The implementation of Federal Law Number 6 of 2018, also called Federal Arbitration Law, has introduced a significant number of procedural developments related to both the conduct of arbitration proceedings and the enforcement of arbitration awards before the Courts of UAE. The Federal Arbitration Law has addressed the common problems that the old arbitration regime has under the UAE Civil Procedures Code. Due to the enforcement of this legislation, UAE is on its way to becoming the leading arbitration hub because businesses that are operating have access to a flexible and efficient arbitration process.
There are two free zones in the UAE with their own arbitration procedures: the Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM). The law is established with the intention of preserving the freedom of the parties to be able to choose these arbitration regimes if the parties agree to it. The scope of the Federal Arbitration Law is broad and will apply to existing and future arbitration proceedings unless the parties agree to opt-out of it. The legislation has specifically differentiated between domestic and international arbitration procedures where it mentions that it would qualify as an international arbitration if:
The parties involved are located in at least two countries at the time of conclusion of the agreement; or
This particular distinction will have an impact on the procedure for enforcement of arbitration awards that arises from domestic arbitrations, as well as those awards that are issued from international arbitration.
Article 55 of the arbitration law has described the procedure for enforcing an arbitral award that falls within the scope of the law. According to 55, the process for ratifying and implementing a foreign judgment must be filed in the Court of Appeal along with these documents:
One of the main progress that is introduced under the law is the expedited procedure for the enforcement of arbitration awards. The federal Arbitration law has allowed any enforcement application of an arbitration award, and it can be taken directly before the Court of Appeal. The Courts can issue the award’s enforcement order within 60 days from the date the application was filed. However, this provision does not come with any exceptions as Article 53 provides the grounds for nullification that any of the parties can satisfy. The new procedure also brings forth a 30-day time limit where a party can challenge the award’s validity before the Court of Appeal. A significant controversy concerning the promulgation of the new arbitration law is whether the arbitral procedure’s scope regarding the enforcement of arbitration awards extends to foreign arbitration awards in the UAE. It was affirmed that foreign arbitration awards fall within the scope of the Federal Arbitration Law, and the application should be filed directly to the Court of Appeal.
Before the Federal Arbitration Law was established, the enforcement of foreign arbitration awards was made in line with the procedures set out in the Civil Procedures Code. The process outlined in the Code was to file an application of recognition and enforcement for a foreign award through the traditional channels of filing a claim in Court before a file can be claimed in the UAE Courts. This meant that with the help of arbitration lawyers, an enforcement application needed to be filed before the UAE Court of First Instance. Therefore, any decision that was rendered will be subject to two levels of appeal. Before the Federal Arbitration Law was established, the total timeframe for enforcing a foreign arbitral award was between 1 year to 1.5 years. It is important to note that applications regarding recognition and enforcement of foreign arbitration awards must be made in line with the recently amended Civil Procedure Code. In order to enforce foreign arbitral awards, the execution judge must prove that the arbitral award was made is in accordance with UAE law and is enforceable in the country where it is issued. It must be noted that the new procedure does not cut the UAE’s international obligations when enforcing a foreign judgment or award. The new laws have expressly stipulated that they shall not detract from the provisions laid out by the international conventions on such matters, such as the New York Convention on recognizing foreign awards. Before granting an enforcement application, the Execution Judge must be satisfied on five matters: