Procedural Summary On The Arbitration Rules 2016

The Dubai International Financial Centre (DIFC) was established in the year 2004 as a special economic zone and to act as a financial hub for the Middle East, Africa and South Asia (MEASA) markets. DIFC is an independent body that has its own judicial system, common law framework, global financial exchange, tax-friendly regime and vast business community. DIFC being an independent jurisdiction under the UAE’s Constitution has its own civil and commercial laws which are different from those of the wider UAE. It has its own courts headed by judges from leading common law jurisdictions including England, Singapore and Hong Kong. The DIFC-LCIA Arbitration Centre is an independent centre of international arbitration which follows the rules modelled on the London Court of International Arbitration. 

The Arbitration Rules 2016, was issued by the DIFC-LCIA Arbitration Centre to govern all arbitration proceedings of the centre along with the other sectors such as construction, media, financial and telecommunications. This article is intended to summarize the procedure of arbitration as per the Arbitration Rules, 2016 (The Arbitration Rules). 

 

The request for Arbitration by the claimant

The process to get into arbitration proceedings begins with a request for arbitration filed by the claimant.

The process of filing for such a request is as follows:

Any party intending to initiate arbitration under the DIFC-LCIA (Dubai International Financial Center- London Court of International Arbitration) shall submit a written request to the Registrar of the DIFC-LCIA Arbitration Centre and the party who initiates such requests shall be called the claimant. The request along with other required documents may be submitted to the registrar in electronic form such as e-mails or in a paper form or in both forms. 

In the case of a sole arbitrator, the request shall be submitted in two copies and where the parties have agreed to have three arbitrators, in four copies and such request shall also be accompanied by the following details:

• The full name and all the required contact details which include postal address, e-mail address, the telephone of the claimant, the claimant’s legal representatives (if any) and also of all the parties to the arbitration for the purpose of delivering all the documentation pertaining to the arbitration.
• The full terms of the arbitration agreement as appealed by the claimant in support of his claim, along with the copy of any contractual or other documentation containing the terms related to the claimant’s claim.
• Also, a brief statement summarizing the nature and the circumstances of the dispute, along with its estimated monetary amount, the transactions at issue and the claim filed against any other party to the arbitration (the respondent).
• A statement consisting of the procedural matters for the arbitration as to the arbitral seat, the language of the arbitration, the number of arbitrators and their qualifications and identities as agreed by the parties in writing.
• Full name, postal address, e-mail address, and telephone numbers of the claimant’s nominees of arbitrators, if any.
• Confirmation as to whether the registration fee has been paid or is being paid to the DIFC-LCIA Arbitration Centre and without the submission of the actual receipt of such payment the Registrar shall not consider the request for arbitration as delivered.
• Confirmation copies of the request along with all other accompanying documents have been received or being delivered to all other parties to the arbitration by one or more means to be specifically mentioned in such confirmation as to the satisfaction of the LCIA Court.

 

The date of the commencement of the arbitration shall be the date of receipt of the request issued by the Registrar Response from the respondent After a request for arbitration has been proceeded successfully, the next procedure is to receive the response from the respondent. As per Article 2(1) of the Arbitration Rules, the respondent must submit the statement of his response within twenty-eight (28) days of the commencement date or lesser or greater period, as determined by the LCIA Court upon application by any party or on its own initiative, to the statement of the claimant’s request that is delivered to him. His response must be submitted in written form as well and it shall accompany the following documents:

• The full details of the respondent or any legal representatives (if any) like that of the claimant for the purpose of receiving the delivery of all documents regarding the arbitration.
• A statement confirming or denying all or part of the claim proceeded against Him by the claimant in the request.
• A statement briefly summarizing the nature and the circumstances of the dispute and the estimated monetary value, the transactions and the defence advanced by the respondent and also, indicating any cross-claims which mighty be advanced by the respondent against any other party to an arbitration
• A response with regards to the procedural statement for the arbitration as mentioned in the request. He may include his own statements with regards to the arbitral seat, the language of the arbitration, the number of arbitrators and their qualifications and identities and all other procedural aspects as agreed in writing between them.
• If any nominees, their complete details shall be provided too.
• Finally, a confirmation of copies of the response delivered or being delivered to all other parties to the arbitration by one or more means of delivery to be mentioned in such confirmation to the satisfaction of the LCIA Court.

