united arab emirates

					      Mena Legal                                                                                                         united arab eMirates




      united arab emirates
      Christian Ule and K Florian Buchler
      Mena Legal



      Litigation                                                             ties have the right to appeal to the Civil Court of Appeal on
                                                                             factual and/or legal grounds within 30 days of the date of judg-
      1   Court system
                                                                             ment. Thereafter, parties may appeal on points of law alone to
          What is the structure of the civil court system?
                                                                             the Court of Cassation, which is usually composed of five judges.
      The United Arab Emirates is essentially a civil law jurisdiction       The appeal must be filed within 30 days of the date the parties
      heavily influenced by the Egyptian legal system, which has its         were notified of the judgment of the Court of Appeal. All deci-
      sources in French and Roman law. The law in the UAE has also           sions of the Court of Cassation are final.
      been influenced by Islamic law codified in the Shari’a, which is
      embodied in the UAE civil and commercial law. Like the codifica-
      tions of other civil law countries, the UAE codes express general      2   Judges and juries
      abstract concepts and rules drawn from Roman law.                          What is the role of the judge and, where applicable, the jury in civil
           The UAE Law of Civil Transactions (No. 5 of 1985) as                  proceedings?
      amended by Federal Law No. 1 of 1987 governs civil transac-            There are no juries in the UAE. Cases are heard in the Court
      tions. In broad terms, the civil law sets out general contractual      of First Instance by a single judge (for claims less than 100,000
      principles and covers certain specific types of business agreements    UAE Dirhams) or a three-judge panel (claims exceeding 100,000
      (for example, construction contracts).                                 UAE Dirhams).
           The UAE Federal Commercial Transactions Law (No. 18 of                The key rule in the UAE Civil Code is that contracts must
      1993), on the other hand, governs commercial transactions and          be interpreted by the judge according to the intentions of the
      relationships between merchants.                                       parties; and intentions and meanings must prevail over words
           In civil matters of procedure, the UAE courts follow the Fed-     and the construction of sentences. Consequently, where there is
      eral Law of Civil procedure (No. 11 of 1992), which sets out           an express provision in the contract, a judge must not imply any
      details for conducting civil cases before the UAE courts, whether      clause or condition varying that express provision. And where
      local or federal.                                                      the wording of a contract is quite clear on a particular point,
           Although there is a federal court structure in the UAE with       the court must not distort such obvious meaning on the pretext
      a final court of appeal in Abu Dhabi (the Abu Dhabi Supreme            of discovering the parties’ intentions. However, when there is
      Court), both Emirates Dubai and Ras Al Khaimah are not part            ambiguity – or when the judge thinks that certain passages in the
      of the federal judicial system. Unlike the other emirates, Dubai       contract (however well written) do not in fact match the clear
      and Ras Al Khaimah have their own court systems, which are not         intention of the parties – then the court must investigate the true
      subject to the Federal Supreme Court.                                  common meaning of the parties, irrespective of the literal mean-
           There are three main branches within the court structure:         ing of the words used in the contract. This investigation must be
      civil, criminal and Shari’a (or Islamic) law. The Federal UAE          carried out: a) in the light of the particular transaction; and b)
      courts, similar to the courts in most of the countries in the Area,    according to (1) the principles of honesty and trust between the
      are organised to form two main divisions, civil and criminal, and      contracting parties and (2) existing customs.
      are also generally divided into three stages of litigation, namely         The UAE Civil Code lays down two other key interpretation
      Courts of First Instance, Court of Appeal and the Federal Supreme      rules: (1) a custom that is applicable among merchants has the
      Court (colloquially referred to as the Court of Cassation). The        same force as an express agreement; and (2) (broadly speaking)
      jurisdiction of the third division, namely the Shari’a courts, which   a debtor should be given the benefit of the doubt.
      initially was to review matters of personal status, was expanded           The writings of Al-Sanhoury (a seminal jurisconsult writing
      in certain Emirates such as Abu Dhabi to include serious crimi-        about the Egyptian code shortly after the Second World War) are
      nal cases, labour and other commercial matters. Important cases        particularly significant when deciding how to apply such con-
      with a security aspect are referred to special courts.                 cepts and rules in individual cases.
           The court structure in Dubai is comprised of the following            Common law principles, such as adopting previous court
      courts: the Court of First Instance, the Court of Appeal and the       judgments as legal precedents, are generally not recognised
      Court of Cassation. The Court of First Instance includes the Civil     although judgments delivered by higher courts are usually applied
      Court, the Criminal Court and the Shari’a Court.                       by lower courts.
           The Civil Court (or Court of First Instance) hears all claims
      ranging from commercial matters (including debt recovery cases)
      to maritime disputes. After judgment has been delivered, the par-


