MARKET COMMENTARY 23
(i) Swearing of the Oath Article 211 of the CPC requires that all witnesses swear an oath before the tribunal prior to giving evidence. In the now infamous Bechtel case 4 , the Dubai Court of Cassation determined, in annulling a domestic award at the ratification stage, that the oath givenmust be religious, in the formprescribed for court hearings at article 41(2) of Federal Law (10) of 1992, the Evidence Law. The oath reads 5 : “I swear by Almighty God that I shall tell the whole truth and nothing but the truth”. There is no scope for a secular affirmation or declaration, and failure of the arbitrator to follow the mandatory oath-taking procedure is a ground to set aside the arbitral award. The Draft Lawattempts to redress this issue at Article 34. Whilst witnesses are still to be placed under oath before presenting evidence, the oath is to be “in accordance with the formula prescribed by the tribunal”. Ostensibly, secular affirmationwill be permittedwith the tribunal’s consent and a party’s ability to rely on a deviation from the oath-taking procedure under the Evidence Law in order to resist an award should be eliminated. (ii) Issuance of the award at the place of arbitration CPC Article 212(4) provides that arbitral awardsmust be “rendered in the UAE”. Courts have interpreted this provision tomean that domestic awardsmust be physically signed by tribunals in the state. Thismeans that tribunal members of a UAE seated arbitrationwho reside outside the jurisdiction must travel to the UAE to sign the award. Inevitably, additional costs will be incurredwhich the parties have to pay and awards can be delayedwaiting for a busy tribunal to have availability to travel. If this requirement is overlooked, the awardmay be annulled under the current law. In contrast, the Draft Lawmakes no reference to the place inwhich an awardmust be rendered, which suggests that awardsmay be valid if signed outside of the UAE. IF YOU’RE GOING TO DO IT, DO IT RIGHT The Draft Lawmaintains some provisions of the CPCwhich some practitioners regard as contravening efforts to enact amodern arbitral framework by allowing parties to continue to rely on procedural technicalities to seek annulment of awards. In particular, it appears under the Draft Law that an award debtor may still seek annulment on the basis that: (i) the individual who signed the arbitration clause on behalf of a company lacked the special authorisation as required by CPC Article 58(2) to do so. The Draft Law is silent on the authorisation required to enter into an arbitration agreement on behalf of a third party, save that under Article 5(1) the signatorymust have the requisite “capacity to dispose of his rights”. This is similar to the current wording at Article 203(4) of the CPC, which the Courts have interpreted tomean that the signatorymust possess a special power of attorney or be named in the articles of association as the personwith the authority to bind the company to arbitration. In recent years it has become customary for an award debtor to resist enforcement of awards on the basis that the individual that signed the arbitration agreement on its behalf did not have the requisite special authority to do so, putting the onus on the enforcing party to try and prove the authority of the award debtor’s signatory. 6
(ii) the tribunal did not sign each page of the award. Article 41(2) of the Draft Law states that “the arbitrators shall sign the award”.
Similar terms in the CPC have been interpreted by the Courts as requiring the arbitrators to sign each page of the award (including the reasoning), failing which the awardmay be annulled. This does not reflect international practice and should be clarified in the final version of the law. (iii) the awardwas not renderedwithin the time prescribed for its issuance. Article 43 of the Draft Lawprovides a long-stop date of eighteenmonths, calculated from the date of commencement of the proceedings, for a tribunal to issue an award unless otherwise agreed by the parties. Pursuant to Article 52(7), an award rendered after the long-stop date andwithout the parties’ agreement may be annulled. This reflects generally Article 210 of CPCwhich requires tribunals to render awards within sixmonths from the “first arbitration session”, unless otherwise agreed, failing which the awardmay be annulled. Given the nature and complexities of some commercial arbitrations, even a turnaround period of eighteenmonths can be unrealistic and there can be no guarantee of proving the agreement of the parties. This article should be clarified in the final version of the law to ensure that in international arbitrations provisions of institutional rules or the like shall prevail. CONCLUSION The sentiment amongst most practitioners is that if a comprehensive federal arbitration law is to be enacted in the UAE, it should aim to conform to international standards and practice, and ought to address all deficiencies, particularly those highlighted in this article. The welcome fact, however, is that progress is beingmade in the UAE to enact amodern arbitral framework that accords with international best practice. And, whilst the Draft Lawmay not address all concerns or eliminate outright parties’ ability to challenge enforcement onminor procedural irregularities, there is hope that the final draft might.
A version of this article was first published in the Kluwer Arbitration Blog, August 2014.
2 “Court(s)” in this article refers to the Federal and local Emirate courts outside the Dubai International Financial Centre. 3 Construction Company International v Ministry of Irrigation of the Democratic Republic of the Sudan , Dubai Court of Cassation, Case No. 156/2013, judgment dated 18 August 2013. 4 International Bechtel v. Department of Civil Aviation of the Government of Dubai , Dubai Court of Cassation, Case No. 503/2003, judgment dated 15 May 2005. 5 All excerpts of UAE legislation are unofficial translations of the official Arabic text. 6 The author (and probably most practitioners and arbitrators) considers that this is an issue in any event which ought to be dealt with as a jurisdictional point at an early stage of arbitration and that a failure to do so should at least amount to a waiver.
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