New dispute resolution mechanism on its way in UAE

Dubai: Disputes between companies in the UAE will be resolved in an amicable manner under a new dispute resolution mechanism within the judiciary, a top government official said on Thursday.

Minister of Justice Dr Hadef Jua'an Al Daheri told delegates at a day-long conference that an Alternative Dispute Resolution (ADR) system would be introduced to help solve financial disputes through mediation and arbitration.

"The ADR system was found to be a necessity to solve the growing commercial, civil, labour, rental and personal disputes amid the economic crisis in the country," he told the audience at a conference organised by the Ministry of Justice, Dubai Chamber of Commerce and Industry and Dubai International Arbitration Centre.

"The ADR system can solve disputes in a way that satisfies all parities according to a legal framework, saving time and expenses while maintaining confidentiality," he told Gulf News.

"This system will help the business community to maintain good business relations while, on the other hand, disputes settled in courts usually create tension and inconvenience."

Calls for alternative dispute resolution gained momentum in recent months, as thousands of private companies are finding it difficult to cope with the current economic situation where falling sales are hampering cashflows, resulting in bankruptcy and personal insolvency.

In the UAE, writing cheques without the funds to cover them and other financial irregularities are considered criminal offences, resulting in severe punishment.

According to Dubai Chamber, ADR will produce positive results and support business growth and commercial transactions.

Hesham Al Shirawi, second vice-chairman of the Dubai Chamber, said: "The business world around us is evolving fast and we must develop and activate legal mechanisms in creating a harmonious business environment that will directly support economic growth in our country."

Moreover, Al Shirawi remarked that the global financial crisis has reinforced the need for quick debt collection, which can be achieved by adopting ADR.

ADR, he said, is an effective tool to settle commercial disputes according to a flexible mechanism that suits the modern business environment.

Dr Hussam Talhuni, Dir-ector of Dubai International Arbitration Centre, told Gulf News: "The introduction of ADR in courts is a development of advanced government services under the judicial umbrella.

"This system will create an atmosphere of trust in the business community and will give investors, both local and international, confidence in the efficiency of the UAE federal courts in resolving commercial disputes quickly and at a lower cost."

He declined to comment on whether feuding parties should apply for ADR in court before approaching the Dubai International Arbitration Centre.