186                                                                              Getting the Deal Through – dispute resolution 2006
Mena Legal                                                                                                                       united arab eMirates

3     Limitation issues                                                               ter the plaintiff will require time to respond to the submissions
      What are the time limits for bringing civil claims?                             which is why the case is likely to go back and forth between the
Under UAE civil law, statutes of limitation are deemed to be a                        plaintiff and the defendant. In practice documents and hearings
procedural issue, and not a substantive law issue. The standard                       are exchanged only at hearings. Hearings are open to the public
time limits for bringing civil claims is fifteen years. Claims in                     and held in Arabic. Once the parties have exchanged pleadings
connection with the obligations of traders towards each other                         and submissions and the procedure relating to the suit have been
concerning their commercial activities shall not be heard, if they                    concluded, the court will reserve the case for judgment and sched-
are denied and if there is no lawful justification upon the lapse of                  ule a last hearing date for the delivery of the judgment.
ten years from the date on which the performance of the obliga-                            The average length of time of civil proceedings before the
tion falls due, unless the law stipulates a shorter period. Shorter                   Court of First Instance when the claim is contested ranges from
limitation periods apply with regard to certain types of claims (eg                   six to 12 months. Given that most cases are subject to two appeals
claims in connection with services provided by doctors, pharma-                       a final judgment will normally not be made earlier than two years
cists, engineers, advocates, experts and teachers, in matters con-                    after the initial filing of the claim.
cerning rent, checks or defect warranty, and claims of employees
against their employer).                                                              7   Case management
     In the event of negotiations between the parties, with regard                        Can the parties control the procedure and the timetable?
to the claim the limitation may be suspended. Since limitation
                                                                                      The procedure and timetable is fixed by the Civil Procedure
is an issue which need not be respected by the judge ex officio,
                                                                                      Law. However, the parties may influence the timetable in some
but only upon the motion of one party, the parties may agree
                                                                                      ways with the consent of the court: the defendant may request
to suspend time limits. Limitation is also suspended by filing an
                                                                                      an adjournment to respond to the claim during the first hearing,
action.
                                                                                      and the court usually grants such adjournments. Also the plaintiff
                                                                                      may request an adjournment to enable him to comment on the
4     Pre-action behaviour                                                            defence. It is likely that the case will be adjourned several times
      Are there any pre-action considerations the parties should take into account?   with the result that a case has three or four hearings in the first
With the exception of Dubai and Ras Al-Khaimah, the plaintiff                         instance. The plaintiff may also apply to the court to suspend the
must first refer to the Reconciliation Committee before initiating                    hearing of the case up to six months.
action before the Federal Courts of First Instance appointed by
the Federal Ministry of Justice. The purpose of this pre-action                       8   Evidence
procedure is to encourage the parties to an amicable settlement of                        What is the extent of pre-trial exchange of evidence? Is there a duty to
civil and commercial disputes of whatever value. The Reconcili-                           preserve documents and other evidence pending trial? How is evidence
ation Committee does not have authority in labour claims, rent                            presented at trial?
claims, family matters or financial disputes, summary or provi-
