The UAE’s Pilgrimage to International Arbitration Stardom

A Critical Appraisal of Dubai as a Centre of Dispute Resolution Aspiring to be a Middle East Business Hub

In: The Journal of World Investment & Trade
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  • 1 University of Portsmouth, United Kingdom
  • 2 University of Portsmouth, United Kingdom

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The last two decades have witnessed a growing interest and participation of the Gulf Cooperation Council (GCC) states in international arbitration as they have also joined the New York Convention and the Washington Convention. Still, scepticisms abound as to the efficacy of international arbitration in the GCC states. However, Dubai is considered to have the potential of being a Middle East business hub as it is modernising its arbitration law and practice in light of international developments. Forward thinking and innovative pro-arbitration institutions like the Dubai International Arbitration Centre (DIAC) - the leading arbitration centre in the UAE; the Dubai International Financial Centre (DIFC) - a common law free zone within Dubai with its own sets of laws, including the DIFC Arbitration Law, and its own court system (DIFC Courts) both of which are separate from Dubai and UAE laws and judicial systems; and the DIFC-LCIA Arbitration Centre, have turned Dubai into a growing propitious arbitration hub (i.e. a pro-arbitration and pro-enforcement jurisdiction) in the Middle East. While doubts continue to be raised with regard to the role and influence of the Shari’a on the arbitration process and on the enforceability of arbitral awards in Dubai, an examination of recent developments and trends in the arbitration rules and case law in Dubai reveals a promising environment for international arbitration, except for a few cases that followed formalistic grounds for denying enforcement. Recent cases from the UAE, and especially from Dubai, reveal a new attitude pervading the UAE judiciary that is more welcoming of the New York Convention and that is less likely to interfere with the merits of an arbitral award. However, the new UAE Draft Federal Arbitration Law is yet to be enacted. The article provides a critical appraisal of the recent legislative and institutional developments and international arbitral practice in the UAE and assesses Dubai’s prospect to be a Middle East business hub.

  • 9

    Sornum, supra note 7.

  • 13

    Luttrell, supra note 6, p. 254 (stating that the process of economic diversification in Dubai was accelerated by sound planning at the federal and emirate level).

  • 17

    Emmerson and Hutchison, supra note 15 (stating that “on balance there has been significant progress in the Dubai legal system with the courts working to find their feet in supporting the increasing popularity of arbitration in the region”).

  • 18

    Beswetherick and Hutchison, supra note 4; Luttrell, supra note 6, p. 255.

  • 24

    Smith and Marrone, supra note 19.

  • 26

    Luttrell, supra note 6, p. 255.

  • 39

    Audi and Tricoli, supra note 36; Smith and Ibrahem, supra note 36; Shepard, supra note 28.

  • 42

    Audi and Tricoli, supra note 36.

  • 50

    Shepard, supra note 28.

  • 51

    Dubai Law No. 12 of 2004.

  • 53

    Emmerson, supra note 40.

  • 56

    Hall, Sharih and Clifford, supra note 54.

  • 60

    Audi and Tricoli, supra note 36.

  • 66

    Emmerson and Hutchison, supra note 15; Mechantaf, supra note 65 (stating that the court could have granted a stay pursuant to Article II(3) of the New York Convention but instead relied on Article 13 of the DIFC Arbitration Law).

  • 70

    Beswetherick and Hutchison, supra note 4 (calling the partnership a “joint venture”).

  • 72

    Appenzeller and Harr, supra note 47.

  • 74

    Appenzeller and Harr, supra note 47.

  • 75

    Audi and Tricoli, supra note 36 (calling the practice “tried and tested”).

  • 78

    Ashraf, Brown and Lysenko, supra note 76.

  • 79

    Lawry-White, supra note 58; Audi and Tricoli, supra note 36, fn. 3; DIFC Press Release, ‘DIFC Courts and Dubai Courts Achieve New Arbitration Enforcement Landmark’, 29 March 2011 <difccourts.complinet.com/en/display/display_main.html?rbid=2725&element_id=4492&record_id=4848> (12 October 2012).

  • 80

    Lawry-White, supra note 58.

  • 82

    Audi and Tricoli, supra note 36.

  • 85

    Audi and Tricoli, supra note 36.

  • 88

    Luttrell, supra note 86, p. 174 (explaining delocalisation theory as holding that “there should only be one point at which national control is asserted over the arbitral process” and “that single procedural point of control should be the state in which enforcement is sought”).

  • 90

    Lawry-White, supra note 58.

  • 92

    Lawry-White, supra note 58.

  • 95

    Lawry-White, supra note 58.

  • 97

    Martin and Cheney, supra note 96.

  • 101

    Beswetherick and Hutchison, supra note 4.

  • 104

    Lawry-White, supra note 58; Hall, Sharih, and Clifford, supra note 54 (stating that “as an empirical matter, it has been reported that the Dubai Courts have to date converted and enforced several DIFC Court judgments”).

  • 105

    Al Mulla and Blanke, supra note 100 (noting that under the Judicial Authority Law, Article 7(2) of Law No. 12 of 2004, the award is likely enforceable in the UAE as a foreign judgment). A DIFC court order is obtained by applying in a DIFC court for the recognition and enforcement of an arbitral award, which when granted, will result in the DIFC Court issuing an order for the enforcement of the award.

