INTERNATIONAL ARBITRATION 1/3LY
THE B I R TH OF A NEW U A E F EDER A L A RB I T R AT I ON L AW – A LONG AND DIFF ICULT L ABOUR
A RB I T R AT I ON AWA RDS IN T HE U A E
FOREIGN ARBITRAL AWARDS Book III, Part I, Chapter 4 of the CPC provides for execution of foreign judgments and orders, and applies to foreign arbitration awards pursuant to Article 236. By Article 238 the rules enacted in Chapter 4 are without prejudice to the provisions of treaties between the UAE and other countries. The Convention is not expressly identified in CPC Article 238 because the CPC came into force before the UAE became a signatory. However, the Convention, now in force in the UAE, is to be applied to the enforcement of foreign arbitral awards as a treaty obligation of the UAE to the exclusion of local laws. Despite this there have been difficulties with enforcement of foreign awards in the state in some cases, although the Courts 2 have applied the Convention in others. These difficulties arise primarily from the Courts’ willingness to entertain arguments to set aside foreign awards on grounds that they do not meet the (non-Convention) requirements of the CPC. Recent Court of Cassation judgments havemade clear that the provisions of the CPC have no application in the enforcement of foreign arbitral awards in the UAE and that only the relevant international convention is to apply. There have been, however, occasional setbacks, as recently demonstrated in the case of CCI v Sudan. 3 Here the Dubai Court of Cassation held that enforcement of Convention awardsmay be refused for lack of jurisdictionwhere the award debtor does not have a domicile or place of residence in the UAE or where the case is not related to an obligation carried out in the jurisdiction. Though this case is generally considered an outlier by practitioners, there is no doctrine of binding precedent in the UAE and the Courtsmay, therefore, in some instances, continue to apply the CPC to refuse recognition or enforcement of a foreign arbitral award. The Draft Law seeks to eliminate any lingering uncertainty. Article 52 of the Draft Law incorporates Article V of the Convention, stipulating that it is to be applied to “arbitration awards” in the state. No distinction is drawn between foreign and domestic awards. DOMESTIC ARBITRATION AWARDS In assessing whether to ratify or annul a domestic arbitral award, the CPC does not permit the Courts to reconsider themerits of a tribunal’s findings but rather directs that decisions be taken on procedural grounds. Procedural irregularities, however trivial, have therefore always been used and continue to be used by award debtors as a basis for resisting domestic arbitral awards. To combat this trend, the Draft Lawattempts to limit parties’ ability to raise procedural irregularities at the enforcement stage. Two prominent examples of technicalities cured by the Draft Laware excluding the need for witnesses to swear a religious oath and for arbitrators to sign awards whilst being physically present in the UAE.
WRIT TEN BY JESSIK A STADWICK, A SSOCIATE AT CLYDE & CO
Enactment of a federal arbitration lawhas been “imminent” since the United Arab Emirates acceded to the New York Convention in 2006 (the Convention). Once enacted, it is expected that the federal lawwill repeal Articles 203 to 218 of Federal Law (11) of 1992, the Civil Procedure Code (CPC), which currently govern arbitration in the state. Several drafts of a proposed federal arbitration lawhave been released over the years by theMinistry of Economy, themost recent of whichwas in 2013 (the Draft Law). This version (as with themajority, but not all, of its predecessors) is based on the UNCITRAL Model Law, but retains some provisions of the CPC. Whilst enactment of a federal arbitration law is regarded as necessary, the Draft Lawhas not beenwell received by some practitioners. Dissenters consider that the continued inclusion of certain provisions of the CPC in the Draft Law does not accord with international best practice, which is detrimental to ongoing efforts to change the general perception that the UAE is an unpredictable jurisdiction for the enforcement of arbitral awards. This article considers where the Draft Law appears to have got it right, and provisions whichmay warrant further thought.
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