                                                                                      There is no pre-trial exchange of evidence.
sional orders and claims.
                                                                                          All arguments and supporting documents together with Ara-
      The plaintiff may, on the other hand, apply for a letter of no-
                                                                                      bic translations are submitted to court in writing. Hearing wit-
objection from the relevant Reconciliation Committee in case he
                                                                                      nesses in court is not a normal procedure in the UAE. Only on
does not wish to resolve their dispute amicably.
                                                                                      the request of a party or if the court considers it appropriate may
      In any case, the Court of First Instance may not hear a plain-
                                                                                      witnesses be called and heard before court or may a hearing date
tiff, unless he has filed for a letter of no-objection or the matter
                                                                                      be scheduled to hear the arguments from a party before the court
has been before the relevant Reconciliation Committee.
                                                                                      makes its final decision. Witnesses are more likely to be heard if
                                                                                      the case is referred to other forms of evidence, eg an investiga-
5     Starting proceedings                                                            tor or expert. Cases involving technical elements (eg banking,
      How are civil proceedings commenced?                                            accounting, construction, insurance) may be referred to a court
Cases proceed on the basis of written pleadings in Arabic accom-                      expert for an opinion on an argument raised by the parties.
panied by supporting documents, translated into Arabic if in
another language, submitted by a licensed advocate with a writ-                       9   Interim remedies
ten request to the judge to serve the judgment to the defendant.                          What interim remedies are available?
Together with the written pleading the advocate representing the
                                                                                      Interim remedies, such as obtaining a precautionary (preliminary)
plaintiff must file a power of attorney in his favour with the
                                                                                      attachment order before the filing of a claim is available in the
court clerk. Once the plaintiff has paid the court fees, the court
                                                                                      UAE. Attachment applications are also available after a claim
clerk opens a file and schedules a hearing date. The plaintiff or
                                                                                      has been filed before the same court which is hearing the matter.
the advocate is informed about the hearing date. Within 10 days
                                                                                      Following an application made to the judge with the support-
from filing the written request, the court clerk orders the service
                                                                                      ing documents the court normally grants an attachment order
of the summons on the defendant through the court bailiff.
                                                                                      ex-parte.
                                                                                          The plaintiff should file civil proceedings within eight days
6     Timetable                                                                       of the date the attachment order was served to the opponent
      What is the typical procedure and timetable for a civil claim?                  requesting the court to uphold the attachment order. Otherwise,
The typical procedure after effected service of the claim to the                      the attachment order will automatically lapse. There is, on the
defendant is that in terms of the Civil Procedure Law the defend-                     other hand, no limit to filing an objection by the opponent to an
ant needs to file his defence at least three days before the first                    attachment order.
hearing date. The defendant may admit the allegations made                                According to the Law on Civil Procedure some assets are not
against him or deny them and set out for his defence. In the lat-                     subject to attachment.

