Appointment of arbitrators: English Court grapples conflicting case law and clarifies relevant principles when asked to assist with appointments

In its decision in Silver Dry Bulk Company Limited v Homer Hulbert Maritime Company Limited [2017] EWHC 44 (Comm) the English Court has considered and clarified the principles which apply to an application under section 18 of the English Arbitration Act 1996 (the "Act").  Section 18 enables a party to apply to the court to exercise its powers to give directions as to the making of tribunal appointments or make the appointments itself.  The decision confirms, amid conflicting case law, that the applying party must establish a "good arguable case" that a tribunal would have jurisdiction to hear the case, and emphasises that any jurisdictional arguments remain matters for the tribunal to decide in accordance with the principle of kompetenz-kompetenz. The case is also a good reminder of the purpose of section 18, which only applies where there has been a complete failure of the appointment procedure agreed between the parties, and cannot be used to declare or confirm the validity of a tribunal's constitution.

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Dubai Arbitration Week

Dubai Arbitration Week is underway with an extensive programme of events. The CIArb Seminar opened proceedings on 13 November including a keynote address by Vincent Moran QC of Keating Chambers on "Turbulent and troublesome tribunals and the appearance of bias" and panel discussion on "What makes an effective and efficient seat in international arbitration?". Other events across the coming week include a keynote address from Jacomijn van Haersolte-van Hof (Director General, LCIA) on diversity in international arbitration, the MENA Young Arbitrators Conference, at which senior associate Robert Stephen will moderate a Tylney Hall style Q&A session, and the third annual GAR Live Dubai Symposium co-moderated by partner Caroline Kehoe.

Attracting an ever growing number of practitioners from around the world, Dubai Arbitration Week consolidates Dubai's position as an arbitration hub and the main centre for the resolution of commercial disputes in the Middle East. For more information, please see here.

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THE DRAFT DIAC RULES

Following changes brought in by a number of other arbitral institutions including the DIFC-LCIA Arbitration Centre, the Dubai International Arbitration Centre is to amend its Arbitration Rules to bring them in line with modern arbitration practice and to ensure its offering remains competitive

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Qatar- Another positive step forward in the enforcement of foreign arbitral awards

In the past, Qatar's application of the New York Convention has been somewhat unpredictable. A recent decision of the Qatari Court of Cassation suggests that Qatar is moving towards overcoming the perception that it is an arbitration-unfriendly jurisdiction.

Qatar's status as a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") is often cited as an advantage when selecting arbitration as the dispute resolution mechanism for contracts involving a Qatari party. However, enforcement of arbitral awards in Qatar can be inconsistent and some award creditors have found their awards being annulled by the local courts.

In Case No. 173 of 2016, the Qatari Court of Cassation overturned the rulings of the lower courts to find that there was no basis for not enforcing an ICC Paris-seated award in Qatar, which had met the requirements under Article IV of the New York Convention.

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Onshore Dubai partners with Offshore: DIAC looks to develop “closer ties” with the DIFC

The Dubai International Arbitration Centre (“DIAC”) is now implementing its new strategy, designed to develop its international presence and dispel any notion that it is an 'onshore' only institution.

On 27 September 2016, DIAC, arguably the leading arbitration centre based in onshore Dubai, inaugurated a new office in offshore Dubai, situated within the Dubai International Financial Centre (“DIFC”), cementing its new strategy of cooperation with the DIFC Dispute Resolution Authority (“DRA”). Prior to the move, on 20 September 2016, DIAC entered into a memorandum of understanding (the “DIAC-DIFC Memorandum”) with the DRA, the purpose of which is stated as being to “execute, consult, cooperate and exchange information….in areas of mutual interest that will further enhance their respective strategic interests and objectives”.

