Staying ahead of the curve: Key updates to the UAE Arbitration Law
The UAE has announced several key amendments to its arbitration law, Federal Law No. 6 of 2018 (as amended, the "Amended Law"). The amendments, which are contained in Federal Law No. 15 of 2023, primarily codify recent developments in UAE case law and aim to further solidify the UAE as a global hub for international arbitration.
We summarise the key changes below, all of which are effective as of 16 September 2023.
Article 10 – The requirements to be met by the arbitrator
Arbitrators are expressly prohibited from having a direct relationship with any of the parties which could prejudice their impartiality and independence. This amendment follows a recent decision of the Abu Dhabi Court of Cassation, where the Court set aside an arbitral award for failure of the arbitrator to disclose a conflict of interest.
Article 10 also provides an exception to the general prohibition on arbitrators being members of supervisory and controlling bodies (such as board of directors / trustees) of arbitral institutions. The exception only applies if specific criteria are met. Violations of the criteria can lead to the annulment of an award and gives rise to a right on the part of the parties to claim civil damages from both the arbitral institution and the arbitrator in question.
Article 23 – Determination of the applicable proceedings
This article reaffirms the Parties' ability to choose the procedures that the tribunal is required to follow when conducting an arbitration. Article 23 of the Amended Law also confirms that if the Parties do not agree to follow certain procedures, the tribunal has discretion to determine these procedures so long as they are not contrary to UAE law and consider the basic principles of justice and the international agreements to which the UAE is a party.
Article 28 – Place and Proceedings of arbitration
Whilst virtual hearings were already permitted, Article 28 of the Amended Law now allows parties to agree on the place of arbitration as either a physical or virtual place. Article 28 confirms that arbitral institutions should provide the necessary technology required to conduct arbitration proceedings by modern technological means.
Article 33 – Arbitration Hearings and Proceedings
The default position under Article 33 of the Amended Law is that arbitration hearings and proceedings more generally shall be confidential. The Dubai Court of Cassation recently held that arbitration is private, unless the parties agree otherwise. Prior to the Amended Law, only hearings and arbitral awards were confidential as a default rule.
Article 33 of the Amended Law also reaffirms a tribunal's discretion to determine the applicable rules of evidence unless these evidentiary rules conflict with the UAE's public policy.
The Amended Law has generally been perceived as a positive step forward for arbitration in the UAE. It is clearly intended to promote further efficiencies and flexibility in the arbitration process and to make the UAE more attractive as an arbitration friendly jurisdiction. That being said, it does remain to be seen how some of the amended provisions will be interpreted and applied in practice.
Should you require any assistance to navigate the Amended Law or would like to learn more, please contact the authors.