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      Mena Legal                                                                                                               united arab eMirates

          Although the UAE Civil Procedure Law and recent judg-                      court fees have been paid to court, it is not possible to obtain
      ments indicate that there are attachment orders against assets                 a refund, even in the event that the action is withdrawn or the
      located in the UAE in support of foreign proceedings, there has                parties have settled their dispute.
      been – to date – no precedent to confirm this view.
                                                                                     13 Fee arrangements
      10 Remedies                                                                        Are ‘no win, no fee’ agreements or other types of contingency fee
          What substantive remedies are available?                                       arrangements available to parties?
      UAE law allows compensatory damages. However, there is no                      Lawyer fees for litigation are rarely charged on a time-spent
      concept of punitive damages.                                                   basis. Contingency fees on a ‘no win, no fee’ basis is illegal in
          The primary remedy for breach of contract is specific per-                 the UAE.
      formance. Compensatory damages are allowed when specific                           Generally, there is no provision for orders for significant law-
      performance is unavailable or inappropriate.                                   yers’ fees to be made against the losing party in legal proceedings
          A person who commits a tortious act is responsible to com-                 in Dubai. Each party must be prepared to bear its own fees as
      pensate the injured party by paying for damages for the loss                   they are not recoverable. Lawyer fees are normally negotiated
      caused, whether for personal injury or damage to property. UAE                 between clients and lawyers on a case-by-case basis.
      law distinguishes between direct and consequential loss (eg loss                   Normally lawyers charge their clients a lump sum (percent-
      of profit). Also possible is to claim for moral damages, for violat-           age of the claim in suit) for civil suits excluding court fees and
      ing a person’s freedom, dignity, reputation and financial status.              disbursements.
          If the amount claimed was quantified at the time the claim
      was filed, then the court will grant to the plaintiff in the money
                                                                                     14 Appeal
      judgment interest as from the time of filing the claim until final
                                                                                         On what grounds and in what circumstances can the parties appeal? Is there
      payment. Otherwise, in other instances, such as a claim for dam-
                                                                                         a right of further appeal?
      age and compensation, the court is likely to grant interest from
      the date the judgment becomes final. If the debt is confirmed by               Appeals against final judgments of the Court of First Instance in
      a commercial contract, the court may even grant interest on the                civil and commercial matters, summary proceedings, precaution-
      debt from the time the claimed amount became due until final                   ary attachment applications or urgent applications can be filed
      payment.                                                                       to the Court of Appeal. Appeals can be filed on points of law
          Normally, courts grant 9 per cent interest.                                or on facts.
                                                                                          Either party may appeal further to the Court of Cassation.
                                                                                     In that case, however, only appeals on a point of law are admis-
      11 Enforcement                                                                 sible.
          What means of enforcement are available? What sanctions are available in
          the event a court order is disobeyed?
                                                                                     15 Foreign judgments
      In general, once a judgment has become final, the judgment
                                                                                         What procedures exist for recognition and enforcement of foreign
      debtor will be summoned and given 15 days to comply with the
                                                                                         judgments?
      judgment; otherwise he will face sanctions from the court. In
      case of non-compliance or non-payment, the Execution Court                     Generally foreign judgments will not be automatically enforced
      will execute the judgment upon motion of the judgment plaintiff.               in the UAE. This is because the procedure for the enforcement of
      The Execution Court may issue an order to attach any assets of                 foreign judgments is restrictive and heavily qualified. However;
      the judgment debtor in order to secure payment. The court may                  judgments arising from courts in GCC countries and India can
      attach the bank account, the vehicle, office furniture, credits with           be enforced more readily under the Agreement on the Enforce-
      third parties and even the debtor’s passport.                                  ment of Court Judgments delegations and Judicial Notices in
          After the attachment has been delivered and enforced, the                  the GCC States 1996, respectively the Reciprocal Agreement
      Execution Court can give the order to sell the attached assets                 between the UAE and India ratified in 2000. Subject to certain
      by public auction should the judgment debtor still not pay.                    conditions stated in the Bilateral Treaty of the Enforcement of
      Third parties (including banks) will be requested to transfer any              Judgments with France of 1992, judgments delivered by French
      amounts in favour of the judgment creditor to satisfy the judg-                courts are enforceable in the UAE and vice versa. The UAE has
      ment.                                                                          also entered into certain cooperative arrangements with other
                                                                                     countries including Jordan, Morocco, Syria, Somalia, Algeria
                                                                                     and Egypt.
      12 Inter partes costs                                                               Judgments and orders passed in a foreign country may be
          Does the court have power to order costs?                                  ordered for implementation and execution within the UAE under
      The court in the UAE will order either of the parties, or both on              the same conditions provided for in the law of the foreign state
      a pro-rata basis, to bear the costs of the proceedings. As a general           for the execution of judgments and orders passed in the state
      rule the party that loses the case bears the costs plus expenses,              (Article 235 Civil Code).
      which include the court fees, the expert’s fees and a very nominal                  A petition for execution order shall be filed before the Court
      lawyer fee.                                                                    of First Instance under which jurisdiction execution is sought
           The level of court fees differs from Emirate to Emirate. Court            under lawsuit standard procedures. Execution may not be
      fees in Dubai are quite high, for example. The court clerk assesses            ordered unless the following was verified:
      the court fees and requests the plaintiff’s attorney to pay the                • state courts have no jurisdiction over the dispute on which
      court fees.                                                                         the judgment or order was passed and that the issuing for-
           Normally, the court will make an order regarding the pay-                      eign courts have such jurisdiction in accordance with the
      ment of the court fees upon delivery of the judgment. Once the                      International Judicial Jurisdiction Rules decided in its appli-

