Global developments brought to you monthly by the ITA Board of Reporters
General Editor: Roger Alford
Managing Editors: Elina Mereminskaya & Monique Sasson
Volume XVI - Issue 9
October 2018
 
 
 
 
Recent Developments (1)
 
 
Gender parity achieved in the Madrid Court of Arbitration
 
As one of the signatories of the Equal Representation in Arbitration Pledge, the Madrid Court of Arbitration intensified its efforts to increase the number of women appointed as arbitrators in March 2018. In September 2018, the Madrid Court of Arbitration announced that it had achieved gender parity in arbitrator appointments occured since March 2018.

In particular, 12 out of the 25 arbitrators appointed by the Madrid Court of Arbitration in the past semester were women, and the Court included at least 50% female arbitrators in the lists of arbitrator candidates it presented to the parties. Further, the amount in dispute in the cases in which the Court has appointed female arbitrators is higher than the amount in dispute in the cases in which the Court designated male arbitrators.
 
Author(s): Esperanza Barron Baratech, Latham & Watkins LLP; Fernando Mantilla-Serrano, Latham & Watkins LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Spain; Spain
 
Spain Full text
 
 
 
 
 
Recent Cases and Awards (10)
 
 
OGH – 5 Ob 188/17h, Supreme Court of Justice of Austria, 5 Ob 188/17h, 13 February 2018
 
In a recent case, the Austrian Supreme Court (OGH) confirmed that an arbitration clause contained in a contract is generally an ancillary agreement that shares the legal fate of the main contract. This rule applies in the absence of any other intent of the parties.
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
Austria Full text Full text as PDF
 
 
 
 
 
OGH – 18 OCg 1/17x, Supreme Court of Justice of Austria, 18 OCg 1/17x, 20 March 2018
 
The Austrian Supreme Court (OGH) clarified that even if the arbitral tribunal wrongly applies the agreed law, it does not exceed its competence (ultra petita). The incorrect application of the applicable law may, however, be contrary to public policy.
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
Austria Full text Full text as PDF
 
 
 
 
 
OGH – 18 ONc 2/18s, Supreme Court of Justice of Austria, 18 ONc 2/18s, 17 April 2018
 
The Austrian Supreme Court (OGH) confirmed that the initiation of insolvency proceedings regarding a party’s assets discontinues pending arbitration proceedings pursuant to Section 7 of the Austrian Insolvency Code (Insolvenzordnung, IO).

According to the OGH, the initiation of insolvency proceedings regarding a party’s assets also discontinues the pending proceedings before state courts to appoint an arbitrator (Austrian Supreme Court, Der Oberste Gerichtshof, OGH, 17 April 2018, 18 ONc 2/18s).
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
Austria Full text Full text as PDF
 
 
 
 
 
OGH – 6 Ob 14/18d, Supreme Court of Justice of Austria, 6 Ob 14/18d, 28 February 2018
 
Section 617 of the Austrian Code of Civil Procedure (Zivilprozessordnung, ZPO), provides for specific restrictions applicable for arbitration agreements with consumers. Thus, it is practically highly relevant whether a shareholder of a company is to be considered as a consumer or an entrepreneur. In a recent decision, the Austrian Supreme Court (OGH) held that the status of whether a shareholder is a consumer or an entrepreneur is to be assessed from a commercial point of view. The decisive factor is as to what extent the shareholder can control the management decisions of the company (Austrian Supreme Court, Der Oberste Gerichtshof, OGH, 28 February 2018, 6 Ob 14/18d).
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
Austria Full text Full text as PDF
 
 
 
 
 
A v. E, Supreme Court of Finland, Case No. 2018:48, Decision No. S2017/54, 26 June 2018
 
The Finnish Supreme Court evaluated whether the arbitrator had not given a party sufficient opportunity to present his case pursuant to Section 41 (1) (4) of the Finnish Arbitration Act (“FAA”). The respondent had raised arguments against claimant’s claims only after the oral hearing and the arbitral tribunal had not taken those arguments into account in the award. The Finnish Supreme Court found that the arbitral tribunal had acted within its discretion and the arbitral award was not set aside.  
 
Author(s): Anna-Maria Tamminen, Hannes Snellman Attorneys
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Finland
 
Finland Full text Full text as PDF
 
 
 
 
 
Société Saad Buzwair Automotive Co. v. Société Audi Volkswagen Middle East FZE LLC, Court of Appeal of Paris, , 27 March 2018
 
Setting aside the arbitral award, the Paris Court of Appeal confirms its strong stance when it comes to the arbitrator’s duty to of disclosure: if public information available before the beginning of the arbitration can be easily retrieved by the parties, one cannot reasonably expect that parties continue to peruse all the public sources of information likely to contain the name of the arbitrator and any related persons and entities or continue their research after the beginning of the proceedings.
 
