Important recent changes to the UAE Arbitration Law

In Brief:

1. On 15 September 2023, the UAE published an amendment to Federal Law No. (6) of 2018 on Arbitration which entered into force on 16 September 2016.
2. The amendment aims to clarify the independence of arbitrators and updates the rules of arbitration proceedings by clearly allowing remote hearings.
3. The amendment also aims to maintain the confidentiality of arbitration proceedings and allow the arbitrators to handle disputes based on documentary submissions only as well as clarify the applicable rules of evidence.

The United Arab Emirates (UAE) is recognized as a leading hub for international arbitration particularly in respect of the Middle East. To further enhance its arbitration framework, the UAE recently implemented amendments to its arbitration law of 2018. The amendments, which came into effect on 16 September 2023, aim to streamline and modernize the arbitration process, making the UAE an even more attractive destination for resolving international commercial disputes. In this article, we briefly explore the key changes in the UAE Arbitration Law and their potential impact on the arbitration landscape.

1. Qualifications of the arbitrator:

One of the notable additions to Article 10 is the addition of Article 10, which was added to the law in the current 2023 amendment in relation to the conditions that should be satisfied if the parties intend to appoint arbitrators from the members of the board of directors or board of trustees of the arbitration institution. Such appointment has to satisfy the following conditions:

1. That the regulations of the arbitration institution administrating the arbitration matter do not prohibit such appointment.
2. That the governance regulations of the arbitration institution dealing with the duties of the arbitrators contain provisions regarding the impartiality of the arbitrator and conflicts of interests. The said regulation shall include provisions on the appointment and removal of the arbitrator in case he breaches his obligations.
3. That the arbitration shall not be a sole arbitrator or president of the arbitration tribunal.
4. That the parties agree in writing to such appointment and their awareness of the arbitrator’s membership of the board of directors, board of trustees or any such supervisory or controlling body in the arbitration institution administering the arbitration matter.
5. That the arbitration institution has a system for safe reporting of any violation committed by the arbitrator.
6. That the number of matters being handled by the arbitrator does not exceed five (5) per year.
7. That the arbitrator undertakes in writing to avoid any conflict of interests and ensure his impartiality. Also the arbitrator shall undertake not to participate or review or vote or attend any meetings or influence the procedures of the arbitration matter as a result of his membership in the board of directors or board of trustees or any similar board in charge of supervising the conduct of the arbitration proceeding at the arbitrator tribunal during the period of his appointment.

Article 10 makes it clear that any violation of the above conditions shall result in nullification of the arbitral award. It further allows the parties to claim civil damages from the arbitration institution and the violating arbitrator in accordance with applicable UAE laws.

It is clear from the above new article that the new amendment aims to ensure the impartiality of the arbitrators despite allowing the parties to agree to appoint arbitrators from the board of directors or board of trustees of the arbitration tribunal, provided that the required conditions are satisfied and the arbitrators provide the required undertaking.

2. The applicable procedures:

Article 23 has been amended to exclude any reference to old article 10(2) which prevented an arbitrator from being a member of the board of directors or board of trustees of the arbitration institution.

3. Venue of the arbitration:

Article 28 has been updated to authorize the parties to agree to conduct arbitration hearings remotely or physically. In absence of such agreement, the arbitration tribunal can make a decision in this respect based on the nature of the dispute and convenience of the place of arbitration to the parties. In case of virtual hearings, the arbitration institution should be able to provide the technological means to be used in the hearing.

Article 28 further requires the arbitration tribunal to prepare the minutes of the hearings and to send the same to the parties following the hearings.

4. The arbitration hearing:

Article 33, among some other minor changes, emphasizes that the tribunal shall have the discretion to determine the rules of evidence if such rules were not designated by the parties or if the designated rules do not provide grounds to decide on the matter provided that such rules do not contradict public policy. 

Article 33 also authorizes the arbitration tribunal to determine whether a hearing is required or if the proceedings can be conducted based on documentary submissions only.

Conclusion:

The 2023 amendment of the UAE Arbitration Law represents another development in strengthening the UAE's arbitration framework. By reinforcing confidentiality of the arbitration proceeding, refining the requirements to appoint arbitrators and ensure their impartiality, clarifying the evidentiary rules and emphasizing the ability to conduct arbitration hearings remotely, the UAE has demonstrated its commitment to providing an efficient, cost effective and reliable platform for resolving disputes.

Should you have any question about this article, or require any assistance in relation to an arbitration matter or enforcement of arbitral awards in the UAE, please contact Walid Azzam and Mohamed Eissa of Hadef & Partners.