188                                                                                      Getting the Deal Through – dispute resolution 2006
Mena Legal                                                                                                                     united arab eMirates

      cable laws;                                                                   and the government of the UAE or any of its subsidiary depart-
•     judgment or order was passed by the competent court accord-                   ments are governed by the ICSID Convention, provided that
      ing to the law of the country in which it was passed;                         the foreign investor is a national of another member state to the
•     adversaries in the lawsuit on which the foreign judgment was                  Convention.
      passed were summoned and duly represented;
•     judgment or order has obtained the absolute degree in
                                                                                    18 Arbitration Agreements
      accordance with the law of the issuing court; and
•     it does not conflict or contradict with a judgment or order                       What are the formal requirements for an enforceable arbitration agreement?
      previously passed by another court in the state and does not                  The arbitration agreement must be in writing and it may be
      include any violation of moral code or public order.                          drafted in any language.
                                                                                         Furthermore, the parties must specify the substance and
The foreign judgment must be translated into Arabic.                                nature of the dispute in writing once it has arisen and prior to
     The foreign judgment which is to be enforced in the UAE                        any material part of the hearings - eg by means of a pre-hearing
must be notarised, legalised by the Ministry of Foreign Affairs                     conference or by adopting a rule such as Article 18 ICC Rules
in the country of origin and authenticated by the UAE embassy                       (Terms of Reference) which pursues the goal of clearly identify-
in that country.                                                                    ing the subject matters of the dispute prior to the beginning of
                                                                                    the proceedings.
                                                                                         Moreover, an arbitration clause that qualifies as a standard
16 Foreign proceedings
                                                                                    contract term will be void.
      Are there any procedures for obtaining oral or documentary evidence for use
                                                                                         Finally, attention must be paid in the case that one party files
      in civil proceedings in other jurisdictions?
                                                                                    suit in the courts under contempt of an existing and valid arbitra-
Foreign judgments can be used as evidence in local proceedings.                     tion agreement. In this case, the other party must challenge the
                                                                                    jurisdiction of the court in the first hearing; otherwise the court
                                                                                    may declare itself to be competent to hear the case and declare
arbitration                                                                         the arbitration clause null and void!
17 UNCITRAL Model Law
      Is the arbitration law based on the UNCITRAL Model Law?                       19 Choice of arbitrator
The arbitration law of the United Arab Emirates is not based on                         If the arbitration agreement and any relevant rules are silent, how many
the UNCITRAL Model Law.                                                                 arbitrators will be appointed and how will they be appointed? Are there
     A federal arbitration law was enacted in 1992 as part of                           restrictions on the right to challenge the appointment of an arbitrator?
