On 18th of September 2021, the Vice President and the Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum in his capacity as Ruler of the Emirate of Dubai, issued decree number 34 of 2021 regarding the Dubai International Arbitration Centre, a one-stop-shop for arbitration disputes through a united arbitration, which stipulates: Cancellation of the “Emirates Maritime Arbitration Center” (“EMAC”) and the “Dubai International Financial Center Arbitration Institution” together “the London Court of International Arbitration” (“DIFC-LCIA”) and merging their competencies and powers in the “Dubai International Arbitration Center” (“DIAC”) established by Decree Number 10 of 2004, which is an autonomous, non-profit center that enjoys legal, financial and administrative independence of the Dubai Chamber, with headquarters in both Dubai and the DIFC.
Similar to the courts within the ICC and LCIA, the new DIAC will also have a court of arbitration to supervise arbitration proceedings and scrutinize draft awards.
The decree supports the community and its business activities. It specifies the transfer of ownership of the real estate, movables, assets, and funds belonging to the canceled arbitration centers, as well as transfer of the employees, financial provisions, and lists of arbitrators, and experts registered in the canceled arbitration centers, as well as the membership of persons, its affiliates. Provided that their membership and registration continue with the same conditions, measures, and fees agreed by those centers until the expiry of the period of registration or membership, and that the circumstances, procedures, and fees approved by the Board of Directors of the DIAC shall be applied to them upon renewal, provided that it replaces the canceled arbitration centers in all what are the rights and obligations of these centers.
Following the decree, all agreements concluded on the date of enforcement of this decree by resorting to arbitration in the canceled arbitration centers are valid and enforceable. The integrity of existing arbitration proceedings is maintained through this provision. It is therefore evident that the decree is not to demolish the effect of existing DIFC rules rather its aim is to integrate the rules into a unified set of rules provided through one arbitration center in Dubai.
The decree also stipulates that the arbitral tribunals and committees formed on the date of enforcement of this decree at the abolished arbitration centers and the DIAC shall continue to consider and decide all arbitration cases before them without interruption and in accordance with the rules and procedures adopted by them in this regard unless the arbitration parties agree otherwise.
Further, the decree also provides that DIAC shall be accountable for civil liability arising from inadvertent mistakes committed by arbitral tribunals. Therefore, the potential changes raised by the parties against the arbitral tribunals will be dealt with by the new DIAC.
Decree number 10 of 2004 is replaced by Decree number 34 of 2021 establishing the DIFC, and any provision that contradicts the provision of this decree is repealed to that extent. Both the “Dubai Courts” and the “Dubai International Financial Center Courts” shall continue to hear the claims, requests, and appeals related to any judgment or procedure of the arbitration procedures issued by the arbitral tribunals at the DIAC and the canceled arbitration centers.
However, in new contracts reference to the DIFC-LCIA should not be included by the businesses rather the reference should be to DIAC or any other arbitration institution of the parties’ choice.
The Statute of the DIAC defines the objectives of the center, the competencies, and organizational structure, which comprises of three organizational levels: the Board of Directors, an arbitration court formed according to the new system, and an administrative body.
The goals that the DIAC will work to achieve are mentioned in the statute. Its most important goal is strengthening Dubai’s position as a global center, reliable for dispute resolution through alternate means other than the judiciary. Consolidation of the center’s position as one of the finest options for resolving disputes by following the best international practices effectively and efficiently, in a manner that serves the financial and business community in the Emirate.
The tasks and competencies of the DIAC declared in its statute include:
In addition to defining the board’s terms of reference and the mechanism for holding its meetings, the statute of the DIAC also outlines the rules for creating the center’s board of directors, and the period of membership.
The statute also included the creation of an arbitration court comprising of a president along with his deputy, and several individual members with expertise in arbitration and competencies recognized locally and internationally, their figure does not exceed thirteen members, together with the president and his deputy, and they are appointed by a decision of the center’s board of directors. The term of membership in the Court shall be four years, non-extendable, while the system clarified the jurisdictions of the Arbitration Court, the mechanism for holding its meetings, and the powers of its formation of temporary and permanent subordinate subcommittees.
The competencies of the administrative body of the DIAC have been mentioned in its statute, including the powers and functions of the executive director, as well as the functions of the administrative body, implemented under the supervision of the executive director.
In addition to a set of final provisions, the system also detailed the financial resources of the center and its financial year, including the basis for joining the lists conciliation mediators, arbitrators, and experts, and the requirements for membership in the center.