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Other legal developments in the UAE

DIFC Court decision on the enforcement of arbitral awards between the DIFC and Dubai

The DIFC Court of First Instance decision in Banyan Tree Corporate PTE Ltd v Meydan Group LLC indicates that the DIFC Courts may provide a route for the recognition and enforcement in Dubai of foreign and domestic UAE arbitral awards that have no connection to the DIFC.

In Banyan Tree, the defendant sought to resist the recognition and enforcement of a Dubai-seated arbitral award by the DIFC Courts on the basis that the DIFC Court of First Instance was not the proper forum since it was common ground that neither the parties nor the dispute had any connection to the DIFC. On that basis, the defendant argued that the DIFC Court proceedings were an abuse of process as the claimant was seeking to circumvent the need for ratification proceedings before the Dubai Court of First Instance and, potentially, the Dubai Appeal Court and Court of Cassation.

H. E. Justice Omar Al Muhair issued the DIFC Court judgment, which rejected the defendant's abuse of process argument and confirmed that the DIFC Arbitration Law provided for the recognition and enforcement of any arbitral award, irrespective of the jurisdiction in which it was made, without requiring any connection to the DIFC.

Prior to Banyan Tree, it was unclear whether the DIFC Courts would recognise and enforce an arbitral award where it was apparent that the enforcing party was seeking to bypass ratification proceedings before the Dubai Courts (which proceedings can often be lengthy and complex for domestic arbitral awards). The judgment in Banyan Tree has resolved this uncertainty, as far as DIFC law is concerned, by rejecting the defendant's "abuse of process" argument and stating that the framework of DIFC law and Dubai law provides for cooperation between the DIFC Courts and the Dubai Courts to recognise and enforce the same arbitral awards.

The judgment in Banyan Tree is further confirmation of the "arbitration-friendly" credentials of the DIFC Courts. However, it remains to be seen if the Dubai Courts will execute a Dubai-seated arbitral award which has not been ratified by the Dubai Courts.

New Arbitration Institute to be established in the DIFC

A new Disputes Resolution Authority (DRA) is to be established under Dubai law1.

Amending Law No (9) of 2004 (Concerning the Dubai International Financial Centre) will be amended to replace the DIFC Judicial Authority. The DRA will consist of the DIFC Courts, a new "Arbitration Institute" and other tribunals and bodies, and will be headed by the Chief Justice of the DIFC Courts.

The aim of the new DIFC Arbitration Institute will be to promote the DIFC as a hub for domestic and international arbitration. Further details about the structure and implementation of the Arbitration Institute are awaited.

New Saudi commercial arbitration centre

Allen & Overy partner Zeyad Khoshaim has been appointed to the board of the first commercial arbitration centre to be formed in Saudi Arabia, the Saudi Center for Commercial Arbitration (SCCA). The SCCA is expected to be based in Riyadh and will issue its own arbitration rules and guidelines for the conduct and administration of arbitrations in Saudi Arabia. This has the potential to be a milestone development for arbitration in Saudi Arabia.

Footnotes

1 Law No (7) of 2014.

Legal and Regulatory Risk Note
Middle East