Author(s): Nataliya Barysheva, CastaldiPartners; Valentine Chessa, CastaldiPartners
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: France; France
 
France Full text Full text as PDF
 
 
 
 
 
Société ELCIR v. SA Bouygues Bâtiment Ile de France, Court of Appeal of Paris, , 29 May 2018
 
On 29 May 2018, the Paris Court of Appeal upheld an application to set-aside an arbitral award on the ground that the arbitral tribunal was not lawfully constituted. By setting aside the award, the Paris Court of Appeal gives a clear signal to the parties and arbitrators that reluctance in arbitrator’s disclosure is not allowed.
 
Author(s): Nataliya Barysheva, CastaldiPartners; Valentine Chessa, CastaldiPartners
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: France; France
 
France Full text Full text as PDF
 
 
 
 
 
Government Entity v. Government Entity, Fifth District Court in Civil Matters of the Federal District, I.11o.C.26 K (10a.)RC 356-2016, 17 April 2018
 
A Collegiate Court in Mexico declared that an arbitral tribunal lacks legal standing to request the review of an amparo decision suspending the rendering of the final award.
 
Author(s): Cecilia Flores Rueda, Flores Rueda Abogados
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Mexico
 
Mexico Full text Full text as PDF
 
 
 
 
 
Centro Médico de Salud Siglo XXI, S.L. v. Inmuebles Danibes, S.L., Superior Court of Justice of Madrid, 36/2017, 05 September 2017
 
The Superior Court of Madrid reiterates that parties cannot settle the outcome of a procedure to set aside an arbitral award. Neither can a party’s admission of facts be equated to a settlement which would bind the Court.
 
Author(s): Esperanza Barron Baratech, Latham & Watkins LLP; Fernando Mantilla-Serrano, Latham & Watkins LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Spain; Spain
 
Spain Full text Full text as PDF
 
 
 
 
 
Centro Médico de Salud Siglo XXI, S.L. v. Inmuebles Danibes, S.L., Superior Court of Justice of Madrid, 64/2017, 12 July 2017
 
The Superior Court of Madrid sets aside an award and considers the arbitral agreement to be invalid, due to the lack of impartiality of the arbitral institution.
 
Author(s): Esperanza Barron Baratech, Latham & Watkins LLP; Fernando Mantilla-Serrano, Latham & Watkins LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Spain; Spain
 
Spain Full text Full text as PDF
 
 
 
 
 
Legislation (2)
 
 
Mexican Chamber of Deputies approves the draft Decree for the General Law on Alternative Dispute Resolution
 
On April 26, 2018, the Mexican Chamber of Deputies approved the draft Decree for the General Law on Alternative Dispute Resolution and amended, repealed and added various provisions of the Code of Commerce on of commercial conciliation. 

Previous to the draft Decree recently approved, two reforms to the Mexican Constitution were published: the first on February 5, 2017, on articles 25 and 73, to empower Congress in the issuance of "the general law that establishes the principles and bases on alternative dispute resolution mechanisms, except of criminal matters; and the second on September 15, 2017 to articles 16, 17 and 73, for the authorities to privilege  dispute resolution over  procedural formalities. Following, the project on the General Law on Alternative Dispute Resolution, and provisions on commercial conciliation for the Mexican Arbitration Law (Book V, Title IV of the Code of Commerce) were drafted.

There was a strong trend to regulate commercial mediation separate from civil and family mediation, fortunately this was endorsed in the project. Hence, the following shall not apply to commercial mediation: i) Provisions applicable to mediation provided by the State Superior Courts of Justice; and ii) The official certification of civil and family mediators and the registration of settlement agreements resulting from mediations before a judicial authority.

The project should be ruled by the Senate on its legislative period starting this September. [1]

[1] Editor’s note:

Although it would have been more convenient to adopt the UNCITAL Model Law on International Commercial Conciliation of the UNCITRAL, this Project did not do so.
 
Author(s): Cecilia Flores Rueda, Flores Rueda Abogados
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Mexico
 
Mexico Full text
 
 
 
 
 
UAE Federal Arbitration Law No. 6 of 2018
 
Arbitration in the UAE is governed by the Federal Arbitration Law No. 6 of 2018 (“UAE Arbitration Law”) since 15 June 2018. The UAE Arbitration Law is largely modelled on the UNCITRAL Model Law on International Commercial Arbitration, as adopted by the United Nations Commission on International Trade Law of 1985 and amended in 2006 (“UNCITRAL Model Law”). The UAE Arbitration Law repeals Chapter Three, Volume II (the arbitration chapter) contained in Articles 203 to 218 of the UAE Civil Procedures Law No. 11 of 1992 (“CPC”), which previously governed arbitration in the UAE. The newly-enacted arbitration law endeavours to provide clarity to a number of issues arising out of, or in connection to, onshore UAE arbitration proceedings. While the newly-enacted law is largely based on the UNCITRAL Model Law, the UAE Arbitration Law also comprises of several provisions that diverge from it. These include, amongst others, provisions on confidentiality and third party joinder. We will discuss these divergences further in this commentary. 

