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Brief Remarks Concerning the New Arbitration Law in the UAE (Federal Law No. 6 of 2018)

Sara Corradi

Author: Sara Corradi
Senior Lawyer.

Guiding Principle

Finally, after a long wait, the UAE has issued a new Arbitration Law, the Federal Law No. 6 of 2018, in accordance with the provisions of the Arbitration Chapter in the UAE Civil Procedures Federal Law No. 11 of 1992 and its adherence to the New York Convention in 2006.

A. Key Points of the New Arbitration Law
The new Arbitration Law covers all the key points regarding the subject of arbitration law. Below is a short summary of these key points:

I. Scope of Application, Article 2.
The new regulation shall apply to any arbitration conducted in the UAE unless the parties have agreed that another law should govern the procedure, provided there is no conflict with the public order and morality of the state. Likewise, the law shall apply to any international commercial arbitration conducted abroad if the parties have chosen this law to govern their procedure.

II. Capacity to enter into an Arbitration Agreement, Article 4.
An Arbitration Agreement may only be concluded by a natural person having the legal capacity to dispose of his rights or on behalf of a juridical person by a representative with specific authority to arbitrate.

III. A Written Arbitration Agreement Article 7.
An Arbitration Agreement shall be in writing; otherwise, it shall be void. There is also a list of situations in which the written form is deemed.

IV. Composition of the Arbitral Tribunal, Article 9.
The Arbitral Tribunal consists, by agreement of the parties, of one or more arbitrators. Where the parties have not agreed on the number of arbitrators, their number shall be three, unless otherwise decided by the concerned body. The number of arbitrators, if several, shall be uneven, otherwise the arbitration is void.

V. Interim or Conservatory Measures, Article 21.
The Arbitral Tribunal may, at the request of a party or on its own motion, order any party to take such interim or conservatory measure as the Arbitral Tribunal may consider necessary given the nature of the dispute. This shall include, in particular:

  • an order to preserve evidence that may be relevant and material to the resolution of the dispute;
  • taking necessary measures to preserve goods which constitute part of the subject-matter of the dispute such as an order to deposit goods with a third party or to sell goods which are susceptible to damage;
  • preserving assets and funds out of which a subsequent award may be satisfied;
  • maintaining or restoring the status quo pending determination of the dispute; and
  • an order to take action that is likely to cause, current or imminent harm or prejudice to the arbitration process itself.

VI. Determination of Rules of Procedures, Article 23.
The parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting the proceedings, including their right to subject such procedure to the rules in force of any arbitration association in the state or abroad; where there is no agreement to follow specific procedures, the Arbitral Tribunal may adopt the procedures it considers appropriate.

VII. Place of Arbitration, Article 28.
The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the Arbitral Tribunal having considered the circumstances of the case, including the convenience of the parties. The Arbitral Tribunal may – unless otherwise agreed by the parties – hold arbitration hearings at any place it considers appropriate to conduct any of the arbitral proceedings, while providing the parties sufficient advance notice of the hearing, and may also hold Arbitration hearing with the parties and deliberate by modern means of communication and electronic technology. The Arbitral Tribunal shall deliver or communicate the minutes of hearing to the parties.

VIII. Language of the Arbitration, Article 29.
Arbitral proceedings shall be conducted in Arabic unless otherwise agreed by the parties.

IX. Power of the Court to Act on a Request for Evidence, Article 36.
The Arbitral Tribunal may, on its own motion or if a party so requests, request from the Court assistance in taking evidence. The Court may execute the request within its competence, ordering witnesses to appear before the Arbitral Tribunal in order to give oral testimony or adduce documents or any evidentiary materials. The request shall be made to the Chief Justice of the Court who may take any of the following decisions:

  • to order sanctions prescribed by the laws of the state against any witness who fails to appear or answer questions without lawful excuse;
  • to direct a third party to produce documents in its possession which are essential for deciding the dispute; and
  • to order a rogatory commission.

X. Binding Force, Article 52.
An Arbitral Award shall constitute res judicata, and shall be enforceable as a judicial ruling, although to be enforced, a decision confirming the award must be obtained from the Court.

B. The Impact of the New Regulation
The new Arbitration Law provides a new arbitration system being extremely helpful in encouraging international business and in solving complex business disputes in the greater MENA region.

This UNCITRAL-based Arbitration Law would align the UAE with the international standard and would bring the UAE towards the road to becoming an international centre for commercial arbitration.

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