Business | Construction
New DIFC arbitration law approved
Legislation will enable financial centre to offer legal platform for dispute resolution.
- Staff Report
- Published: 11:28 September 1, 2008
- The Dubai International Financial Centre. The Arbitration Law will enable the recently established DIFC-LCIA Arbitration Centre to provide neutral, efficient and reliable dispute resolution services to companies throughout the world.
- Image Credit: Bloomberg News
Dubai: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has enacted the new Arbitration Law of the Dubai International Financial Centre (DIFC).
The new Law will enable the recently established DIFC-LCIA Arbitration Centre to provide neutral, efficient and reliable dispute resolution services to companies throughout the world.
The DIFC-LCIA Arbitration Centre is a joint venture between London Court of International Arbitration (LCIA) and the DIFC.
"With the introduction of the Arbitration Law, DIFC now offers a legislative platform for comprehensive dispute resolution," Omar Bin Sulaiman, Governor of DIFC, said.
Cost effective
"We are confident that the new Arbitration Law, in conjunction with the newly formed DIFC-LCIA Arbitration Centre, will ensure that local, regional and global companies have an expeditious, cost effective alternative to expensive, laborious dispute settlements done traditionally through the courts," he said.
"Arbitration is cost effective and less time consuming. The arbitration centre will complement DIFC courts," Raju Menon, Managing Partner, Morison Menon, said.
Click here to see DIFC Arbitration Law
The Arbitration Law covers all stages of the arbitral process, from the arbitration agreement to the recognition and enforcement of arbitral awards. Universally applicable and compatible with both civil and common law systems, the new law offers the international business community, international lawyers and arbitrators a comprehensive and modern set of rules and procedures to enable effective settlement of arbitration cases.
The new law will enable the recently established DIFC-LCIA (London Court of International Arbitration) Arbitration Centre to provide neutral, efficient and reliable dispute resolution services to companies throughout the world. While the salient features of the new law are listed below, the full provisions of the law are available at www.difc.ae.
General provisions
- Waiver of right to object: A party who knows that any provision of this Law, including one from which the parties may derogate, or any requirement under the 'Arbitration Agreement' has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided therefore, within such period of time, shall be deemed to have waived his right to object.
- Extent of court intervention: In matters governed by this law, no DIFC court shall intervene except to the extent so provided in this law.
Arbitration Agreement
Definition: An 'Arbitration Agreement' is an agreement by the parties to submit to Arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An Arbitration Agreement maybe in the form of an arbitration clause in a contract or in the form of a separate agreement.
Confidentiality: Unless otherwise agreed by the parties, all information relating to the arbitral proceedings shall be kept confidential, except where disclosure is required by an order of the DIFC Court.
Interim measures by court: It is not incompatible with an Arbitration Agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.
Number of arbitrators: The parties are free to determine the number of arbitrators provided that it is an odd number If there is no such determination, the number of arbitrators shall be one.
Appointment of arbitrators: No person shall be precluded by reason of his nationality from acting as an arbitrator, unless otherwise agreed by the parties. The parties are free to agree on a procedure for appointing the arbitrator or arbitrators,
Grounds for challenge: When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence.
Challenge procedure: The parties are free to agree on a procedure for challenging an arbitrator.
Failure or impossibility to act: If an arbitrator becomes as a matter of fact or law unable to perform his functions or for other reasons fails to act without undue delay, his mandate shall terminate if he withdraws from his office or if the parties agree on the termination.
Appointment of substitute arbitrator: Where the mandate of an arbitrator terminates because of his withdrawal from office for any other reason or because of the revocation of his mandate by agreement of the parties or in any other case of termination of his mandate:
Liability of Arbitral Tribunal and others: No arbitrator, employee or agent of an arbitrator, arbitral institution, officer of an arbitral institution or appointing authority shall be liable to any person for any act or omission in connection with an arbitration unless they are shown to have caused damage by conscious and deliberate wrongdoing.
Competence of Arbitral Tribunal to rule on its jurisdiction: The Arbitral Tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the Arbitration Agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.
Interim measures
The following provisions shall apply unless the parties have expressly agreed in writing that the Arbitral Tribunal shall not have power to order interim measures.
Equal treatment of parties: The parties shall be treated with equality and each party shall be given a full opportunity of presenting his case.
Determination of rules of procedure: Subject to the provisions of this law, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting the proceedings.
Seat of the arbitration: The parties are free to agree on the seat of the arbitration. In the absence of such agreement, where any dispute is governed by DIFC law, the seat of the arbitration shall be the DIFC.
Commencement of arbitral proceedings: Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.
Language: The parties are free to agree on the language or languages to be used in the arbitral proceedings. In the absence of such agreement, the Arbitral Tribunal shall determine the language or languages to be used in the proceedings.
Statements of claim and defence: Within the period of time agreed by the parties or determined by the Arbitral Tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of such statements.
Hearings and written proceedings: Subject to any contrary agreement by the parties, the Arbitral Tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials.
Default of a party: Unless otherwise agreed by the parties, if, without showing sufficient cause, (a) the claimant fails to communicate his statement of claim in accordance with Article 30(1), the Arbitral Tribunal shall terminate the proceedings
Court assistance in taking evidence: The Arbitral Tribunal or a party with the approval of the Arbitral Tribunal may request from the DIFC Court assistance in taking evidence. The DIFC Court may execute the request within its competence and according to its rules on taking evidence.
Rules applicable to substance of dispute: The Arbitral Tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given state or jurisdiction shall be construed, unless otherwise expressed, as directly referring to the substantive law of that state or jurisdiction and not to its conflict of laws rules.
Decision making by panel of arbitrators: In arbitral proceedings with more than one arbitrator, any decision of the Arbitral Tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members.
Settlement: If, during arbitral proceedings, the parties settle the dispute, the Arbitral Tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the Arbitral Tribunal, record the settlement in the form of an arbitral award on agreed terms.
Form and contents of award: The award shall be made in writing and shall be signed by the arbitrator or arbitrators.
Termination of proceedings: The arbitral proceedings are terminated by the final award or by an order of the Arbitral Tribunal.
Fine points: Legalscope
- Title: This law may be cited as the 'Arbitration Law of 2008'.
- Legislative authority: This law is made by the Ruler of Dubai.
- Application of the law: This law applies in the jurisdiction of the Dubai International Financial Centre.
- Dates of enactment and commencement: This law is: (a) enacted on; and(b) comes into force on, the respective dates specified in the enactment notice in respect of the law.
- Repeal of legislation: As on the date specified in the enactment notice in respect of the law, the DIFC law No. 8 of 2004 shall be repealed and replaced in its entirety by the Law.
- Scope of application of law: Parts 1 to 4 and the schedule of this law shall all apply where the seat of the Arbitration is the DIFC. Articles 14, 15, Part 4 and the schedule of this law shall all apply where the seat is one other than the DIFC.
Will this help build investors' trust and increase international investments in the UAE? How do you see the centre affecting the burden on the courts? Have you suffered because of the absence of such a centre in the past? What happened? Tell us at letter2editor@gulfnews.comor fill in the form bellow to send your comments.
Share this article
More from Construction
More from Business
Popular in Business
-
General
Precious jump
Gold prices at new high as India's central bank buys $6.7b worth of gold
Business Editor's choice
-
UAE companies in full force at WTM
Seventy-eight participants are from Dubai and 50 from Abu Dhabi
-
DIFC committed to high standards
Ensures an efficient process to serve the business community
-
Sweet life in the Middle East
A sweet look at the confectionary industry in the UAE and Middle East