The Scope of Application

The UAE Arbitration Law came into force one month following the date of its publication in the Official Gazette (Article 61 of the UAE Arbitration Law). The UAE Arbitration Law was published in the Federal Official Gazette No. 630 of 15 May 2018 and came into effect on 15 June 2018. The newly-enacted law applies retrospectively to all ongoing arbitrations (including arbitrations arising out of existing arbitration agreements) and future arbitrations (Article 59 of the UAE Arbitration Law). The UAE Arbitration Law applies to (a) arbitrations seated in the UAE, unless the parties agreed otherwise, (b) commercial arbitrations taking place outside of the UAE, where the parties have agreed that the UAE Arbitration Law is to govern the arbitration, and (c) arbitrations arising out of a contractual or non-contractual legal relationship governed by the laws of the UAE, unless excluded by mandatory UAE laws (e.g., agency disputes) (Article 2 of the UAE Arbitration Law). The UAE Arbitration Law does not apply to the DIFC and the ADGM by virtue of Federal Law No. 8 of 2004 Regarding the Financial Free Zones. Arbitrations in the DIFC and the ADGM will continue to be governed by their own arbitration laws, that is to say the DIFC Arbitration Law No. 1 of 2008 and the ADGM Arbitration Regulations 2015, respectively.

The UAE Arbitration Law applies to both domestic and international arbitration proceedings, and expressly distinguishes between the two. The CPC did not previously draw a distinction between domestic and international arbitration. In addition, the UAE Arbitration Law adopts an extraterritorial approach. An arbitration will be considered an international arbitration, even where it is conducted in the UAE, if (a) the parties have their principal place of business located in two or more different countries at the time of entering the arbitration agreement (in the absence of a principal place of business, the place of domicile will be taken into consideration), (b) the venue of arbitration (agreed on by the parties or determined by the arbitration agreement), the place where a substantial part of the parties’ commercial obligations were implemented, or the place most relevant to the dispute are located outside the country in which the principal place of business (of any of the parties) exist, (c) the subject matter of the dispute is connected to more than one country, or (d) the parties expressly agreed that the subject matter is connected to more than one country (Article 3 of the UAE Arbitration Law). 

The Use of Technology

The UAE Arbitration Law permits the use of “modern means of communications” in a number of instances, in an effort to modernise arbitral proceedings and make them more efficient and cost-effective. While the UAE Arbitration Law provides that the arbitration agreement must be evidenced in writing, the parties can meet this requirement through any correspondence, including electronic mails (Article 7 of the UAE Arbitration Law). The UAE Arbitration Law also provides that the arbitral tribunal may hold arbitration hearings through modern means of telecommunication (e.g., video conferencing) (Article 28 and 33 of the UAE Arbitration Law). Similarly, the arbitral tribunal is permitted hear the statements of witnesses and experts through modern means of telecommunication (Article 35 of the UAE Arbitration Law). In addition, the UAE Arbitration Law permits an arbitrator to sign the award by an electronic means (e.g., e-signature), unless otherwise agreed by the parties (Article 41.4 of the UAE Arbitration Law).

The Competent Court 

The UAE Arbitration Law allows for judicial assistance from the UAE courts in relation to the arbitral process. The UAE Arbitration Law designates the local or Federal Court of Appeal as the specialised court (herein referred to as “Competent Court”) to hear arbitration-related cases. Article 1 of the UAE Arbitration Law defines the term ‘Court’ as “federal or local Court of Appeal, which is agreed upon by the parties or within the jurisdiction the arbitration falls under”. The Competent Court has exclusive jurisdiction to consider arbitration-related matters referred to in the UAE Arbitration Law (which will be discussed in the preceding sections of this commentary) until the completion of the arbitral proceedings (Article 18.1 of the UAE Arbitration Law). 

Generally, the arbitral tribunal or party will request judicial assistance from the governing Emirate’s Court of Appeal (e.g., the Dubai Court of Appeal would have jurisdiction over arbitration proceedings seated in onshore Dubai (excluding the offshore DIFC)), save for certain exceptions (e.g., where a government entity is a party to the arbitration). The Federal Court of Appeal usually supervises arbitrations that include one or more government entities as a party to the arbitration agreement, and other arbitration-related matters that are related to the State. The Federal Court of Appeal also provides for ‘emergency jurisdiction’, even where it lacks jurisdiction otherwise, in cases such as preliminary applications for attachment of assets or urgent applications for the transfer of assets. In the past, the CPC did not designate a court to deal with arbitration-related cases (which led to jurisdictional problems where the parties were not otherwise subject to the jurisdiction of the UAE courts). Previously, the party or arbitral tribunal requesting judicial assistance applied to the competent Court of First Instance (the first level of the UAE courts), unlike the current situation where the party or arbitral tribunal may apply directly to the competent Court of Appeal. The previous approach of the CPC hindered the arbitration proceedings by allowing two possible levels of appeal, unlike the current situation where parties can only appeal to the Court of Cassation.

Furthermore, the UAE Arbitration Law provides that the UAE courts will dismiss any action that falls within the scope of an arbitration agreement, provided that the respondent raises a judicial objection based on the existence of the arbitration agreement before making any motions or pleas on the subject matter and the court does not find the arbitration agreement void and unenforceable (Article 8 of the UAE Arbitration Law). 

The Capacity to Agree to Arbitration

The UAE Arbitration Law provides that the signatory must be authorised to enter into the arbitration agreement, otherwise the arbitration agreement is considered null and void (Article 4 of the UAE Arbitration Law). This provision is a divergence from the UNCITRAL Model Law. A representative of a juridical person must have specific authority to enter into an arbitration agreement. In addition, Article 58.2 of the CPC (which has not been repealed by the enactment of the UAE Arbitration Law) states that "[n]o admission or waiver of a right alleged or settlement or submission to arbitration…or any other disposition in respect of which the law requires special authorisation may be made without special authority". A "special authority" is an express authority to agree to arbitration, usually in the form of a Power of Attorney or Board Resolution. In the case of a limited-liability company (“LLC”), the general manager listed on the LLC trade licence is usually the authorised signatory. In the case of other corporate forms, a specific power of attorney or company authority is required to confirm that the signatory is duly authorised. 

In addition, the UAE Arbitration law provides that matters in which conciliation is not possible are not arbitrable (Article 4.2 of the UAE Arbitration Law). These matters include matters related to public policy, criminal matters and family matters. Also, certain commercial agency and distributorship disputes (see e.g. Articles 6-7 of the UAE Federal Commercial Agency Law No.18 of 1981, as amended) and all labour disputes (see e.g. UAE Federal Labour Law No.8 of 1980, as amended) may not be resolved through arbitration. In recent years, Dubai and Abu Dhabi court judgments clarified that real estate disputes and disputes concerning the circulation of wealth are arbitrable, save for issues concerning the registration of property ownership.  

The Arbitration Agreement

The UAE Arbitration Law provides that the arbitration agreement may be concluded for future disputes or after the dispute arises. The arbitration agreement may be a separate agreement, incorporated by reference, or included in the main contract (Article 5 of the UAE Arbitration Law). In addition, the UAE Arbitration Law recognises the severability of arbitration agreements, in line with UNCITRAL Model Law. The nullity, rescission or termination of the main contract does not have any effect on the arbitration clause and does not suspend the arbitral proceedings, provided that the arbitration clause is considered valid (e.g., is not deemed null and void due to the absence of a party’s legal capacity) (Article 6 of the UAE Arbitration Law). While the former CPC provisions on arbitration did not expressly provide for this, the severability of the arbitration agreement is also a well-established concept in arbitration institutions (e.g., Dubai International Arbitration Centre (“DIAC”) and Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”)).

The UAE Arbitration Law further provides that the arbitration agreement must be evidenced in writing. This requirement may be fulfilled by an exchange of correspondence, including electronic mails. It may also be fulfilled by reference to an arbitration clause contained in another document and by oral agreement, if made during a court proceeding and recorded in a judgment (Article 7 of the UAE Arbitration Law).

The Arbitral Tribunal

The UAE Arbitration Law provides that the arbitral tribunal will be constituted by the agreement of the parties and must comprise an odd number of arbitrators. In the absence of the parties’ agreement, the default number of arbitrators is three, unless otherwise provided by the applicable institutional rules chosen by the parties (Article 9 of the UAE Arbitration Law). The UAE Arbitration Law further provides that an arbitrator should not be (i) a minor, (ii) legally incapacitated, or (iii) stripped of his/her civil rights by reason of bankruptcy or criminal conviction (Article 10.1 of the UAE Arbitration Law). The arbitrator must also be independent and impartial (Article 10.4 of the UAE Arbitration Law). The UAE Arbitration Law provides that no arbitrator will be excluded by reason of nationality or gender, unless otherwise agreed by the parties (Article 10.3 of the UAE Arbitration Law). In addition, the arbitrator cannot be a member of a board of trustees or administrative board of an institution administering arbitrations in the UAE (Article 10.2 of the UAE Arbitration Law). Furthermore, the UAE Arbitration Law forsees the Ministry of Economy issuing a Code of Ethical Conduct for arbitrators in consultation with arbitral institutions in the UAE (Article 58.1 of the UAE Arbitration Law). 

The UAE Arbitration Law provides that parties may agree on procedures for the appointment and removal of arbitrators (Articles 11.1 and 15 of the UAE Arbitration Law). In the absence of the parties’ agreement, the UAE Arbitration Law provides default procedures with stringent time limits. 

The UAE Arbitration Law permits the arbitral tribunal to rule on its own jurisdiction, including objections in relation to the nullity, non-existence, or expiration of an arbitration agreement. The arbitral tribunal may rule on a plea either as a preliminary question or in a final award (Article 19.1 of the UAE Arbitration Law). A party may, in the event where the tribunal rules as a preliminary question that it has jurisdiction, request the Competent Court to review and make its own determination on the matter within 15 days of notification (Article 19.2 of the UAE Arbitration Law). Previously, the CPC adopted a similar approach. However, unlike the UAE Arbitration Law, the CPC did not set time limits for a party to request the UAE courts to rule on the arbitral tribunal’s jurisdiction.  

Furthermore, the UAE Arbitration Law provides that an arbitral tribunal can decide on the award by majority, unless otherwise agreed by the parties. The president of the arbitral tribunal may issue an award where there is no majority, unless otherwise agreed by the parties (Article 12 of the UAE Arbitration Law). The UAE Arbitration Law permits dissenting opinions provided that the arbitral tribunal includes the dissenting opinion(s) in the award. Dissenting opinions are thus considered to be an integral part of the award (Article 41 of the UAE Arbitration Law). 

Interim Measures

The UAE Arbitration Law empowers an arbitral tribunal, unless otherwise agreed by the parties, to order interim or precautionary measures as it considers fit, upon the request of a party or on its own motion. The arbitral tribunal may order an interim or precautionary measure to (a) preserve evidence that may be material to the resolution of the dispute, (b) maintain goods that constitute part of the subject matter of the dispute (e.g., order to deposit the goods with a third party or sell the perishable goods), (c) preserve the assets and property out of which a subsequent award may be satisfied, (d) maintain or restore the status quo pending determination of the dispute, or (e) order an action (or refrain from taking an action) to prevent current or imminent harm or prejudice to the arbitral process (Article 21.1 of the UAE Arbitration Law). The arbitral tribunal may require the party (requesting the interim or precautionary measure) to submit a security for costs. The arbitral tribunal may also require the party (requesting the interim or precautionary measure) to bear the damage resulting from the enforcement of the order, where the tribunal subsequently decides that the party was not entitled thereto (Article 21.2 of the UAE Arbitration Law). The UAE Arbitration Law also empowers the arbitral tribunal to amend, suspend or repeal the order of the interim measure, upon the request of a party or on its own motion, in certain cases and under a prior notice sent thereby to the parties (Article 21.3 of the UAE Arbitration Law). 

The Competent Court may, upon the request of a party and after obtaining the written permission of the arbitral tribunal, order the enforcement of the interim order as it deems necessary (Article 21.4 of the UAE Arbitration Law). The Competent Court may also, upon the request of a party or the arbitral tribunal, order interim or precautionary measures, as it deems appropriate, for existing or future arbitration proceedings, whether prior to or during the arbitration proceedings (Article 18.2 of the UAE Arbitration Law). The arbitral proceedings may continue notwithstanding any application for interim or conservatory measures relating to the arbitration, and the party’s application to the Competent Court does not constitute a waiver to the arbitration agreement (Article 18.3 of the UAE Arbitration Law). 

In the case where a party obtains a precautionary attachment, the arbitral proceedings are deemed to have commenced on the date of the notification of the request for arbitration (Article 27.2 of the UAE Arbitration Law). The party usually obtains the precautionary attachment prior to commencing arbitration proceedings. The party must then initiate arbitration proceedings within eight days from obtaining the interim measure, and must satisfy the court of the commencement of the arbitration accordingly. 

The introduction of provisions on interim measures is a noteworthy development for the UAE. Previously, the CPC did not confer on arbitral tribunals this power to order interim relief. It was unlikely that the local UAE court would enforce any order for interim relief made by an arbitral tribunal since the CPC did not provide such powers and the UAE courts themselves rarely grant such relief. 

The Arbitration Proceedings

Date of Commencement

The arbitral proceedings are deemed to have commenced from the date following the formation of the arbitral tribunal, unless otherwise agreed by the parties (Article 27.1 of the UAE Arbitration Law). 

Seat and Venue of the Arbitration

The UAE Arbitration Law states that the parties may agree on the seat of arbitration. In the absence of the parties’ agreement, the arbitral tribunal will determine the seat of arbitration, taking into consideration the circumstances of the arbitration case and the convenience of the seat to the parties. Unless otherwise agreed by the parties, the arbitral tribunal may hold the arbitration hearings (a) at any venue it deems appropriate (and notify the parties in advance), or (b) through modern means of communication and technology (e.g., video conferencing) (Article 28 of the UAE Arbitration Law).

Language of the Arbitration

The UAE Arbitration Law provides that, unless otherwise agreed by the parties, the default language of the arbitral proceedings is Arabic (Article 29.1 of the UAE Arbitration Law). Where the parties desire to use a language other than Arabic, they must expressly (i.e., in the arbitration clause) or impliedly (i.e., applicable institutional rules chosen by the parties) agree to the desired language of the arbitration. The arbitral tribunal may, subject to the requirements in Federal Law No. 6 of 2012 Regulating the Translation Profession, order that all or part of the documentary evidence submitted by the parties be accompanied with a translation into the language of the arbitration (Article 29.3 of the UAE Arbitration Law).

Confidentiality  

The UAE Arbitration Law provides that arbitration hearings and arbitral awards are confidential, unless otherwise expressly agreed by the parties (Articles 33 and 48 of the UAE Arbitration Law). The introduction of these provisions are considered a step forward for onshore UAE arbitrations, since the CPC did not previously provide for the confidentiality of the arbitration proceedings. However, it is important to note that the UAE Arbitration Law does not provide for the confidentiality of the pleadings, documents, evidence or submissions (and they are not confidential by default). The UAE Arbitration Law also permits the disclosure of the arbitration award, if it was addressed or included in the judicial order of the Competent Court. 

Third Party Joinder

An arbitral tribunal may join a third party to the arbitral proceedings, following the request of either party or the third party him/herself, provided that the third party is a party to the underlying arbitration agreement (Article 22 of the UAE Arbitration Law). Third party joinder is permitted provided that all the parties, along with the third party, have a fair opportunity to present their case (in line with Article 26 of the UAE Arbitration Law). This is a welcome development to the previous provisions of the CPC, which did not expressly permit third-party joinder.

Hearings and Submissions

The UAE Arbitration Law provides new stringent time limits for filing submissions. The UAE Arbitration Law provides that, unless otherwise agreed by the parties or directed by the arbitral tribunal, the claimant must submit its statement of claim within 14 days from the date of formation of the arbitral tribunal (Article 30.1 of the UAE Arbitration Law). Subsequently, unless otherwise agreed by the parties or the arbitral tribunal, the respondent must submit its statement of defense (including the counterclaim, if any) within 14 days from the day following receipt of the statement of claim (Article 30.2 of the UAE Arbitration Law). However, the UAE Arbitration Law permits the parties to contract out of these time limits. 

The arbitral tribunal may decide to terminate the arbitration proceedings where the claimant fails to submit its statement of claim without a justified and valid reason (Article 32.1 of the UAE Arbitration Law). On the other hand, the arbitral tribunal is obliged to continue with the arbitral proceedings where the respondent fails to submit its statement of defense, without considering such failure as an admission of the respondent’s liability (Article 32.2 of the UAE Arbitration Law).The UAE Arbitration Law provides that, where one of the parties fail to appear at a hearing or submit the required documents without a valid or justifiable reason, the arbitral tribunal may continue with the arbitral proceedings, and issue an award based on the available evidence (Article 32.3 of the UAE Arbitration Law). 

The arbitral tribunal may decide whether to hold oral hearings or document-only proceedings (Article 33.1 of the UAE Arbitration Law). As stated earlier, the arbitral tribunal may also hold the hearings through modern means of communications. Where a party engages counsel to represent it before the arbitral tribunal, the arbitral tribunal may require evidence of the counsel’s authority to represent its client (i.e. a valid power of attorney) (Article 33.5 of the UAE Arbitration Law). The UAE Arbitration Law makes it clear that parties may engage local and/or foreign counsel to represent them in UAE arbitration proceedings. 

Witnesses and Experts 

The arbitral tribunal is empowered to appoint one or more experts to submit a report, unless otherwise agreed by the parties (Article 34.1 of the UAE Arbitration Law). The tribunal-appointed expert must be impartial and independent (Article 34.3 of the UAE Arbitration Law). The parties may also engage witnesses or experts to provide their written or oral testimony (Article 35 of the UAE Arbitration Law). 

The arbitral tribunal is empowered to determine the rules of evidence that will govern the admissibility, relevance or weight of the evidence submitted. The arbitral tribunal may determine the time, manner and form in which the parties will exchange evidence. The arbitral tribunal may also order the translation of the evidence (Article 33.8 of the UAE Arbitration Law). In addition, the arbitral tribunal must hear the witness and expert testimonies in accordance with the applicable laws of the UAE, unless otherwise agreed by the parties (Article 33.7 of the UAE Arbitration Law). UAE Federal Law No. 10 of 1992 on the Issuance of the Evidence Act for Civil and Commercial Transactions requires witnesses to testify under oath. Hence, unless the parties expressly agree otherwise, it is prudent that the parties comply with the requirement of witnesses and experts testifying under oath.

Evidence – Court Assistance

The UAE Arbitration Law permits the arbitral tribunal to request assistance from the Competent Court to obtain evidence, either following a request of a party or on its own motion. The Competent Court may order a party to provide such evidence or order a witness to attend before the arbitral tribunal to deliver an oral testimony, submit evidence or any supporting documents (Article 36.1 of the UAE Arbitration Law).  The Chief Justice of the Competent Court may decide, amongst other things, to (a) order a third party to produce documents in its possession that are essential to the dispute, and (b) sanction a witness who fails to appear or testify. 

Arbitral Award

Form and Content of the Award

The arbitral award must be in writing and signed by the arbitrators (Articles 41.1 and 41.3 of the UAE Arbitration Law). Dissenting opinions must be included in the award and are deemed an integral part of the award (Article 41.2 of the UAE Arbitration Law). Where one of the arbitrators refuses to sign the award, he/she must include their reasons for doing so in the award (Article 41.3 of the UAE Arbitration Law). The arbitral tribunal must state the reasons upon which the award is based on, unless the parties agree otherwise or the applicable law does not require the award to be supported by reasons (Article 41.4 of the UAE Arbitration Law). The arbitral tribunal must include the parties’ information (i.e. names and addresses, the arbitrators’ information (i.e. names, nationalities and addresses), a copy of the arbitration agreement, a summary of the reliefs sought by the parties, a summary of the submissions and documents, the dispositive part of the award, and the date and place the award was issued (Article 41.5 of the UAE Arbitration Law). 

