Established in 1994 as the Dubai Chamber of Commerce & Industry’s Commercial Conciliation and Arbitration Centre, a decade later, Dubai International Arbitration Centre (“DIAC/Centre“) evolved under Decree No. 10 of 2004. DIAC is the region’s most significant alternative dispute resolution (“ADR“) centre. As a non-profit organization, DIAC allows parties of all jurisdiction to settle commercial disputes outside the judicial courts.
In September 2021, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, issued Decree No. 34 of 2021, rendering DIAC as an independent entity, modernizing its corporate governance framework and reinforcing its position as the leading Arbitration Centre in Dubai. Today, DIAC is on a mission to provide unmatched ADR services by embracing excellence as a standard, integrity as a compass, and equity as a principle.
Introduction
As part of DIAC’s commitment to continuous development and efforts to consolidate Dubai’s position in the international dispute resolution hub through ADR, ensuing review by the Arbitration Court, the Centre introduced the DIAC Rules 2022, which the DIAC’s Board of Directors approved at the meeting held on 25 February 2022, and came into force on 21 March 2022.
The DIAC Rules 2022 have made substantial changes to DIAC rules 2007 (“Old Rules”), and the predominant additions include the provisions dealing with (i) multiple contracts and consolidation (Article 8), (ii) joinder of parties, (Article 9), (iii) alternative appointment process of the arbitrator(s) (Article 13), (iv) expedited proceedings (Article 32), as well as (v) exceptional procedures (Appendix-II) such as interim measures (Article 1 of Appendix-II), emergency arbitrator (Article 2 of Appendix-II), conciliation proceedings (Article 3 of Appendix-II) and appointing authority procedure (Article 4 of Appendix-II). In addition, the default seat of arbitration is now the DIFC, rather than onshore Dubai, and the fees and expenses of a party’s legal representatives are explicitly stated to be part of the costs of the arbitration, enabling the parties to seek recovery of legal costs.
The wide range of additions in the DIAC Rules 2022 replicate the newest developments in international arbitration given the evolving requirements of the business community and designed to streamline the arbitration proceedings time efficiently by maintaining a balance between party autonomy and vesting arbitrators to manage the cases proficiently and cost-effectively. The DIAC Rules 2022 “are a major step forward in reinforcing Dubai’s position as a global Centre for arbitration,” as said by Dr. Tariq Humaid Al Tayer, Chairman of the DIAC Board of Directors.
We wish the DIAC Rules 2022 align with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, cementing DIAC’s position as the pre-eminent arbitral institution for disputes in the Middle East region and one of the world’s top 5 arbitration Centers in the next two years.
In this article primarily, Appendix II of the DIAC Rules on “Exceptional Procedures” in terms of ‘interim measures and emergency arbitrator’ shall be dealt with comprehensively, and ‘conciliation proceedings’ in brief.
INTERIM MEASURES AND EMERGENCY ARBITRATOR
Interim measures prior to the constitution of the Tribunal
- The party in need of emergency interim relief may, concurrently with or following filing a request for arbitration, but prior to the Tribunal’s constitution, submit an application for emergency interim relief (“Emergency Application”) to the DIAC for appointing an Emergency The Centre shall proceed with registering an Emergency Application only if the requisite non-refundable registration fee as determined in the ‘table of fee and costs’ has been paid in full.
- Concurrently, with the submission of the Emergency Application, the applying party shall notify the other party or parties by serving a copy of the Emergency Application.
- The Emergency Application can be made on an ex parte basis if the applying party reasonably believes that:
- Such notice may jeopardize the efficacy of the Emergency Application and
- procedural law applicable to the seat of the arbitration permits such applications without notice to the other party or parties.
- The Emergency Application shall specify, together with all relevant documentation, the grounds for requiring an Emergency Arbitrator’s appointment, the nature of the relief sought, and the reasons why the applying party considers it entitled to such relief.
- If the Emergency Application is allowed, DIAC aims to appoint an emergency arbitrator within one day of receipt of the application, provided the Arbitration Court is prima facie satisfied that it is reasonable to allow such proceeding.
