Arbitration Laws In The UAE

UAE’s Arbitration Laws are based on the UNCITRAL model law for internal commercial arbitration. However, these laws are not binding on the parties and are not mandatory. However, UAE courts do allow for the exercise of representative authority. This means that an entity’s general manager or a person holding special power of attorney can sign an arbitration agreement on its behalf. Check this to know about arbitration law firms in Dubai.

Dispute resolution in the UAE is based on the UNCITRAL model law on Internal Commercial Arbitration:

UAE has recently shown an increased interest in arbitration, an alternative dispute resolution method based on Western principles. This is especially important given the recent economic crisis that has impacted the UAE’s property and construction industries particularly hard. Many disputes in this sector involve non-performance, non-certification of milestones, extensions of time, and increased construction costs.

Although UAE lacks a Federal Arbitration Law, its Civil Procedure Code contains three brief chapters devoted to arbitration. These provisions are largely insufficient to deal with the vast majority of cases. Nonetheless, a significant number of arbitrations have been initiated in the UAE in the past 18 months, with a limited number of enforced arbitral awards.

It is not binding on all parties:

Despite the existence of UAE Arbitration Laws, many dispute resolution practitioners still regard them as non-binding. UAE courts have never explicitly interpreted Article 56(1) of the Federal Arbitration Law. As a result, it is difficult to ascertain a serious reason for requiring an arbitration proceeding.

Nevertheless, UAE courts have found that the general manager of a company has the power to arbitrate disputes and have based this authority on Articles 235 and 237 of the Federal Commercial Companies Law. This law, amended in 2015, stipulates that the general manager has full power over the company.

It is not mandatory:

Generally, UAE arbitration laws do not impose a mandatory arbitration process. However, UAE courts have established a concept of apparent authority, which depends on a particular case’s facts. In practice, this means that an entity’s general manager or a person with special powers of attorney has the authority to arbitrate a dispute.

In addition, the New Arbitration Law does not stipulate the procedure of witness testimony, which leaves it up to the tribunal’s discretion. The ADCCAC rules also leave the decision to hold a hearing to the tribunal. However, both parties must agree with the witness testimony process and comply with UAE Evidence Law.

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