 

The response along with all other documents may be submitted either in an electronic form through an e-mail attachment or in paper form or in both forms. Where there is a sole arbitrator it shall be submitted in two copies and where there is more than one arbitrator, in four copies. The functions of the LCIA under the arbitration agreement shall be conducted by the President of the LCIA Court or any of its Vice-Presidents, Honorary Vice-Presidents or former Vice-presidents. All communications in the arbitration to the LCIA Court from any party, arbitrator or expert to the arbitral tribunal shall be addressed to the Registrar.  

 

Formation of the Arbitral Tribunal 

As per Article 5(5) the arbitral tribunal shall be appointed instantly on receiving the receipt by the Registrar of the response. If no response is received, then after thirty-five (35) days from the commencement date of the arbitration or as determined by the LCIA Court. 

 

Appointment of the arbitrators: 

Each arbitral candidate is required to submit to the Registrar, a brief written summary of his or her qualifications and professional positions (past and present). The candidate shall also agree in writing to the fee rates to confirm the schedule of costs. The candidate is required to sign a written declaration stating:

• Any circumstances that the candidate is currently aware of that are likely to give rise to the mind of any part as to any justifiable doubts regarding his impartiality or independence.
• If the candidate is ready, willing and is able to devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration.

On appointment, each arbitral candidate may assume a continuing duty as an arbitrator, until the conclusion of the arbitration. 

 

Arbitration Proceedings 

All arbitral proceedings shall be conducted by the arbitral tribunal formed by the LCIA Court. The seat of the arbitration may mutually be agreed upon by the parties either before or after the formation of the tribunal, where the tribunal is already formed then with its consent, in the event where the parties failed to agree on the seat of the arbitration than by default it shall be at the DIFC. The language of the arbitration will be the same language in which the arbitration agreement is written unless the parties have agreed in the agreement as to a different language to be used in the arbitration proceedings. 

Decide on the conduct of the arbitration proceedings. Article 14 lays down the provisions on the conduct of the arbitration proceeding After receiving the written notification of the formation of the arbitral tribunal from the Registrar, the parties are required to make contact with the arbitral tribunal, either in person, or through a telephone conference call, video conference or exchange of correspondence to discuss mutually on the conduct of the arbitration proceedings to be followed, but no later than twenty-one (21) days from the date of the notification received. The proposals for the conduct of the arbitration proceedings must be made in writing by the parties or they should be recorded in writing by the arbitral tribunal upon the request of the parties. It is pertinent to note that the conduct of arbitration should be made inconsistent with the arbitral tribunal’s general duties as per the arbitration agreement.

The arbitral tribunal’s general duties as per the arbitration agreement shall include:

1. A duty to act in a fair and impartial manner towards all the parties and ensure them of a reasonable opportunity of putting their case and also dealing with that of their opponents; and
2. A duty to follow procedures suitable to the circumstances of the arbitration and also to avoid unnecessary delay and expense to ensure a fair, efficient and expeditious means for the final resolution of the parties’ disputes.

 

Submission of the written statements As per Article 15(2), the claimant is required to deliver to the arbitral tribunal and all other parties, either a written election to recognize its request of arbitration as its statement of the case or the written statement of case putting forth the sufficient details pertaining to all the relevant facts, along with the legal submissions on which it relies and also, the relief claimed against all other parties with all other essential documents within twenty-eight (28) days from the date of receipt received from the registrar notifying in writing about the formation of the arbitral tribunal. 

