Arbitration in Dubai – the establishment of DIFC-LCIA

Extract of a Seminar on International Commercial Arbitration Delivered by Hefin Rees on 13th May 2010.
  1. Since oil was discovered in Dubai in 1966, trade, banking, finance, insurance and construction activities have flourished.
  2. History has always shown that whenever there is human endeavour, there is conflict; and it is necessary to establish a procedure for dispute resolution.
  3. In 2003 the Dubai International Arbitration Centre (“DIAC“) was conceived. DIAC has grown over the years, from a case load of 34 cases in 2004 to now over 100 cases registered in 2009.
  4. In February 2008, the Dubai International Financial Centre (“DIFC“) and the LCIA announced the launch of the DIFC/LCIA Arbitration Centre in Dubai. This joint venture allows DIFC access to LCIA’s international network of arbitrators. The DIFC-LCIA Rules are based on the current LCIA Rules, with minor amendments to account for local requirements.
  5. The DIFC-LCIA Arbitration Centre is open to any parties who agree to use it to settle their commercial disputes as the Arbitration Law does not require disputes to have any connection with the DIFC – whether through the parties, the performance of the contract or the place of execution of the contract.
  6. In September 2008 DIFC unveiled its new Arbitration Law, which provides the legal framework of the new DIFC-LCIA Arbitration Centre. The DIFC has its own courts. The DIFC courts have been established to deal exclusively with all cases and claims arising out of the DIFC and its operations. The legal framework is based on English common law principles, and the language of the Court is English.
  7. The UAE has previously had a reputation of being a difficult place in which to enforce arbitral awards. There have been instances where highly technical points have been accepted as a valid reason not to enforce an award (such as when an award was thrown out because the documents were not signed on every page, but signed at the end and initially on every page).
  8. However, past problems on enforcement are likely to be less of a problem in future in light of the UAE’s ratification of the NYC as of November 2006.
  9. In addition, there is a procedure for DIFC Court judgments to be enforced through the execution department of the Dubai Court. The decisions of the DIFC Court will be presented (with an Arabic translation) to the execution judge who will, without interference, convert the DIFC judgment into a judgement of the Dubai Court, which is enforceable not only in Dubai, but throughout the rest of the UAE and in the Gulf Cooperation Council under the 1983 Riyadh Convention.