Dubai: Nothing can be unsettling for a business or a conglomerate than be sucked into a dispute resolution process that can go on and on. Valuable resources, including that of time, are lost in any such legal tussle, not to mention the goodwill that gets lost in the process.
Dubai has been working on ways and means to develop arbitration expertise in business and commercial disputes. The Dubai International Arbitration Centre (DIAC) was empowered in the last two years, whereby it became the single entity overseeing all such issues.
In 2022, DIAC introduced new Arbitration Rules to optimise efficiency of such procedures, and which played its part to consolidate Dubai's position as an international dispute resolution hub.
The greater goal? To make Dubai even more of a natural choice for businesses to be in.
In an interview, Dr. Tariq Humaid Al Tayer, Chairman of DIAC, gives an insight on how the Centre works to get businesses to settle disputes and move on.
DIAC is now the de facto go-to entity in Dubai for dispute resolution. Are there more changes planned on DIAC’s strategy?
Our new strategy is based on an internal assessment, the (status of the) external sector, and market study. It is inspired by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai.
The strategy aims to enhance the effectiveness of DIAC by adopting best international practices in alternative dispute resolution (ADR) methods. We aim to support the growth and development of the arbitration community in Dubai and consolidate Dubai as a regional and international hub for ADR.
Is it purely disputes related to business issues that you oversee at DIAC? And that would be both for local and free zone entities?
Yes, DIAC oversees disputes involving both local and free zone entities. The jurisdiction extends to any dispute that the parties agree to arbitrate under its rules, providing a platform for resolving disputes fairly, impartially, and efficiently.
The use of arbitration to resolve business and commercial disputes has become increasingly popular due to its many benefits. Arbitration provides parties with the ability to resolve disputes in a private forum, as well as the ability to choose arbitrators with relevant expertise.
This can lead to a more specialised and efficient resolution of disputes. The arbitrator’s decision is final, which can provide a sense of closure and finality for the parties.
Did the recent changes at DIAC extend to the regulatory side? What I mean is whether it still comes under Common Law?
DIAC has a default seat of arbitration located Dubai International Financial Centre, which operates under Common Law. A default seat of arbitration is where the arbitration will take place in the absence of an agreement between the parties on a different seat.
However, parties involved in the dispute can agree on any law or seat of arbitration they believe is more convenient or appropriate for their dispute.
The choice of seat and governing law in international arbitration can significantly impact the procedural and substantive aspects, such as the jurisdiction that has the authority to enforce the award, the laws applicable to the arbitration, and the rules and procedures that govern the conduct of the arbitration.
It is essential for parties to carefully consider their options and reach an agreement on the seat and governing law that is in their best interests. This agreement can be reflected in a contract or a separate agreement between the parties.
Dubai went from having three arbitration centres - including one at DIFC - to one. What was the reason for the change?
The consolidation of Dubai's arbitration centres into DIAC was a strategic move, with the primary objective being to create a unified arbitration centre to provide clients with a consistent dispute-resolution experience.
The consolidation involved the integration of three centres - DIFC-LCIA, EMAC, and DIAC - which involved aligning policies, procedures, and systems to ensure a smooth and cohesive experience for the involved parties and other stakeholders.
The consolidation has brought several benefits for all parties, including greater accessibility and transparency in the dispute resolution process. By integrating the three centres under DIAC, the regulatory framework for arbitration in Dubai has become more consistent and transparent.
In real terms, how easy was the integration?
Integrating the three into DIAC was complex and demanding - but it was completed. The integration involved aligning policies, procedures, and systems to create a cohesive experience for clients, as well as training staff and updating processes to ensure smooth operations.
DIAC streamlined the client dispute resolution process by integrating the former arbitration centre, ensuring consistency and clarity in the regulatory framework for arbitration in Dubai. Consolidating the centres under DIAC has helped make the dispute resolution process more accessible and transparent for the parties involved.
Are the majority of the cases heard through digital channels?
The use of digital channels in arbitration is rising. The increased use of digital channels in arbitration reflects the broader trends in the legal industry. Digital solutions can potentially improve the efficiency and accessibility of the arbitration process.
Although there are still many legal and practical issues relating to virtual arbitrations, the biggest advantage is that arbitration proceedings no longer need an extensive amount of money and time, besides being quick and practical.
The DIAC Arbitration Rules 2022 have brought some significant changes to proceedings and are in line with best international practices. The tribunal now has the choice to hold virtual meetings and hearings, giving parties greater modernising and modernising procedures.
Recently, Dubai announced special arbitration processes for family business disputes and Commercial Agency. Will these too come under DIAC ambit?
As per the new legislation, family businesses and parties to commercial agencies can resort to arbitration if they have an agreement to refer their dispute to arbitration. However, with regard to the commercial agencies’ contracts, it must be noted that the agreement to arbitrate does not apply to a dispute being heard before the concerned committee or courts prior to publication of the new federal law in the official gazette.
DIAC is well-equipped to cater to the various needs of the business community. We have the expertise to support local and international businesses and provide them with unmatched alternative dispute resolution services.