The arbitral award is deemed to have been rendered at the seat of arbitration even if the arbitral tribunal signs the award outside the seat of arbitration. The arbitral tribunal may choose to either physically sign the award or through electronic means (e.g., e-signature) (Article 41.6 of the UAE Arbitration Law). Unless otherwise agreed by the parties, the date of the award is deemed to be the date on which the award is signed by the arbitral tribunal (i.e., the date of the sole arbitrator’s signature, or the date of the last signature in the event of a three-person tribunal) (Article 41.7 of the UAE Arbitration Law). This is a notable development. In the past, the CPC provided that the arbitrators must sign the award in the seat of arbitration, which was highly inefficient in the case of international arbitration.

Time Limit to Issue and Deliver the Award

The UAE Arbitration Law provides that the arbitral tribunal must render the final award within the period agreed upon by the parties. In absence of such agreement, the arbitral tribunal must issue the award within 6 months from the date of the first hearing. The arbitral tribunal may decide to extend that period for an additional period of 6 months, unless the parties agree on a longer period (Article 42.1 of the UAE Arbitration Law). The UAE Arbitration Law further provides that one of the parties or the arbitral tribunal may request the Competent Court to order an additional period for rendering the award or terminate the proceedings, if necessary (Article 42.2 of the UAE Arbitration Law). 

The arbitral tribunal must deliver the award to the parties within 15 days from the date of the award (Article 44 of the UAE Arbitration Law). However, in the case where the parties fail to settle the arbitration expenses, the arbitral tribunal may refuse to deliver the award pending payment (Article 47.1 of the UAE Arbitration Law). Where the arbitral tribunal refuses to deliver the award, either party may seek assistance from the Competent Court to request the arbitral tribunal to deliver the award, provided that the party provides proof of payment of all the fees and expenses requested by the arbitral tribunal or determined by the Competent Court (Article 47.2 of the UAE Arbitration Law).  

Interpretation of the Award

The UAE Arbitration Law provides that the parties may request the arbitral tribunal to interpret the arbitral award within 30 days of receipt of the award, unless the parties agreed on different procedures or time limits (Article 49.1 of the UAE Arbitration Law). The arbitral tribunal may interpret the arbitral award by issuing an explanatory award within 30 days following the date of the request to do so. The arbitral tribunal may extend this period by 15 days, if it deems it necessary (Article 49.2 of the UAE Arbitration Law). The explanatory award is deemed an integral part of the arbitral award (Article 49.3 of the UAE Arbitration Law).

Correction of the Award

The Arbitral Tribunal may correct any material errors in the arbitral award, on its own motion or at the request of a party. The party may request the arbitral tribunal to correct the award 30 days following the receipt of the award, unless the otherwise agreed by the parties. The arbitral tribunal will correct the award within 30 days following the issuance of the award or the submission of the request for correction, as the case may be.  The arbitral tribunal may, if it deems necessary, extend such period by 15 days (Article 50.1 of the Arbitration Law). The correction of the award is deemed an integral part of the arbitral award (Article 50.3 of the Arbitration Law).

Supplementary Award

A party may request an arbitral tribunal, within 30 days following the date of receipt of the arbitral award, to render an additional award in relation to any claims presented during the proceedings but omitted from the arbitral award (Article 51.1 of the UAE Arbitration Law). The arbitral tribunal must issue the supplementary award within 60 days from the date of the party’s request, and may extend such period by 30 days (Article 51.2 of the UAE Arbitration Law). The supplementary award is deemed an integral part of the arbitral award (Article 51.3 of the UAE Arbitration Law). 

Stay on the Proceedings

The UAE courts are required to dismiss any action that falls within the scope of an arbitration agreement. The initiation of court proceedings will not preclude the commencement or continuation of the arbitration proceedings (Article 8 of the UAE Arbitration Law). In addition, the UAE Arbitration Law provides that a challenge to an arbitrator does not stay the arbitral proceedings. The arbitral tribunal, including the challenged arbitrator, may proceed with the arbitral proceedings and render the arbitral award pending the decision on the challenge (Article 15.3 of the UAE Arbitration Law). 

Furthermore, a challenge before the UAE courts to the arbitral tribunal’s jurisdiction does not necessarily stay the arbitral proceedings. The arbitral tribunal may decide not to stay the arbitration proceedings pending the judicial decision on its jurisdiction (Article 19.2 of the UAE Arbitration Law). The UAE Arbitration Law further provides that the arbitral tribunal may decide to continue reviewing the subject matter of the dispute, where there are (a) issues that fall outside the arbitral tribunal’s scope of jurisdiction, (b) documents submitted to the arbitral tribunal that are challenged for forgery, or (c) criminal proceedings in respect of that document or any other criminal act (Article 43 of the UAE Arbitral Tribunal). Where the arbitral tribunal decides to put a stay on the arbitration pending a final judgment in relation to the above, this entails suspension of the time limit set for the issuance of the award. 

Furthermore, an action to set aside an arbitral award does not stay the award’s enforcement (Article 56.1 of the UAE Arbitration Law). However, it is important to note that the Competent Court may issue an order to stay the enforcement of the award, upon a party’s request, within 15 days of the date of the first court hearing relating to such request (Article 56.2 of the UAE Arbitration Law).