the UAE Civil Procedure Code, Federal Law No. (11) of 1992                          If the agreement or the applicable rules are silent with respect to
– Chapter (III) ‘Arbitration’ – Articles 203-218 (an English trans-                 the appointment of arbitrators, or in the case that an arbitrator
lation is available at http://www.diac.ae). Its system and rules                    refuses to act as such, is dismissed, has his or her appointment
follow the concept and principles of the old (pre-1994) Egyptian                    revoked, or is otherwise prevented from acting, the courts have
arbitration law which was derived from the Shari’a and old (19th                    jurisdiction to appoint the arbitrators. The law is silent on the
century) French law. The law applies to both domestic and inter-                    question of how many arbitrators will be appointed (most likely
national arbitration and provides some basic procedural prin-                       one or three); however, the number of multiple arbitrators must
ciples and rules, and the courts still retain a certain supervisory                 be odd.
jurisdiction over the arbitral procedure and the award.                                  An appointment of arbitrators by judgement of the court is
     The UAE are a federal state, and the federal law supersedes                    final and binding, and may not be challenged.
the laws of each Emirate. However, each Emirate is a sovereign
federal state with its own courts and legal system. Therefore, it is
possible that the law in any given Emirate imposes requirements                     20 Procedure
that apply in addition to the federal laws. In particular, the Emir-                    Does the domestic law contain substantive requirements for the procedure
ates of Abu Dhabi, Dubai and Sharjah have arbitration laws that                         to be followed?
existed prior to the adoption of the federal arbitration law and                    The law is very liberal with regard to procedural requirements,
that are still in effect.                                                           thus leaving considerable freedom to the parties in adopting the
     The UAE has two major arbitration institutions: the Dubai                      procedure. Therefore, party autonomy and the principles of due
International Arbitration Centre (www.diac.ae) and the Abu                          process of law are the guiding procedural rules.
Dhabi Commercial Conciliation and Arbitration Centre (http://                           Unless otherwise provided for by the parties, the following
www.adcci.gov.ae:90/public/adccac/). The Dubai Centre is a par-                     non-compulsory procedural rules apply: (i) the arbitrator shall
ticularly modern and well organised arbitration institution, and                    schedule the date and venue of the first hearing, as well as the
its Executive Committee and Board of Trustees are comprised of                      deadlines for the submission of documents, memoranda and
very experienced and internationally respected arbitration prac-                    pleadings, within 30 days after his appointment; (ii) in case that
titioners. Accordingly, the Dubai Centre has adopted a set of well                  one party defaults to submit certain documents, a decision may
drafted arbitration rules that are similar to the ICC Rules and                     be rendered on the basis of the documents submitted by the other
that address some gaps and possible pitfalls occurring under the                    party; (iii) in the case there is more than one arbitrator, the arbi-
Civil Procedure Code. These rules are published in the Official                     trators shall conduct the hearings jointly, and the minutes must
Gazette and, therefore, have force of law.                                          be signed by all arbitrators.
     Furthermore, since 1982 the UAE has been a member of the                           Witnesses must give evidence under oath in the same manner
Convention on the Settlement of Investment Disputes between                         that is used in Court proceedings.
States and Nationals of Other States (ICSID Convention). There-
fore, disputes arising out of contracts between a foreign investor

