The updated DIFC-LCIA Arbitration Rules 2021 (“2021 Rules”) entered into force from 1 January 2021.
The amendments introduce changes intended to promote the fair, efficient, and expeditious conduct of arbitrations. In this update, we summarise the key features.
For the first time, the Courts of the Dubai International Financial Centre (“DIFC”) have issued an anti-suit injunction in favour of a party to pending DIFC-LCIA arbitration proceedings restraining the Defendant from pursuing litigation proceedings in the “onshore” Dubai courts (the local courts outside the economic free zones within the Emirate of Dubai). The decision sends a clear and robust message that parties with contracts that provide for arbitration with a DIFC seat must respect this choice of forum and has been welcomed by the global arbitration community.
Earlier this year, the English High Court handed down a judgment (A v B [2020] EWHC 952 (Comm)) delivering a stern warning to claimants who were considering the enforcement of an arbitration award which did not establish a clear “right to payment” (see our previous blog post in connection with that decision.) In brief, the claimant’s leave to enforce a tribunal award was set aside on grounds that there was a triable issue of fact in respect to whether the acceleration provisions of the consent award had been triggered for the amount claimed. As a result, the court gave directions for a fresh hearing to hear disputed factual issues and to determine whether or not permission to enforce the award should be given.
In a judgment handed down by the English High Court last month (A v B [2020] EWHC 952 (Comm)), the court delivered a stern warning to claimants considering the enforcement of an arbitration award which fails to establish a clear “right to payment”. The judgment also serves as a timely reminder that an application for leave to enforce an arbitration award should be made on solid legal grounds, and with full disclosure of all relevant points if made on an ex parte basis.
What are the differences in approach to the enforcement of arbitration awards across EMEA? In our latest arbitration podcast series, we take a detailed look into the reality and nuances of enforcement across the EMEA region.
Entering into a contract with an entity owned or controlled by the state poses unique challenges not faced when dealing with a private commercial counterparty. Parties should be aware of certain distinctive features of negotiating with a state entity from the start of any commercial relationship. It is particularly important for parties to consider these implications when conducting business in the Middle East given that:
i. state entities play a major role in the procurement of major projects, particularly in GCC countries; and
ii. the reconstruction of infrastructure and the development of natural resources in countries such as Iraq require significant foreign investment in the form of contracts with state-owned entities.
Determining whether or not a commercial party is dealing with a state entity is not always a straightforward process in the Middle East. As such, parties should take extra care and consider the following factors at the outset:
a) the capacity of the entity to enter into an arbitration agreement;
b) the ability of the state in question to raise a defence of sovereign immunity in the future; and
c) the investment treaty protections that a company may be able to utilise.
In this article, we set out the key factors that parties should consider when negotiating with a state entity in order to maximise the protections available should a dispute arise at a later point.
On 17 October 2018, the Abu Dhabi Global Market Arbitration Centre (ADGMAC) officially opened its doors to any parties looking to resolve their disputes through arbitration or mediation. The ADGMAC, based in Al Maqam Tower, Al Mayrah Island, offers parties a venue to hold their hearings in Abu Dhabi which is equipped with state-of-the-art technology and facilities.
On 3 May 2018, HH Sheikh Khalifa bin Zayed Al Nahyan, the President of the United Arab Emirates, issued Federal Law No. 6 of 2018 promulgating the country’s much anticipated new Federal Arbitration Law (the “New Law“). The New Law, which is heavily based on the UNCITRAL Model Law on International Commercial Arbitration, will replace and supersede Articles 203 to 218 of the Civil Procedures Code (Federal Law No. 11 of 1992 (as amended)) which currently govern arbitrations seated onshore in the UAE (the “Civil Procedure Code“). The New Law applies to any arbitration conducted in the UAE, unless the parties have agreed that another law should apply, (Article 2) and to ongoing arbitration proceedings, even if the arbitration agreement was concluded before the Law came into effect (Article 59).
The New Law will take affect one month after its date of publication in the Official Gazette. This article highlights some of the most significant developments and identifies key similarities and differences between the New Law and the UNCITRAL Model Law on which it is based. Continue reading
The President of the United Arab Emirates has issued Federal Law No. 6 of 2018, promulgating the much anticipated new federal arbitration law in the UAE. As we reported in March, the new federal law, which is based on the UNCITRAL Model Law, will replace and supersede Articles 203 to 218 of the Civil Procedures Law No. 11 of 1992, which currently govern arbitrations seated onshore UAE, and will provide a properly structured procedural framework for domestic and international arbitrations seated in the UAE. The law will be published in the Official Gazette of the Union, and will come into effect one month after the date of publication.
Craig Shepherd, Head of the Global Contentious Construction Practice at Herbert Smith Freehills and Head of the Dubai Dispute Resolution team, commented: “The new Federal Arbitration Law is a very exciting development for the whole of the UAE. While the state has developed a reputation as the pre-eminent seat in the Middle East for arbitration, it did risk falling behind other nations who have introduced comprehensive new laws. That issue has now been addressed, and I am sure the new law will help cement the UAE’s position in the global arbitration market.”
In the last few months, there have been two notable developments in the United Arab Emirates relating to arbitration. First, it was announced on 27th February 2018 that the Federal National Council of the United Arab Emirates has approved the highly anticipated draft of the Federal law on Arbitration (understood to be based on the UNCITRAL Model Law on International Commercial Arbitration). Second, the Legal Affairs Department of the Government of Dubai has clarified that all lawyers who are licensed in Dubai have the right of audience before any arbitration tribunal in Dubai, including foreign lawyers, and that visiting lawyers may also appear before arbitral tribunals in Dubai. These significant and welcome developments are discussed further below.
