February 26, 2024

Tullio Corradini

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Decree 34 and its impact on arbitrations in Dubai

Decree 34 and its impact on arbitrations in Dubai

On 14 September 2021, in his potential as the Ruler of Dubai, Vice President and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum, issued Decree No. 34 of 2021 concerning the Dubai Global Arbitration Centre (“DIAC”) (“Decree 34”). 

In summary, Decree 34 abolished the Dubai Worldwide Financial Centre Arbitration Institute (“DAI”) together with the Emirates Maritime Arbitration Centre (“EMAC”) (collectively, the “Cancelled Arbitration Centres”) and transferred the Cancelled Arbitration Centres to the Dubai Global Arbitration Centre (“DIAC”). 

The dissolution of the DAI and EMAC is productive at the publication date of Decree 34 nonetheless, DIAC has a six-month grace time period in which to coordinate and regulate itself in accordance with Decree 34. DIAC will manage its headquarters in ‘onshore’ Dubai, but will also open up a branch in the Dubai International Financial Centre (“DIFC”).

By way of history, EMAC was proven in 2016 to provide a specialised maritime arbitration and mediation centre in the Center East. Conversely, the DAI was recognized below the umbrella of the DIFC Dispute Resolution Authority. DAI entered into a joint venture with the London International Courtroom of Arbitration (“LCIA”) which fashioned the DIFC-LCIA Arbitration Centre in 2008. 

It seems, although not obvious, that Decree 34 has abolished the DIFC-LCIA Arbitration Centre. On 20 September, the LCIA verified that it has entered into consultation with the Federal government of Dubai to make sure the orderly management of current circumstances currently being performed (Simply click in this article for LCIA assertion). 

The reason of Decree 34 is to consolidate the position of Dubai as a trustworthy international hub for resolving disputes by way of alternative dispute resolution (“ADR”). This is accomplished, in component, by centralising arbitration and mediation proceedings beneath the purview of DIAC. With the passage of Decree 34, DIAC is now completely charged with all facets of ADR in Dubai. 

Pointless to say, Decree 34 is a monumental instant in Dubai arbitration and there is very likely to be a sizeable total of confusion and queries to occur in the coming months. In the quick time period, the question is what happens to ongoing cases prior to the Cancelled Arbitration Centres. In the lengthier term, what need to parties do with respect to agreements that have included one of the Cancelled Arbitration Centres as their discussion board for dispute resolution?

An exciting aspect of Decree 34 is the improve to the default seat of arbitrations. Presently, the DIAC Arbitration Regulations condition that, where parties to an arbitration agreement do not state the seat of the arbitration, the default seat would be ‘Dubai’ – which is to mean that the Dubai Courts would have supervisory authority around the arbitration. Decree 34 now states that the default seat of arbitration shall be the DIFC – which is to necessarily mean that the DIFC Courts would have supervisory authority around the arbitration. Decree 34 does specifically state the DIAC Arbitration Policies “shall keep on to be applied to the extent that they do not conflict with the provisions of [Decree 34]”. 

There is a good offer of uncertainty with regard to ongoing and/or contemplated scenarios just before the Cancelled Arbitration Centres. In this regard, we are in consistent interaction with those people centres to fully grasp what impact Decree 34 will have on ongoing situations. 

Furthermore, an vital thought is what outcome will Decree 34 have on by now executed agreements which have an arbitration arrangement right before a person of the Cancelled Arbitration Centres. Each and every arrangement and condition is different and it is vital for companies to re-evaluate their present agreements to be certain the validity and enforceability of their arbitration agreements.

Please really feel free of charge to get hold of Raymond Kisswany ([email protected]) if you call for advice on the affect of this sizeable change to ongoing arbitrations and/or irrespective of whether arbitration agreements in present contracts ought to be amended.