After a span of five years, the UAE’s first stand-alone law on arbitration viz. Federal Law No. 6 of 2018 (“Federal Arbitration Law”) has been amended by Federal Decree-Law No. 15/2023 (“Decree-Law”), announcing certain notable amendments to the Federal Arbitration Law targeting to bring them more into line with international best practice in order to meet the needs of their end-users. It is in fact a further step by the UAE legislators to cement UAE’s reputation as an arbitration hub.
Exceptions in Appointment of Arbitrators
Pursuant to Article 10 1(b) of the Federal Arbitration Law on the “requirements to be met by the arbitrator”, the arbitrator shall not be a member of the Board of Trustees, the Executive Management, or the administrative apparatus of the competent Arbitration Institution administering the arbitration case in the State. However, the Decree-Law sets out an exclusion to the above general rule, which is, “with exception to the provisions of Article 10(1)(b) of the Decree-Law, the parties may appoint an arbitrator from the Board of Directors, Board of Trustees, or who is of similar status from the competent Arbitration Institution administering the arbitration case in the State if certain requirements are met, which are: (a) regulations of the competent Arbitration Institution administering the arbitration case do not prohibit it; (b) the competent Arbitration Institution administering the arbitration case shall have a governance system specific to the organization of the work of the aforementioned arbitrator in a manner that ensures segregation of duties and impartiality, prevents conflict of interests or preferential advantage for that member compared to their counterparts, and regulates the mechanism of appointment, dismissal, and withdrawal of the arbitrator if any of the specified conditions in that regard are met; (c) the arbitrator shall not a member or chair of the Arbitral Tribunal; (d) the parties to the arbitration shall acknowledge in writing their knowledge of the arbitrator’s membership in the Board of Directors, Board of Trustees, or the supervisory or controlling authorities in the competent Arbitration Institution administering the arbitration case in the State, and there is no objection or reservation from them to such appointment; (e) the competent Arbitration Institution shall have in place a special mechanism for the safe reporting of any violations committed by the arbitrators; (f) the number of arbitration cases in which the arbitrator is a member shall not exceed five cases in one year; (g) the arbitrator shall submit a letter of undertaking to:
- Not exploit their capacity in a manner that may create conflict of interests or lead to obtaining or enjoying a preferential advantage or an interest compared to their counterparts;
- Refrain from participating, deliberating, perusing, voting, attending meetings, or influencing by any way the arbitration proceedings during the period of their appointment as arbitrator since they are members of the Board of Directors, Board of Trustees, or of a similar status from the competent Arbitration Institution administering the arbitration case; and
- Abide by any requirement or condition determined by the competent Arbitration Institution.
Procedures and Rules of Evidence
Another amendment introduced by the Decree-Law is on “Determination of the applicable proceedings”. Article 23 of the Decree-Law stipulates the parties right to agree on the procedures that the Arbitral Tribunal is required to follow to proceed with the arbitration including subjecting those procedures to the applicable rules in any Arbitration Institution or organization inside or outside the State. In the absence of an agreement to follow certain procedures, the Arbitral Tribunal may determine the procedures that it deems appropriate by virtue of the provisions of the present Law and in a manner that does not prejudice the basic principles of litigation and international agreements to which the State is a party. Article 33 of the Decree-Law concerning the “Arbitration Hearings and Proceedings” is to be read with the aforementioned Article 23 of the Decree-Law. By this amendment, the Arbitral tribunal is granted the power to decide whether to hold oral hearings for the production of evidence or for oral arguments, or whether to proceed with the proceedings solely on the basis of presenting documents and other material evidence, unless otherwise agreed by the Parties. The Arbitral Tribunal may decide to hold these hearings at an appropriate stage of the proceedings upon the request of any of the parties. Further, unless otherwise agreed by the Parties and in the absence of evidence to resolve the dispute in the applicable law, the Arbitral Tribunal have a discretionary power to determine the applicable rules of evidence provided that those rules do not prejudice the public order. The Arbitral Tribunal may evaluate the extent of admissibility or relation of the evidence submitted by any party on an incident or expertise; moreover, it may determine the time, method, form in which said evidence is exchanged between the Parties, and the method of its provision to the Arbitration Tribunal.
Modern Technological Means of Communication
Yet another amendment is made to Article 28 of the Decree-Law, whereby the Parties may agree to proceed with the arbitration and determine its place in reality or virtually by modern technological means or in technical media. In the absence of such agreement, the Arbitral Tribunal shall determine the place having regard to the circumstances of the case and convenience of the Parties. With this regard, the Arbitral Tribunal shall deliver or send the minutes of the hearing to the Parties, and the Arbitration Institution shall provide the technologies necessary to carry out the arbitration proceedings by modern technological means or in technical media in accordance with the necessary standards and controls applicable in the State.
The amendments by virtue of the Decree-Law overall are significantly aligned with the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, and provides for a more stable and secure framework for conducting arbitral proceedings in the UAE. It brings clarity on the requisite requirements for the arbitrators. On that note, we remain hopeful that the arbitrators shall possess in-depth procedural knowledge and industry-specific expertise to efficiently discharge their duties. Due respect of party autonomy will undoubtedly gauge UAE’s development as a preferred seat of international arbitration in the region. The emphasis on digital arbitration is attributed to the legislators’ drive to modernize the arbitral proceedings with utmost transparency in the UAE.
For any clarification or legal assistance with enhancing your arbitrary awareness or needs, please get in touch with our Managing Partner MR. MOHSEN MOUSTAFA, one of the best arbitration lawyers in the UAE.
Written by — Senior Legal Counsel Dr. Sherina M. Saji
