Dr Habib Al Mulla Chairman of DIAC s Board of Trustees
v Strong tradition of private out of court dispute resolution dating back thousands of years. The Prophet Mohammed (PBUH) arbitrated disputes and even used "takhim" (the Arabic word for arbitration) Fears that arbitration is a European or Western process, not suited to (or not trusted for) the settlement of disputes in the Region
UAE s economic growth comes hand in hand with political stability (strong united Federation since 1971) recent publication by the Brooking Institute (which ranks the economic performance of the world s largest 300 metropolitan economies) stated that Dubai has secured its place as one of the top 5 fastest growing cities in the world in 2014 GCC is home to some of the largest sovereign wealth funds, including the UAE s Abu Dhabi Investment Authority, Saudi Arabia s SAMA Foreign Holdings and Kuwait Investment Authority adopted an open economic policy with minimal governmental control and private sector regulation in order to attract foreign investment (with the exception for oil companies and foreign banks, all other types of businesses in Dubai do not pay any taxes on corporate profits nor on personal income) Dubai has shifted its economy from an oil and gas dependent to a diversified economy (based on international trade, banking, construction, real estate, manufacturing and tourism) Dubai is considered one of the world s largest import and export centers, after Hong Kong and Singapore. Given its rich history in trade and its geographical location, Dubai is considered as a gateway to connect with the emerging markets of Asia, the Middle East and Africa
UAE alone there are 7 arbitration centres: Dubai International Arbitration Centre (DIAC), DIFC-LCIA, Abu Dhabi Commercial Conciliation and Arbitration Centre, Sharjah International Commercial Arbitration Centre, Ras al Khaimah Centre of Reconciliation and Commercial Arbitration, Ajman Commercial Conciliation, Emirates Maritime Arbitration Centre Bahrain: Bahrain Chamber for Dispute Resolution in partnership with the American Arbitration Association (BCDR-AAA) Kuwait: Commercial Arbitration Centre of the Kuwait Chamber of Commerce and Industry (KCAC) Oman: only a member of the GCC Commercial Arbitration Centre (constitution issued by virtue of a resolution adopted by the Supreme Council of the GCC states of the Arabian Gulf States during its 14th session held in Riyadh on 22 December 1993) Qatar: Qatar International Center for Conciliation and Arbitration (QICCA) Saudi Arabia: Saudi Center for Commercial Arbitration
431 440 379 310 174 177 110 2010 2011 2012 2013 2014 2015 2016
Bahrain, Egypt, Jordan, Oman and Syria all have arbitration laws influenced by the UNCITRAL Model Law Saudi Arabia enacted a new arbitration law in 2012 UAE is considering a new (hopefully Model Law based) arbitration law, although the gestation period has been considerable
In 2011 a UAE court recognised and enforced a foreign award under the New York Convention (the decision was rendered by the Court of First Instance in Fujairah, one of the seven Emirates of the UAE) Since the 2011 decision, there have been a number of other examples of the UAE courts enforcing foreign awards (including in circumstances where the awards and/or subsequent enforcement were contested)
e.g., the Court of Cassation delivered an unequivocal ruling that foreign arbitral awards will be enforced in Dubai in accordance with the UAE s international treaty obligations under the New York Convention. In support of its views, the court noted that the Articles of the Civil Procedure Code upon which the loosing party relied were not relevant in the context of the enforcement of a foreign arbitral award and that such provisions should only be applied to awards rendered in the UAE (Airmech v Macsteel International)
offshore financial free zone legal jurisdiction: independent judicial system with its own substantive civil and commercial laws inspired by common law geographically located in Dubai
recognition and enforcement of arbitral awards seated outside the DIFC: Banyan Tree Corporate Pte Ltd v Meydan Group LLC (CA-005-2014), DIFC Court of Appeal, November 3 2014) the DIFC Court of Appeal confirmed its jurisdiction as a UAE court and its right to recognise and enforce awards seated in onshore Dubai within the DIFC, notwithstanding the absence of any connection with the DIFC (including any assets in the DIFC against which the award could be enforced at that time), and with the knowledge that the award creditors would seek to enforce the DIFC court's order in onshore Dubai
new arbitration centres and case numbers are increasing as a result of increased use of arbitration by Arab parties updated statutory regimes to support arbitration is there a case for a uniform arbitration law across the Gulf Cooperation Council (GCC) States? national courts recognising and enforcing arbitral awards support for arbitration in the Shari'a principles that underpin the legal systems in almost all Arab states arbitration friendly and specialized free-zone courts (Dubai International Financial Centre)
uncertainty of public policy (the "Unruly Arabian Horse"), once you are astride the unruly animal you never know where it will carry you as some GCC courts still appear quick to rely on public policy as a reason to defeat an arbitration clause arbitral awards not being enforced for minor procedural defects e.g., witness not giving evidence under oath, a copy of the arbitration agreement not being appended to the award, or the award not being issued in the name of the local Emir, etc. lengthy and burdensome procedure to enforce arbitral awards, if successful, before the various layers of local courts
continuous education and capacity building of arbitration users and the local judiciary creation of specialized local courts dealing only with arbitration matters as in France, Switzerland, etc. need for strong arbitration friendly laws need for Islamic based arbitration and growth in Islamic finance is likely to see an increased demand for arbitrators versed in Islamic principles and arbitral centres and rules that can deal with Islamic finance and arbitration (spearheading, the i-arbitration Rules at the Kuala Lumpur Regional Centre for Arbitration (KLRCA) and soon DIAC!) proliferation of arbitration centres: a good or a bad thing? competition from international arbitration centres: impact on development of local centres full case administration could be done online? Still need for physical facilities and staff?
Many challenges remain. However, the future for arbitration in the GCC looks promising and certainly dynamic.