Legal arbitration lead
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As a country where many multinational companies choose to locate their regional offices and a nation where many expats invest in real estate, the UAE has emerged as a hub for arbitration. Nandini Tiwari, Associate, Hamdan AlShamsi Lawyers & legal Consultants, says that this is due to a number of factors. “The UAE has succeeded to become the regional hub for law due to its investor-friendly laws, internationally recognised principles and efficient enforcement mechanisms. The procedural laws of the UAE provide cost-effective and fast-track legal resolutions.”

Tiwari says that the presence of the Dubai International Financial Centre (DIFC) courts and the Abu Dhabi Global Market (ADGM) courts means that individuals and businesses from across the Gulf often choose to bring their cases to the UAE. “The DIFC courts have executed mutual enforcement treaties with various other countries that assist the judgment creditor to realise the awarded sums by enforcing the orders rendered by the DIFC courts in other jurisdictions.”

While enforcing a foreign award in the UAE has now became a formality, there is no wonder that more and more companies are choosing the UAE to conduct their business.

- Eduard P. Nedelcu, Head of Arbitration, Al Safar and Partners

She refers to Article 24 of the DIFC Court Law, which allows DIFC courts’ jurisdiction to ratify judgments from foreign courts. “Judgment creditors often approach the DIFC Courts seeking ratification of the orders rendered by the non-UAE courts, in circumstances where the judgment debtor has assets in the UAE,” she says.

Eduard P. Nedelcu, Head of Arbitration, Al Safar and Partners, says that UAE courts’ ability to enforce foreign judgments makes the country an attractive destination for foreign investment. “While enforcing a foreign award in the UAE has now became a formality, there is no wonder that more and more companies are choosing the UAE to conduct their business; this shows a lot of trust in the UAE legal system.

The introduction of the Cabinet Regulations brought much needed clarity to the enforcement of foreign judgments, orders and awards.

- Robert Whitehead, Senior Associate, Hamdan AlShamsi Lawyers & Legal Consultants

“A lot of international companies with multiple contracts often involve arbitration clauses in the contracts with Dubai as the seat of arbitration.”

Robert Whitehead, Senior Associate, Hamdan AlShamsi Lawyers & Legal Consultants, says that the UAE’s Cabinet Regulations, which came into force in 2019, was a significant development as they brought greater transparency to the UAE courts’ jurisdiction. “Prior to the Cabinet Regulations implementation, there was uncertainty around whether UAE arbitration law was intended to apply to the enforcement of foreign, as well as domestic, arbitral awards in the UAE,” he says.

“The introduction of the Cabinet Regulations brought much needed clarity to the enforcement of foreign judgments, orders and awards.”

Onshore and offshore arbitration

Many foreign companies in the UAE choose to open their businesses in free zones due to the tax and ownership benefits. Whitehead says that as a result, arbitration in the UAE is distinguished between offshore and onshore. “Offshore arbitration are arbitrations that have their seats in one of the major free zones, such as the DIFC courts and the ADGM courts, and onshore arbitrations are arbitrations which have their seats in the UAE, excluding the DIFC and ADGM. The offshore arbitrations operate under the respective laws of each free zone.”

Nedelcu says that the majority of his clients prefer to use arbitration centres rather than bringing cases to court. “International arbitrations are quite diverse and are generally conducted in the arbitration centres and not UAE courts. The most common arbitrations refer to contractual breaches, oil and maritime disputes - specifically the cases were the parties have previously agreed to submit their dispute to arbitration.

“We cannot leave behind domestic arbitration, which seems to be a preferred alternative to litigation and most of the domestic arbitration revolves around the real estate industry. The London Court of International Arbitration (i.e. LCIA) and the ICC – International Court of Arbitration, are where the majority of construction and finance disputes are settled,” says Whitehead.

A digital future

As with the majority of businesses, the law profession has been forced to accelerate its digitisation following the pandemic. “The legal industry has shifted towards a digitisation of court procedures and enforcement. Hearings and courts system in Dubai can be done online. We pride ourselves in having fully integrated digitisation through our IT systems whereby we manage tasks and workflow as well as a CRM, to keep track of all our key goals and ensure that there is continuous improvement towards goals and targets,” says Ines Shaim, Business Development Manager, Hamdan AlShamsi Lawyers & Legal Consultants.

“Most of our meetings are conducted via online platforms such as Zoom and Microsoft Teams. We also conduct podcasts and webinars on a monthly basis to raise awareness on the impact of new laws enforcement within the UAE.”

Whitehead says that the coronavirus has also affected the UAE legal and regulatory landscape. “Many arbitral bodies have established emergency arbitrator provisions which can be utilised where urgent relief is required.

“Parties often have the option to invoke emergency arbitrator provisions which enable them to obtain urgent relief before the tribunal is constituted dispensing of the need to go to court. Recourse to such provisions has increased in international commercial arbitration proceedings and has been an attractive proposition during the COVID-19 pandemic. For example, access to emergency relief can provide businesses with speedy resolution to a dispute, allowing them to turn to more pressing issues with their businesses.”

Whitehead says he expects the new legal and digital efficiencies to remain post COVID-19. “We anticipate further legal and technological measures being implemented to provide a more efficient and effective working environment for all those concerned. Another perhaps less known example has been from DIFC, which implemented emergency measures in light of COVID-19 in the form of Presidential Directive No. 4 of 2020, and announced the creation of a virtual labour market where relevant employees could add their information and register for employment opportunities. This, and other initiatives, have been important during the pandemic, and are likely to continue given the restrictions businesses are faced with and should allow for a more streamlined, cost effective and user friendly service, to meet business demands and needs.”