Dubai Court of Appeal refuses to enforce a foreign arbitral award under the New York Convention
In a judgment dated 30 March 2016 in the case of Fluor v Petrixo Oil & Gas, the Dubai Court of Appeal refused to enforce a foreign award that was issued in an ICC arbitration with a London seat.
The Dubai Court of Appeal refused to enforce the foreign award on the basis that no evidence had been submitted to establish that the UK had signed and ratified the New York Convention; and that such evidence was required in order to show that the UK courts would reciprocate in respect of the enforcement of awards issued in the UAE.
This decision has surprised arbitration practitioners in the UAE and beyond, as it is well known that the UK has been a New York Convention contracting state since 1975. In addition, it is also well known that the UAE became a New York Convention contracting state in 2006 without making any reservation to limit its application to the enforcement of awards from other contracting states (the so called "reciprocity reservation" that many contracting states elected to make when signing and ratifying the New York Convention).
The Fluor judgment has been appealed to the Dubai Court of Cassation, which is the highest court in Dubai.
The Dubai Court of Cassation has previously provided a clear indication (in the Macsteel case in 2012) that the onshore UAE courts should apply the New York Convention without entertaining technical or procedural objections that often delay and complicate the enforcement of domestic awards in the UAE. However, the Fluor case demonstrates that the enforcement of awards in the onshore UAE courts remains complex and unpredictable.
We will be following the Fluor case closely to see if the Dubai Court of Cassation takes the opportunity to confirm (as it did in the Macsteel case in 2012) that the UAE should be an "arbitration friendly" jurisdiction when it comes to the enforcement of foreign awards.