- Any challenge of the Emergency Arbitrator on the grounds of impartiality and independence shall be made within two business days from the Centre’s notification on Emergency Arbitrator’s appointment, and the Centre shall render the decision within two business days of receipt of such challenge.
- The Emergency Arbitrator shall issue any preliminary order as soon as reasonably practicable, having regard to the nature of the relief sought, the timetable established for the application’s determination, and whether the application is made with or without notice.
- The Emergency Arbitrator may also grant the relief sought on an extemporary basis, with detailed reasons to follow.
- The appointment of the Emergency Arbitrator shall cease following constitution of the Tribunal, and the temporary order shall cease to be binding if:
- Tribunal discharges the order,
- underlying arbitration is terminated prior to the final award or
- final award issued by the Tribunal does not give permanent effect to such order.
Precisely, the provision of appointing Emergency Arbitrator offers a swift route to interim relief in urgent circumstances, which may then be enforced by a relevant court.
Interim measures after constitution of Tribunal
- The Tribunal may, upon an application by a party, order interim measures on terms that it considers appropriate in the circumstances and issue a preliminary order in support of such measures. The Tribunal shall give summary reasons for any such order in writing.
- An interim measure is any temporary measure by which, at any time prior to the issuance of the final award, the Tribunal orders a party, for example, and without limitation, to:
- maintain or restore the status quo pending determination of the dispute;
- take action that would prevent or refrain from taking action that is likely to cause:
- current or imminent harm or
- prejudice to the arbitral process itself
- provide a means of preventing the dissipation of assets out of which a subsequent award may be satisfied;
- preserve evidence that may be relevant and material to the resolution of the dispute; or
- provide or procure security for the costs of the arbitration, including fees and expenses of the legal representatives.
- The party applying for an interim measure shall satisfy the Tribunal:
- that harm not adequately reparable by an award of damages is likely to result if the measure is not ordered;
- such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is ordered and
- that there is a reasonable possibility that the requesting party will succeed on the merits of the claim.
- the reasons why it believes that providing notice to the other party may jeopardize the efficacy of the Emergency Application; or
- by way of a statement, certify that all other parties have been notified or provide an explanation of the steps taken in good faith to notify all such parties.
- The Tribunal may require any party to promptly disclose any material change in the circumstances based on which the interim measure was requested or
- The Tribunal may require the party applying for an interim measure to provide appropriate security in connection with the
The types of interim measure granted by the DIAC Rules mirror those set out in the UAE Federal Arbitration Law No. 6 of 2018, but conditions are placed on its availability, viz. only where the harm which is intended to prevent or remedy is not adequately reparable by damages, where it substantially outweighs the harm caused to the subject Party, and the requesting Party has a reasonable possibility of success on the merits. These conditions do not appear in the Federal Arbitration Law.
CONCILIATION PROCEEDINGS
There’s no provision for conciliation proceedings in the Old Rules, though the parent body of DIAC, the 1994 Rules of the Dubai Chamber of Commerce and Industry, contained provisions for both arbitration and conciliation. The DIAC Rules 2022 introduce a mechanism for parties to agree to engage in conciliation with a view to amicably settle the dispute administered by DIAC. The framework for the conciliation procedure may be commenced with the Parties’ agreement in accordance with Article 3 of Appendix II.
It provides for a form of non-binding mediation, conditional on the Parties’ agreement, adapting some of the provisions of the arbitration ruleset where appropriate. The conciliation proceeding shall be conducted by a single conciliator appointed by the Arbitration Court (or a panel of three conciliators).
The conciliator(s) has absolute discretion to determine the procedure of the conciliation process while giving each party a reasonable opportunity to present their respective positions and having due regard to the circumstances with the consent of the parties, the conciliator(s) may at any stage make proposals for a settlement of the dispute. The conciliation shall last for two months from the transmission of the file to the conciliator(s) unless the time limit is extended by agreement of the parties.
In the event of a settlement, the conciliator(s) shall facilitate preparing a formal settlement agreement. If unsuccessful, the conciliator shall terminate the conciliation proceedings without prejudice to the merits of the dispute.
As with any legal matter, it is recommended to seek professional legal advice to ensure compliance with the latest law and regulations in the UAE. For more information and legal consultations, please contact Al Dhaheri International Law Firm and Legal Consultations.