  • 106

    Lawry-White, supra note 58.

  • 108

    Pasha, supra note 48; see also, Hall, Sharih, and Clifford, supra note 54.

  • 111

    Hall, Sharih, and Clifford, supra note 54.

  • 114

    Hall, Sharih, and Clifford, supra note 54; GCC Convention, supra note 109.

  • 118

    Beswetherick and Hutchison, supra note 4.

  • 121

    Lawry-White, supra note 58.

  • 123

    Duffield, supra note 23.

  • 127

    Appenzeller and Harr, supra note 47; Ishita Shome, ‘Evolution of Arbitration in Dubai’ (2011) 5 India Bus. L. J. 56.

  • 128

    Shome, supra note 125, p. 56; Beswetherick and Hutchison, supra note 4 (describing the DIAC as an “arbitration off-shoot” of the Dubai Chamber of Commerce).

  • 130

    Lawrence, Morton and Khan, supra note 1, p. 3.

  • 132

    Duffield, supra note 23.

  • 133

    Appenzeller and Harr, supra note 47; Beswetherick and Hutchison, supra note 4 (the new rules were drawn up by DIAC trustees, “the majority of whom are eminent foreign international arbitrators”).

  • 134

    Appenzeller and Harr, supra note 47.

  • 135

    Lawrence, Morton and Khan, supra note 1, p. 3.

  • 138

    Ho, supra note 137.

  • 140

    Ho, supra note 137; Appenzeller and Harr, supra note 47.

  • 146

    Smith and Marrone, supra note 19.

  • 148

    Smith and Marrone, supra note 19.

  • 150

    Smith and Marrone, supra note 19.

  • 154

    Smith and Marrone, supra note 19.

  • 159

    Lawrence, Morton and Khan, supra note 1, p. 3.

  • 161

    Kantaria, supra note 143, p. 65. It remains to be seen to what extent the Draft Law will adopt the 2006 Amendments to the Model Law, specifically relating to interim measures.

  • 164

    Kantaria, supra note 143, p. 66.

  • 176

    Emmerson and Hutchison, supra note 15.

  • 177

    Kantaria, supra note 143, p. 63; Karim Nassif, Gordon Blanke and Soraya Crom-Bakhos, ‘Arbitration under UAE Law: Towards a Modern Legal Framework?’ The In-House Lawyer, 9 September 2010 <www.inhouselawyer.co.uk/index.php/united-arab-emirates/8140-arbitration-under-uae-law-towards-a-modern-legal-framework> (16 October 2012).

  • 178

    Smith and Ibrahem, supra note 36.

  • 179

    Kantaria, supra note 143, p. 63.

  • 180

    Beswetherick and Hutchison, supra note 4; Luttrell, supra note 6, p. 272.

  • 181

    Kantaria, supra note 143, p. 63.

  • 182

    Beswetherick and Hutchison, supra note 4.

  • 183

    Shome, supra note 127, p. 56.

  • 185

    Smith and Ibrahem, supra note 36.

  • 186

    Beswetherick and Hutchison, supra note 4.

  • 191

    Smith and Ibrahem, supra note 36.

  • 192

    Blanke, supra note 189; Smith and Marronel, supra note 19.

  • 193

    Smith and Marrone, supra note 19; Blanke, supra note 189.

  • 194

    Lawry-White, supra note 58.

  • 195

    Emmerson and Hutchison, supra note 15; Paula Hodges, Charles Kaplan and Peter Godwin, ‘Enforcement of Foreign Arbitral Awards in Dubai’, 8 January 2012 <www.lexology.com/library/detail.aspx?g=4bf350ff-b1aa-4859-be5b-79d960734679> (10 December 2013); Essam Al-Tamimi, ‘The Status of Arbitration in the UAE’ (March 2004) 1 DIAC Journal 1, 46 (observing that UAE judges tend to ensure that an arbitral award, even a foreign one, satisfies the UAE Code of Civil Procedure, making it difficult to enforce a foreign award in the UAE).

  • 196

    Emmerson and Hutchison, supra note 15, citing Appeal for Cassation No. 132/2012 Commercial – Airmec Dubai, LLC v. Maxtel International, LLC; Hodges, Kaplan and Godwin, supra note 195; Gordon Blanke, ‘Dubai Court of Cassation Confirms Enforcement of Foreign Awards under New York Convention: The End of a Beginning – Inshallah!’, 21 November 2012 <kluwerarbitrationblog.com/blog/2012/11/21/dubai-court-of-ca … ArbitrationBlogFull+%28Kluwer+Arbitration+Blog+-+Latest+Entries%29> (24 December 2012).

  • 197

    Blanke, supra note 189.

  • 200

    Shome, supra note 127, p. 57.

  • 204

    Federal Law No. 11 of 1992.

  • 205

    Al-Siyabi, supra note 201, p. 257.

  • 208

    Al-Siyabi, supra note 201, p. 257.

  • 212

    Shome, supra note 127, p. 57.

