Out-Law / Your Daily Need-To-Know

UAE Federal Law on Commercial Arbitration is issued

14 May 2018, 12:03 pm

ANALYSIS: The Al Eqtisadi has reported that The Federal Arbitration Law has been issued in the United Arab Emirates (UAE). The law will come into force one month after it is published in the Official Gazette.

The report said that UAE president Sheikh Khalifa bin Zayed Al Nahyan has issued the Federal Law No. 6 of 2018 on Arbitration in Commercial Disputes.

The introduction of the Federal Arbitration Law is one of the most significant law reforms to be undertaken by the UAE Government in recent times. Thought to be imminent since the UAE acceded to the 1958 New York Convention in 2006, the Federal Arbitration Law is based on the internationally accepted UNCITRAL Model Law, which has been adopted in 111 jurisdictions across 80 states. The countries that have adopted the Model Law are commonly perceived to be arbitration friendly jurisdictions. The modernisation of the law governing arbitration in the UAE, and its harmonisation with international standards and the New York Convention, to which the UAE is a signatory, will be greeted enthusiastically by businesses and the international arbitration community.

The Federal Arbitration Law expressly repeals the former law governing arbitration in the UAE, contained in only 15 articles of Federal Civil Procedure Code No. 11 of 1992. Other major changes include:

the recognition of arbitration agreements made by modern communication methods, such as email;
the recognition of the competence-competence principle, arbitrators have the power to decide their own jurisdiction;
that preliminary orders and interim measures are expressly permitted;
that provision is made for joinder of parties to arbitral proceedings;
that arbitral proceedings and the award are confidential unless the parties agree otherwise;
that arbitrators are now empowered to award costs;
that enforcement is not automatically stopped if there is a challenge to an award.

The enactment of the new Federal Arbitration Law is welcome news for the UAE, and will go a long way to consolidating the UAE's position as the most attractive hub for arbitration in the Middle East and north Africa region.

The new Federal Arbitration Law will be effective from the date the Federal Law comes into force.

The UAE commercial arbitration law came into force on 16 June 2018 as outlined in our news report.

Bill Smith and Maria Mazzawi are arbitration experts at Pinsent Masons, the law firm behind Out-Law.com.