Mediation Regulations in UAE

Mediation saves both time and effort as with other alternative dispute resolution (ADR) and helps to preserve good commercial ties until the conflict has been settled. The mediator assists the negotiations of parties and helps them to identify the conflicts in the dispute and to discuss solutions. The mediator helps parties to find a solution that caters to the needs and interests of the parties. Despite the parties who could be at a distance from each other geographically, mediation is fast, confidential, and cost-effective. It offers an outstanding opportunity for innovative solutions and preserving business relations, giving parties control over the outcome. Mediation is used to resolve a range of commercial issues in the fields of transport, aviation, finance, construction, contractual conflict and tort, insurance, motorsport, land and property, personal injury, professional negligence, yachting, and motorsports. In the UAE, mediation is seen as more effective in resolving disputes compared to regular court hearings. The country has made tremendous progress in recent years by establishing itself as a center of international Alternative Dispute Resolution (ADR) tools, such as DIFC and ADGM, which are reputable international free zone centers. With the rise of international arbitration practices in the UAE, mediation has taken a turn in the ADR field in local markets. It is still a widely used tool for resolving familiar and business disputes, but it has many forms and comes under a lot of names within the culture and even the legislative laws in the UAE. Sulh or amicable settlements have a long tradition in pre-Islamic Arabia and Islamic cultures. In any kind of conflict settlement, Sulh is the desired outcome and procedure of dispute resolution.

Mediation in UAE

UAE does not have any legislation that covers all necessary areas of commercial, family, or labor mediation. Mediation can generally be split into two categories: compulsory mediation and voluntary mediation. Compulsory or mandatory mediation is an amicable method of settlement of disputes, through which parties must go through the mediation process compulsorily under the applicable law in order to go to a court. As the name suggests, voluntary mediation is an amicable method of settlement of disputes whereby parties mutually choose to go through mediation rather than be compelled to do so by any law. While there is no express reference to mediation in the UAE Civil Procedures Law, Article 101 requires parties to consent to a period up to a period of six months to attempt settlement. There are also a number of measures within the UAE Court system that encourage reconciliation between the disputing parties. For example, in the case of civil, commercial, and labor disputes, the Federal Courts of the UAE offer various dispute reconciliation committees that allow the parties to take advantage of pre-action mediation. If a dispute remains unresolved, it is essential for the litigating party to obtain a declaration of no objection from the required committee before issuing a claim. Additionally, Federal Law Number 17 of 2016 known as the Mediation Centre Law allows for the establishment of mediation and conciliation centers. The provisions of Article 2 of the Mediation Center Law enable the minister or head of the local judicial authority to establish, under the Court’s jurisdiction, one or more mediation, and conciliation centers. Under Article 3 of the Law concerning mediation centers, the parties may refer the following kinds of disputes to such established centers:

1. A civil or commercial dispute shall not exceed AED 500,000.
2. Un-known or non-estimated value of the civil or commercial dispute.

Article 4 of the Mediation Centre Law states that a mediation and conciliation center formed under this law cannot be referred to the disputes set out below:

1. Interim and urgent orders and lawsuits.
2. Law proceedings by which a government is a party.
3. Labor proceedings.
4. Lawsuits on personal status.
5. Any other proceedings before another center, committee, or entity of equivalent competence to be settled.

The Mediation Centre Law also sets out the duties and responsibilities of conciliators, work procedures, termination of mediation and conciliation proceedings, etc.

Mediation in Dubai

Law Number 16 of 2009 commonly known as Amicable Centre Law established the Center for the Amicable Settlement of Disputes in Dubai with values up to AED 100,000 excluding labor, personal affairs, and bank cases, requiring review by mediator’s settlement by negotiation that is encouraged before the proceedings begin. Article 12 of the Amicable Centre Law states that once the parties settle, then their settlement is recorded as approved by the competent judge in a reconciliation agreement and is subject to the force of an executive bond. Further, the Center has authority in the following matters according to Article 1 of the Dubai Administration Decision Number 1 of 2017;

1. Division of common ownership.
2. If the value is no more than AED 100,000 for the debt principal in a dispute.
3. On request of the disputing party or on registration of both parties.

Mediation in Dubai International Financial Center (DIFC)

The DIFC Courts, as contained in Part 27 of the Rules of the DIFC Court (“RDC”), have their own ADR rules. The Court always encourages parties to consider the use of justice through reconciliation (though not limited to, such as mediation, conciliation), as an alternative means of resolving disputes while underlining its primary role as a forum for the decision-making of civil and commercial cases. The DIFC Court will not oblige parties to participate in justice by reconciliation as a prerequisite to litigation. However, if necessary, the Court will allow parties in the Case Management Conference to consider justice by reconciliation. It may postpone the case for a specified period to allow and permit the parties to take advantage of justice by reconciliation. Although there is no specific legislation for enforcement settlement agreements arising out of private mediation in the UAE or either of its emirates, the above article highlights the emphasis given on this Arab nation’s amicable dispute resolution process. It is recommended that parties use expert arbitration lawyers and mediation counsels to ensure that they understand the process for effective negotiation.