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New UAE arbitration law

After many years of speculation and a number of false starts, the  UAE has issued  a new federal Arbitration Law (May 2018). This is a long-awaited and welcome development which should encourage international parties to select Dubai or Abu Dhabi as the arbitration seat in their arbitration clauses.

The new law broadly follows the UNCITRAL Model Law, and reflects best international arbitration practice.  It replaces the provisions of the Civil Procedures Law, which have governed UAE-seated arbitrations since 1992. The new Arbitration Law will take effect one month after it has been published in the UAE Official Gazette. 
 
The new Arbitration Law grants arbitral tribunals in onshore UAE-seated arbitrations with a wide range of new powers.  The new Arbitration Law also contains a number of provisions which should reduce the scope for a number of challenges that have been common in the UAE.  
 
Some of the key changes made by the new Arbitration Law include express provisions on:
 
  • the validity of arbitration agreements agreed by electronic communications (eg by email);
  •  the separability of arbitration agreements (which allows arbitration agreements/clauses to survive challenges to the validity of the wider contract);
  • the arbitral tribunal’s power to rule on its own jurisdiction (ie competence-competence);
  • granting arbitral tribunals with the power to order interim and conservatory measures;
  • granting the onshore UAE courts with express powers to grant interim relief in support of arbitrations;confirming that partial awards are enforceable
  • limiting the period for challenges to arbitral awards (ie annulment applications) to a 30 day period following notification of the arbitral award; and
  • allowing arbitral awards in UAE-seated arbitrations to be finalised and signed by the arbitrators outside of the UAE.
 With the above (and many other) changes, the new Arbitration Law is a significant development in building the UAE’s status as an “arbitration-friendly” jurisdiction. 
 
Allen & Overy participated in the consultation on this new law.
 
Further information

This article is part of the Allen & Overy Legal & Regulatory Risk Note, a quarterly publication.  For more information please contact Karen Birch – karen.birch@allenovery.com, or tel +44 20 3088 3710.

 
Legal and Regulatory Risk Note
Middle East