Likewise, after receiving the receipt of the claimant’s statement of the case or the claimant’s election to consider the request of arbitration as the statement of the case, the respondent is required to submit to the arbitral tribunal and all other parties, either to consider his written election as the statement of defence and if applicable as cross-claim or submit the written statement of defense and if applicable cross-claim putting forth the sufficient details of all the relevant facts and the legal submissions on which it relies, along with the relief claimed against all other parties and all other essential documents within twenty-eight (28) days of receiving the receipt of the claimant’s statement of the case.

 

 Then the claimant, on receiving the receipt of the respondent's statement of defense or any cross-claims if applicable or the respondent’s election to treat the response as the statement of defense, is required to deliver to the arbitral tribunal and all other parties a written statement of reply and with respect to if any cross-claims, shall also include a statement of defense to cross-claim like in the same manner required for a statement of defense, within twenty-eight (28) days of receiving of such receipt. If the statement of reply includes a statement of defense to cross-claim, then within twenty-eight (28) days of its receipt, the respondent is required to address a written statement of reply to the defense to cross-claim to the arbitral tribunal and all other parties. The arbitral tribunal may further provide additional directions as to the written stage of the arbitration with regards to the witness statements, submissions and evidence. Unless otherwise ordered by the arbitral tribunal, no party may further submit any written statement following the last statement of the claimant’s statement of reply. Soon after the completion of the written stage of arbitration, the arbitral tribunal may proceed as per what is agreed in writing by the parties pursuant to its authority under the arbitration agreement. After the submissions of the written statements, oral hearings may take place. 

As per article 19, any party has the right to a hearing before the arbitral tribunal on the dispute at any appropriate stage of the arbitration as decided by the arbitral tribunal, unless the parties have agreed in writing to only documents-only arbitration. Reasonable notice is given in writing to the parties by the arbitral tribunal as to any hearings. Before any such hearing, the arbitral tribunal may order from any party, a written notice of the identity of each witness that party wishes to call along with the subject matter of the witness’s testimony and its content and its relevancy to the issues in arbitration. The testimony of the witness can be submitted in written form either as a signed document or like a document. At the request of either the party or order of the arbitral tribunal, the witness may have to be present at the oral hearings. During the course of the arbitration proceedings the arbitral tribunal may issue interim and conservatory measures such as given in Article 25:

1. An order to the respondent to provide security for all or part of the amount in dispute, by way of deposit or bank guarantee or in any other manner it considers appropriate.
2. To order the preservation, storage, scale or other disposals of any documents, goods, or samples. Property, site or thing under the control of any party and relating to the subject matter of the arbitration; and
3. To order on a provisional basis, subject to a final decision in an award, any relief which the arbitral tribunal would have the power to grant in an award, including the payment of money or the disposition of property between any parties.

 

Awards 

After hearing the dispute, the arbitral tribunal may pass the award as it considers appropriate. Article 26 lays down the provisions as to the issuance of awards and their enforcement as follows: 

The arbitral tribunal shall issue an award in writing and also shall state the reasons upon which such award is decided. The award shall also include the date of issuance, and seat of arbitration and it shall be signed by the arbitral tribunal or those of its members assenting to it. The award may be expressed in any currency. The arbitral tribunal may order that simple or compound interest shall be paid by any party on any sum awarded at such rates as the arbitral tribunal decides to be appropriate and it shall be paid not later than the date upon which the award is compiled with. 

The sole or presiding arbitrator is responsible for delivering the award to the LCIA Court, through the registrar, who then shall transmit to the parties the award authenticated by the registrar as a DIFC-LCIA Arbitration Centre, provided all the arbitration costs have been paid in full to the DIFC-LCIA Arbitration Centre as per Articles 24 and 28. Such transmission can be made either through electronic means or in paper form. Every award along with the reasons on which the award is based shall be final and binding on the parties.

The parties are allowed to carry out the award immediately and without any delay in accordance with article 27 which lays down provisions as to any correction in awards or any additional awards. The acknowledgement and enforcement of awards have been mentioned in Part 4 of the DIFC Law Number 1 of 2014, which provided that the arbitral awards can be recognized and enforced not just within the DIFC, but outside the DIFC as well. These are the significant arbitrational procedures carried out by the DIFC Arbitration Centre.