nations Commission on International Trade Law [UNCITRAL] Model
Law, will significantly revamp UAE arbitration law. The new law is expected to
build the UAE's reputation as a preferred seat for international arbitration in
the region since it is aligned with international best practices and standards,"
said Al Tamimi & Company news alert.
"As one of the most significant and anticipated law reforms of recent times, the
Federal Law No. 6 of 2018 on Arbitration in Commercial Disputes is welcome news
for the UAE and was greeted by businesses and the international arbitration
community," according to Maria Mazzawi and Bill Smith, arbitration experts at
Pinsent Masons, the law firm behind Out-Law.com.
"This new law will have a positive impact on both domestic and foreign
businesses, while encouraging even more foreign direct investment into the UAE,"
"Businesses already operating in the region will benefit from further
reassurance should any disputes arise as the new law provides greater certainty
of outcome within a recognised international framework for conflict resolution.
The new law will come into effect 1 month after it is published in the Official
Gazette, which is expected to happen shortly," said Smith.
"Thought to be imminent since the UAE acceded to the 1958 New York Convention in
2006, the Federal Arbitration Law is based on the internationally accepted
UNCITRAL Model Law, which has been adopted in 111 jurisdictions across 80
states," Smith commented in a newsletter.
He said the countries that have adopted the 'Model Law' are commonly perceived
to be arbitration-friendly jurisdictions.
"The modernisation of the law governing arbitration in the UAE and its
harmonisation with international standards and the New York Convention, to which
the UAE is a signatory, will be greeted enthusiastically by businesses and the
international arbitration community," legal experts said.
The new arbitration law is "a very exciting development" for the whole of the
UAE. "While the state has developed a reputation as the pre-eminent seat in the
Middle East for arbitration, it did risk falling behind other nations who have
introduced comprehensive new laws. That issue has now been addressed and I am
sure the new law will help cement the UAE's position in the global arbitration
market," said Craig Shepherd, head of the Global Contentious Construction
Practice at Herbert Smith Freehills and head of the Dubai Dispute Resolution
team, in a legal note.
The UAE Minister of Economy Sultan bin Saeed Al Mansouri will coordinate with
the arbitration institutions in the UAE in order to issue a charter on the
professional conduct of arbitrators.
Major changes in the new law compared to the previous law include the
recognition of arbitration agreements made by modern communication methods, such
as e-mail as well as the recognition of the competence-competence principle with
arbitrators given the power to decide their own jurisdiction.
The law also permits preliminary orders and interim measures and ensures that
enforcement is not automatically stopped if there is a challenge to an award.
Under the new law, arbitrators are now empowered to award costs. There is a
provision made for joinder of parties to arbitral proceedings. Under the new
law, arbitral proceedings and the award are confidential unless the parties