Arbitration Agreement Uae

Arbitration Agreement UAE: A Comprehensive Guide

When it comes to resolving disputes, arbitration has become an increasingly preferred method across the world. In the United Arab Emirates (UAE), arbitration is a well-established practice and is governed by federal legislation, including the UAE Civil Procedure Code and Federal Law No 6 of 2018 (the Arbitration Law). In this article, we will discuss the salient features of an arbitration agreement in the UAE.

What is an Arbitration Agreement?

An arbitration agreement is a written agreement between parties in a dispute that they will submit their dispute to arbitration instead of court. The agreement can be in the form of a clause in a contract or a separate agreement. In the UAE, an arbitration agreement must be in writing, either in a document signed by both parties or in an exchange of letters, emails or other means of communication that provide a record of their agreement.

Types of Arbitration Agreements

There are two types of arbitration agreements in the UAE- ad hoc and institutional. Ad hoc arbitration agreements are agreements between parties which allow them to appoint arbitrators as per their choice. On the other hand, institutional arbitration agreements are agreements which refer to the arbitration rules of a particular institution or organization such as the Dubai International Arbitration Centre (DIAC) or the Abu Dhabi Chamber of Commerce and Industry (ADCCI).

Advantages of an Arbitration Agreement

An arbitration agreement has numerous advantages such as:

1. Flexibility: Parties can agree on the rules and the procedure of the arbitration, which provides flexibility and makes it easier to reach a resolution.

2. Confidentiality: Arbitration proceedings are confidential, unlike court proceedings which are generally public.

3. Expertise: Parties can choose an arbitrator who has expertise in the subject matter of the dispute.

4. Speed: Arbitration can be quicker than court proceedings, which can be lengthy and time-consuming.

Enforceability of an Arbitration Agreement

In the UAE, an arbitration agreement is enforceable and recognized under the Arbitration Law. The courts in the UAE are required to refer parties to arbitration if there is an arbitration agreement in place, unless there are specific legal grounds to invalidate the agreement. However, for an arbitration award to be enforceable in the UAE, it must be registered with the competent court within 30 days of the date of issuance of the award.

Conclusion

An arbitration agreement can be an effective way of resolving disputes in the UAE, providing confidentiality, flexibility, and expertise that are not always available in court proceedings. It is important for parties to carefully consider the arbitration rules and procedures when drafting an arbitration agreement to ensure they can achieve the best possible outcome.