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      Mena Legal                                                                                                        united arab eMirates

      21 Court intervention                                                     •   if the arbitrators were irregularly appointed or were not
          On what grounds can the court intervene during an arbitration?            authorised to deliver the award in the absence of another
      As stated above, the parties are relatively free to determine the             arbitrator;
      procedure and, therefore, the courts may only intervene during a          •   if the subject matter of the dispute was not defined (see also
      pending arbitration in the following exceptions: (i) to determine             question 18);
      the validity of the arbitration clause or agreement in order for the      •   if the arbitrator lacked capacity by being a minor, bankrupt,
      arbitral tribunal to have jurisdiction, and (ii) to assist with the           legally incapacitated, deprived of his or her civil rights due
      appointment of the arbitrators.                                               to a criminal offence unless he or she has been rehabilitated,
           Furthermore, the court may suspend the proceedings in the                or otherwise does not fulfil the requirements set forth by the
      following cases, if these powers are not conferred to the arbitra-            parties; and
      tors by party agreement or the applicable institutional rules: (i)        •   if there is a material procedural defect.
      in order to determine a preliminary issue; (ii) to decide whether
      documents have been forged; (iii) if a criminal law suit has been         The right to court review of the award based on the grounds
      filed by one party against the other; (iv) in order to fine a witness     set forth in Article 216 of the Civil Procedure Code cannot be
      that refraines from appearing or responding; (v) to order third           waived. In contrast, the parties may waive the right to appeal the
      parties to produce documents which are necessary for rendering            Court’s decision whether or not to approve or set aside the award
      the award; and (vi) to order letters rogatory. However, should            (the provision in Article 217 Section 1 of the Civil Procedure
      these powers have been conferred to the arbitrator, he or she may         Code is in this respect misleading). Furthermore, if the courts
      request the assistance of the courts to enforce these decisions. In       were assisting in the arbitration, the award can only be chal-
      case that the respective arbitration is carried out abroad under          lenged during the court procedure for approval of the award.
      different rules, it is unlikely that the UAE Courts will carry such
      procedures out on request of an arbitrator.                               25 Enforcement
                                                                                    What procedures exist for enforcement of foreign and domestic awards?
      22 Interim relief                                                         Foreign awards: the UAE have not yet acceded to the New York
          Do arbitrators have powers to grant interim or conservatory relief?   or Geneva Conventions on the Recognition and Enforcement of
      The arbitration law is silent on this question and there has been         Foreign Arbitral Awards.
      no precedent where arbitrators have granted a party an order for               In the absence of another multi- or bilateral treaties, such as
      urgent or interlocutory applications, or an attachment against            the GCC treaty or the bilateral agreement with France, foreign
      assets. However, if the parties have not agreed to vest these pow-        arbitral awards will be enforced according to the rules that apply
      ers exclusively in the arbitrators, an ongoing arbitration would          to foreign judgments, the most essential of which being that of
      not prevent the courts from hearing urgent applications for               reciprocity. See also question 15.
      appointment of custodians, liquidators or for ordering an attach-              Historically, a French situs for the arbitration has often been
      ment against the assets locally in the UAE.                               favoured because of the bilateral treaty on Judicial Coopera-
                                                                                tion and Recognition & Enforcement of Judgments in Civil &
                                                                                Commercial Matters. However, since the GCC States Bahrain
      23 Award                                                                  and Oman both have adopted the UNCITRAL Model Law, as
          When and in what form must the award be delivered?                    well as the New York Convention, an arbitration situs in one of
      In the absence of party agreement or institutional provisions, the        these countries could be an interesting option with regard to the
      award shall be rendered within six months from the date of the first      enforcement of arbitral awards, as well as for cultural considera-
      hearing; otherwise the parties can refer the dispute to the courts.       tions.
           The award must be in writing, state the reasons and contain               Domestic awards: Every domestic arbitration award must be
      a final decision by majority vote ( including any dissenting vote).       registered and approved by the courts normally having jurisdic-
      In detail, the award must contain and be accompanied by the               tion in order to be enforceable and, therefore, every award will
      following: (i) a copy of the arbitration clause or agreement; (ii)        automatically be scrutinised by the courts - even if neither party
      a summary of the parties’ submissions, contentions and docu-              objects to it.
      ments; (iii) the date and place of its making; (iv) the signature of           The procedure for registering the award is as follows: once
      all, or a majority of arbitrators; and (v) an official translation of     the award is rendered, a copy of it must be submitted to the
      the award and all documents, if they are not in Arabic.                   parties within five days. In the case that the courts assisted in
                                                                                any manner during the arbitration proceedings (eg if one of the
                                                                                parties refused to participate in the arbitration or delays it), the
      24 Appeal
                                                                                original of the award and its exhibits must be registered within
          On what grounds can an award be appealed to the court?
                                                                                fifteen days with the Secretariat of the respective court. The court
      If the award has been approved by the local courts, the parties           then sets a date for its hearing to grant leave to enforce the award
      can challenge the award only on the grounds set forth in Articles         and notifies the party thereof. However, the court may decide
      215 and 216 of the Civil Procedure Code.                                  without hearing the parties.
           Under Article 215 the award can be challenged for material                When examining the award, the court considers the valid-
      errors.                                                                   ity according to the general provisions set forth in Articles 215
           Under Article 216 the award can be challenged:                       and 216 of the Civil Procedure Code, and may remit the award
      • if it was issued without, or based upon an expired or other-            back to the arbitrators in order to have them review a point they
           wise pathological arbitration clause;                                omitted to settle, or to explain the award if it is not sufficiently
      • if the arbitrator exceeds the powers conferred to him or her            clear for it to be enforced. The arbitrators then have three months
           directly by the parties or indirectly by adoption of institu-        to modify their award. After that, the court may either approve
           tional rules;

