Corporate Law - Assignment4

UNIVERSITY
Arbitration
Recognition and Enforcement of
Foreign Arbitral Awards in UAE
Student Credentials
2/8/2020

Corporate Law 1
Recognition and Enforcement of Foreign Arbitral Awards in UAE
Introduction
Arbitration in general sense is a way to resolve disputes. There are various other ways as well
to do so, but most of the corporates and other people prefer opting for it whenever disputes
arise. Since, this procedure is quite easier to go ahead with and also cost efficient when
finances are concerned. Since, the regular court proceedings are quite long and consume a lot
of time and energy, people tend to find ways to reduce that time and which is why arbitration
is beginning to gain popularity amongst people1.
In the country of UAE or the United Arab Emirates, the Act in relation with Arbitration came
into existence in the year 2016, 16th June. Though there were prior laws related to arbitration
as well according to which the arbitration in UAE was carried out before the introduction of
this Act. There has been a rise in the arbitral practices throughout the world which is why; the
government of UAE felt the need for introducing an Act related to arbitration in order to
facilitate the citizens as well as lower the pressure on the courts of UAE2. The Federal
Arbitration Act or which is widely known as the FAA has been long –awaited or being
planned upon. It is basically based upon the idea of the known model law which is the
UNCITRAL. This ensures the application and effectiveness of the Act as most of the
countries have already adopted it; this law is applied in more than 111 jurisdictions
throughout the world3. This discussion below talks about the need for arbitration in the
country and the way international arbitration has influenced the markets of UAE. The
enforcement procedures and all the recognition everything has been covered in this
1 Tony Cole and Pietro Ortolani, Understanding International Arbitration (Routledge 2019).
2 Soraya Corm-Bakhos and Gordon Blanke, 'Recognition And Enforcement Of Foreign Arbitral Awards In The
UAE: Practice And Procedure' (2014) 1 BCDR International Arbitration Review.
3 Stephenson Harwood, 'Effect On The Enforcement Of Arbitral Awards In The UAE' (Shlegal.com, 2019)
<https://www.shlegal.com/news/effect-on-the-enforcement-of-foreign-arbitral-awards> accessed 14 February
2020.

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discussion. Small details relating to the kinds of awards and even the arbitration institutes are
being covered under this. Alongside the enforcement and the recognition as well have been
talked about also4.
What is Arbitration
Arbitration is a procedure that works according to the convenience of parties involved.
Instead of going to the court with the dispute, the parties opt to proceed with arbitration as it
is much more convenient and efficient than the long and tedious trial at a court. In this
procedure, the submission of dispute is done to an arbitrator or the set of arbitrators by the
agreement of parties. These arbitrators then decide upon the matter and this decision is then
binding on both the parties5. The main characteristics of arbitration include; consent of both
the parties, the arbitrator that is going to take decision in their dispute is also decided upon by
the parties themselves, the process of arbitration is neutral and not biased towards any
particular party, It is a confidential procedure, hence, no important information is leaked
especially in cases where trade secrets are involved, also one of another very important
element in this case is that the arbitration procedure is final and easily enforceable by the
authorities. These decisions given by the arbitrators that are also known as the Awards are
legally binding to both the parties6.
Arbitration Institutes in UAE
There are several governmental institutes in UAE that facilitate the arbitration procedure so
as to make things easy for the citizens. One such major Institutes is the Dubai International
Arbitration Centre or widely known as the DIAC. This institute is one of the busiest centres
for arbitration in the Gulf area and the default language here is English. It has been working
4 At 1
5 David Horton, 'Arbitration About Arbitration' (2018) 70 Stanford Law Review.
6 Margaret L Moses, The Principles And Practice Of International Commercial Arbitration (Cambridge
University Press 2017).

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based upon the DIAC Arbitration Rules 20077. Most of the Arbitration Centres have been
resolving cases according to these rules throughout the years as well. Another major
arbitration institute that needs to be discussed here is the DIFC- LCIA Arbitration Centre.
This arbitration centre was established in association with the LCIA or the London Court of
International Arbitration in the year 2008. Here in this court, the rules that are being used are
the 2016 introduced, DIFC –LCIA Arbitration Rules. These rules are majorly based upon the
Rules of Arbitration by the LCIA or the London Court of International Arbitration. This
Arbitration Centre is quite independent of the Dubai International Financial Centre Court,
though all the awards declared here are confirmed or enforced through the court of DIFC
only8. Though another institution that here needs recognition is the ‘Sharjah Tahkeem’ or the
Sharjah International Commercial Arbitration Centre which was established in the year 2009.
This arbitration centre came into existence with the help of the Sharjah Chamber of
Commerce and Industry and currently holds its place in the Emirate of Sharjah. Here the
Arbitration rules used are currently in its second edition. Apart from all these Institutions
there are various other arbitration centres in the country which help or assist with the whole
procedure of arbitration9.
Arbitration in UAE
Currently, the new law in UAE which is the ‘FAA’ has replaced certain Articles of the UAE
Civil Procedure Code or the CPC. Specifically, when this replacement is talked about,
7'Idias - Rules Of Commercial Conciliation And Arbitration' (Diac.ae, 2020) <http://www.diac.ae/idias/rules/>
accessed 12 February 2020.
8 Saakidhya Manohara, Susie Abdel-Nabi and Salma Hajhusein, 'Enforcement Of Judgments And Arbitral
Awards In The United Arab Emirates: Overview' (Content.next.westlaw.com, 2019)
<https://content.next.westlaw.com/Document/I0511e76274da11e598dc8b09b4f043e0/View/FullText.html?
contextData=(sc.Default)&transitionType=Default&firstPage=true&bhcp=1> accessed 14 February 2020.
9 Daniel Brawn and Maria Palmou, 'International Legal Business Solutions - Global Legal Insights' (GLI -
Global Legal InsightsInternational legal business solutions, 2019)
<https://www.globallegalinsights.com/practice-areas/international-arbitration-laws-and-regulations/united-arab-
emirates> accessed 11 February 2020.