  • 215

    El-Ahdab, supra note 165, pp. 818–819; Patrick Bourke and Adam Vause, ‘Latest Draft of UAE Federal Arbitration Law Released’ <www.martindale.com/alternative-dispute-resolution-law/article_Norton-Rose-Canada-LLP_1472118.htm> (14 March 2012).

  • 216

    Kantaria, supra note 143, p. 63.

  • 217

    Bourke and Vause, supra note 215.

  • 218

    El-Ahdab, supra note 165, pp. 818–819.

  • 219

    Kantaria, supra note 143, p. 63.

  • 220

    El-Ahdab, supra note 165, pp. 818–819; Al-Tamimi, supra note 173, p. 154; Bourke and Vause, supra note 215.

  • 221

    Bourke and Vause, supra note 215.

  • 224

    Roy, supra note 175, pp. 923–924.

  • 228

    Mechantaf, supra note 227.

  • 232

    Blanke, supra note 230.

  • 235

    Mechantaf, supra note 227.

  • 237

    Mechantaf, supra note 227.

  • 239

    Luttrell, supra note 6, p. 256.

  • 240

    Beswetherick and Hutchison, supra note 4 (stating that “there is a general trend in the UAE away from cases in which arbitration awards are overturned by the UAE courts on such pure technicalities,” therefore heralding “a more arbitration-friendly landscape” in the UAE).

  • 243

    Kantaria, supra note 143, p. 63.

  • 246

    Martin and Cheney, supra note 96.

  • 248

    Ashraf, Brown and Lysenko, supra note 76; Audi and Tricoli, supra note 36.

  • 252

    Audi and Tricoli, supra note 36.

  • 253

    Lawry-White, supra note 58 (stating that “decisions of the Dubai Courts are not systematically reported”).

  • 254

    Shome, supra note 127, p. 56; Audi and Tricoli, supra note 36; Emmerson and Hutchison, supra note 15 (stating that “courts are enhancing confidence in Dubai as a centre for international arbitration”); Hodges, Kaplan and Godwin, supra note 195 (stating that there is a “trend towards a more developed pro-arbitration culture”).

  • 257

    Blanke, ‘Enforcement’, supra note 189.

  • 260

    Blanke, supra note 189.

  • 261

    Emmerson and Hutchison, supra note 15.

  • 264

    Hodges, Kaplan and Godwin, supra note 195.

  • 265

    Audi and Tricoli, supra note 36.

  • 268

    Beswetherick and Hutchison, supra note 4.

  • 269

    Blanke, supra note 189.

  • 270

    Beswetherick and Hutchison, supra note 4.

  • 272

    Blanke, supra note 189.

  • 274

    Emmerson and Hutchison, supra note 15.

  • 275

    Beswetherick and Hutchison, supra note 4; Emmerson and Hutchison, supra note 15 (the award was also not signed by the dissenting arbitrator, a requirement under the UAE Civil Procedure Code, although the dissenting arbitration did sign the attached dissenting opinion).

  • 276

    Emmerson and Hutchison, supra note 15. The case is currently under appeal and the court’s decision, according to Emmerson and Hutchison, may stem from the court being confused as to the legal device for enforcement under the New York Convention.

  • 278

    Smith and Marrone, supra note 19.

  • 279

    Blanke, supra note 189 (stating that “in the meantime, however, the DIFC may well serve as a viable – yet presently still untested – ‘host’ or ‘intermediate’ jurisdiction for enforcement of New York Convention awards in the UAE”); Emmerson and Hutchison, supra note 15.

  • 281

    Smith and Marrone, supra note 19.

  • 284

    Al Mulla and Blanke, supra note 100.

  • 286

    El-Ahdab, supra note 165, p. 822.

  • 288

    Blanke and Nassif, supra note 285.

  • 290

    Blanke and Nassif, supra note 285; El-Ahdab, supra note 165, pp. 822–823.

  • 291

    El-Ahdab, supra note 165, p. 823; Blanke and Nassif, supra note 285.

  • 292

    El-Ahdab, supra note 165, p. 824; Blanke and Nassif, supra note 285.

  • 293

    Blanke and Nassif, supra note 285. Examples of procedural irregularities include failure by the arbitrators to sign both the reasoning and the dispositive of the award. Dubai Court of Cassation, Petition No. 233/2007, Judgment, 13 January 2008; see also El-Ahdab, supra note 165, p. 822.

  • 294

    El-Ahdab, supra note 165, p. 824.

  • 298

    Al Mulla and Blanke, supra note 100.

  • 301

    El-Ahdab, supra note 165, p. 822.

  • 303

    Ibid., p. 823.

  • 306

    El-Ahdab, supra note 165, p. 823.

  • 310

    Blanke and Nassif, supra note 285.

  • 312

    Al Mulla and Blanke, supra note 100.

  • 315

    Al Mulla and Blanke, supra note 100.

  • 316

    Ezrahi, supra note 223, p. 18; El-Ahdab, supra note 165, p. 823.

  • 319

    Al Mulla and Blanke, supra note 100.

  • 321

    Al Mulla and Blanke, supra note 100.

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