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Agreeing to Arbitrate in the UAE: “Apparent Authority” and Article 25 of the UAE Commercial Companies law

It has long been believed that an arbitration clause in a contract could not be enforced against a UAE company unless the person signing the contract had specific authority to bind the company to arbitration, and not simply authority to enter into the contract. In Ginette PJSC and (1) Geary Middle East FZE and (2) Geary Limited, however, the DIFC Courts held that an arbitral award should be recognised and enforced notwithstanding that the individual who signed the arbitration agreement (which was contained in a settlement agreement) on behalf of an Award Debtor did not have express authority to bind the Company to arbitration. 

The Award Debtor, Ginette PJSC (the “Company”), sought to set aside the DIFC-LCIA arbitral award on the basis that Article 103 of Federal Law No. 8 of 1984 (the “Old UAE Companies Law”) provided that a private joint stock company could only be authorised to enter into an arbitration agreement if the power had been granted to the individual in the company’s articles of association or if authority was given by way of a shareholder resolution or a power of attorney. Although the Company’s articles of association granted its board of directors the authority to enter into arbitration agreements, the Executive Managing Director, who signed the settlement agreement on behalf of the Company was not, it claimed, a member of the board. The Company argued that the DIFC Court should set aside the award under Article 41(2)(a)(i) of DIFC Law No. 1 of 2008 (the “DIFC Arbitration Law”) because the arbitration agreement was not valid under the law.  Continue reading

Abu Dhabi Global Market Courts secure co-operation arrangements with UAE Ministry of Justice and Federal Courts

Following on from our previous post on the enactment of the Abu Dhabi Global Market Arbitration Regulations 2015 and the creation of a new seat of arbitration in the Middle East, the Courts of the Abu Dhabi Global Market (“ADGM”) have entered into a memorandum of understanding with the United Arab Emirates Ministry of Justice (the “MoU”).

The ADGM Courts are frequently compared to the Courts of the Dubai International Finance Centre (“DIFC”) as they both operate as autonomous common law jurisdictions, operating with an independent judiciary (largely made up of experienced common law justices), carved out from the civil law jurisdictions in which they are situated, the Emirates of Abu Dhabi and Dubai respectively. However, one key difference between the ADGM and DIFC Courts is that, rather than merely applying common law principles, the ADGM directly incorporates English common law rules and principles into its legal system.

The MoU marks an important step for the integration of the ADGM Courts into the UAE legal system. The Preamble to the MoU states that the ADGM Courts “form part of the judicial system of the UAE” and, importantly, should therefore be considered UAE Courts for the purposes of international treaties.

The MoU also provides for judicial cooperation between the Federal Courts of the UAE. Clause (2)5 of the MoU states that the Federal and the ADGM Courts are to “take all necessary measures that will ensure that enforcement of the ADGM Courts’ judgments and arbitration awards issued in the ADGM” can be sought before the Federal Courts of the UAE. Importantly, ADGM judgments and arbitral awards should be enforced by the Federal Courts “without examining the substance of the dispute”.

However, given that the three Emirates with arguably the most commercial activity – Dubai, Ras Al Khaimah and Abu Dhabi itself – have elected to opt out of the UAE’s Federal judicial system (and are therefore not Federal Courts), the practical benefits of the MoU may be limited. Similar memoranda will be required to institute the same relationship with the Courts of these Emirates.

Nonetheless, what the introduction of the MoU does clearly demonstrate is the political support the ADGM enjoys from the UAE authorities and the overriding intent that the ADGM be promoted as an accommodating and arbitration friendly forum. Judging by the development of the DIFC’s relationship with the Courts of Dubai and with other courts across the globe, the MoU is likely to be the first of many such memoranda.

For further information, please contact Caroline Kehoe, Partner, Stuart Paterson, Partner, Craig Shepherd, Partner, Joseph Bentley, Associate or your usual Herbert Smith Freehills contact.

Caroline Kehoe
Caroline Kehoe
Partner
+971 4 428 6302
Stuart Paterson
Stuart Paterson
Partner
+ 971 4 428 6308
Craig Shepherd
Craig Shepherd
Partner
+971 4 428 6304
Joseph Bentley
Joseph Bentley
Associate
+971 4 428 6350