The UAE Arbitration Law provides a welcome development to instil efficiency in arbitration proceedings and put an end to guerrilla tactics. In the past, the arbitral tribunal were required to suspend proceedings under certain circumstances.  However, the UAE Arbitration Law now allows the arbitral tribunal, in certain circumstances, to decide not to put a stay on the proceedings and to continue with the arbitration. 

Annulment of the Award

The UAE Arbitration Law provides that a party may request the Competent Court to annul an award for the following reasons: (1) the arbitration agreement is null, invalid or non-existent, (2) a party lacked capacity pursuant to the law governing his capacity at the time of entering into the arbitral agreement, (3) a party failed to submit its defense due to improper notification of the arbitration procedures or the arbitral tribunal’s appointment, due to a breach from the arbitral tribunal, or due to any other reason outside its control, (4) the governing law of the dispute was not applied in the award, (5) the constitution of the arbitral tribunal is contrary to the Arbitration Law or the parties’ agreement, (6) the arbitration procedures are invalid and its invalidity affects the award, or (7) the arbitral tribunal ruled on matters that are not within the scope of the arbitration agreement or beyond the scope of the agreement (any portion of the award separable from the rest may be held valid) (Article 53.1 of the UAE Arbitration Law). In addition, the Competent Court has the authority to order the invalidity of the award on its own motion, where: (1) the award relates to a matter that is not arbitrable, or (2) the award is contrary to the public policy of the UAE (Article 53.2 of the UAE Arbitration Law).  

The UAE Arbitration Law provides that the decision of the Competent Court (in relation to the annulment) is final and not be subject to appeal (Article 54.1 of the UAE Arbitration Law). The arbitral award (along with any related explanatory award) will be canceled where the Competent Court issues its decision to annul the award (Article 54.3 of the UAE Arbitration Law). However, the arbitration agreement will remain valid after the annulment of the arbitral award, unless the annulment was based on the nullity or non-enforceability of the arbitration agreement itself (Article 54.4 of the UAE Arbitration Law). Unlike the previous provisions of the CPC, the UAE Arbitration Law now provides a 30 day limit from the date of receiving notice of the award for a party to commence annulment proceedings. This is viewed as a significant development contributing to the legal security of the award. 

Enforcement of the Arbitral Award

The UAE Arbitration Law provides a fast-track and efficient procedure to enforce both domestic and international arbitral awards. Arbitral awards rendered in accordance with the UAE Arbitration Law are res judicata and considered binding to all the parties. The awards have the same self-executing force as if they were a court judgment (Article 52 of the UAE Arbitration Law). However, the Competent Court will have to ratify the arbitral award in order to enforce the arbitral awards. The UAE Arbitration Law provides that parties may now commence proceedings directly before the federal or local Court of Appeal, in contrast to the former position of the CPC where parties commenced proceedings before the Court of First Instance. The party may directly submit an application to the Chief Justice of the Court of Appeal, without the need of filing a full case before the court, as before. The party must enclose (a) the original award, (b) Arabic translation of the award, if it is made in a foreign language, (c) a copy of the arbitration agreement, and (d) a copy of the request to the Competent Court (Article 55.1 of the UAE Arbitration Law). Where the Chief Justice of the Court of Appeal finds that the arbitral award is in order, he will confirm and enforce the arbitral award within 60 days from the date of request (Article 55.2 of the UAE Arbitration Law). A party may file a grievance with the court against the ratification order (or rejection thereof) of the Court of Appeal within 30 days following the date of notification of the court’s order (Article 57 of the UAE Arbitration Law). 

The UAE Arbitration Law does not proscribe any provisions in relation to the enforcement of foreign arbitral awards. It is believed that the provisions in the CPC, namely Articles 235 to 238 (which has not been repealed by the enactment of the UAE Arbitration Law), continue to govern the enforcement of the foreign arbitral awards in the absence of a treaty or convention entered into by the UAE, such as the New York Convention.  
 
Author(s): John Gaffney, Al Tamimi & Company; Malak Nasreddine, Al Tamimi & Company
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: United Arab Emirates; United Arab Emirates
 
United Arab Emirates Full text
 
 
 
 
 
Upcoming Events (2)
 
 
Vienna: 8th Arb|Aut Forum (18 October 2018)
 
The eight Arb|Aut Forum, organised jointly by Arb|Aut and the University of Vienna, will be held on Thursday October 18 in Vienna, Austria. This event allows Arb|Aut and YAAP members to discuss current topics related to Arbitration in Austria with renowned practitioners and scholars in German language.
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
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Vienna: 2nd Annual GAR Live (19 October 2018)
 
The second annual GAR Live conference will be held at the premises of the premises of the Austrian Federal Economic Chamber (SkyLounge) on Friday October 19 in Vienna, Austria.
 
Author(s): Günther J. Horvath, Freshfields Bruckhaus Deringer LLP
 
Source: A contribution by the ITA Board of ReportersDate: 4 Oct 2018
 
Reporter for: Austria
 
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