190                                                                                 Getting the Deal Through – dispute resolution 2006
Mena Legal                                                                                                          united arab eMirates


   update and trends
   The UAE are currently in the process of developing a new            Ministers approved the initiative to accede to the New York
   arbitration law which will be based on the UNCITRAL                 Convention, and this matter is since pending for ratification
   Model Law and which is said to be based on the Egyptian             in the UAE Supreme Council. The ratification of the New
   adoption of the same. This legislation exists already in a          York Convention may pass in 2006, and the new law could be
   draft form. Furthermore, in May 2003, the UAE Cabinet of            promulgated as soon as 2007.




the award and grant leave to enforce it, or it will set the award      alternative dispute resolution
aside. This decision is subject to appeal. Finally, the award may
                                                                       27 Obligatory ADR
be subject to correction a second time, if the parties challenge the
                                                                           Is there a requirement for the parties to litigation or arbitration to consider
award under Articles 215 and 216 Civil Procedure Code.
                                                                           alternative dispute resolution before or during proceedings?
    The procedure for registration of the award and Article 215,
under which an award can be challenged for material errors,            The Civil Procedure Code does not provide that mandatory con-
remain the major obstacles for international arbitrations con-         ciliation or mediation be conducted prior to any litigation or
ducted under the current laws of the UAE.                              arbitration. However, the Chambers of Commerce in Abu Dhabi
                                                                       and Dubai provide conciliation services and rules.

26 Costs                                                               Miscellaneous
    Can a successful party recover its costs?
                                                                       28 Specific features
In the absence of applicable institutional rules or party agree-
                                                                           Are there any specific features of the dispute resolution system not
ment, the arbitrators are authorised to determine their own fees
                                                                           addressed in any of the previous questions?
and the costs of the arbitration, and they may apportion the costs
between the parties, including lawyer’s fees, in total or in part.         Federal Law provides that only advocates that are UAE
However, the arbitrators’ decision as to costs can be appealed         nationals can appear before the UAE Courts, except for some
in the courts, and the courts may modify the decision “so that         Arab lawyers that were licensed prior to the law restricting
they correspond to the work supplied and to the nature of the          appearance before the courts to nationals was passed. However,
dispute”.                                                              a statutory requirement to be represented by an advocate exists
        The Dubai International Arbitration Centre provides a          only for cases heard by the Dubai Court of Cassation and the
schedule of costs that must be applied if the arbitration is con-      Abu Dhabi Supreme Court. Therefore, the parties can represent
ducted under its auspices.                                             themselves before the Courts of First Instance and the Courts of
                                                                       Appeal.
                                                                           With respect to the arbitration law, it is noteworthy that UAE
                                                                       law – unlike the law in Saudi Arabia – does not impose restric-
                                                                       tions with respect to the arbitrator’s religion and gender.




    MENA Legal
    in association with SALgER Rechtsanwälte
    Contacts: Christian Ule (litigation)                                e-mail: ule@mena-legal.com
              K Florian Buchler (arbitration)                           e-mail: buchler@mena-legal.com

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