Arbitration Procedures at the Ras Al Khaimah Centre of Reconciliation & Commercial Arbitration

“Great progress was made when arbitration treaties were concluded in which the contracting powers pledge in advance to submit all conflicts to an arbitration court, treaties which not only specify the composition of the court but also its procedure.”

                                            ---as quoted by Ludwig Quidde, a German Politician. 

 

Indeed, over the past few decades, Alternative Dispute Resolution (ADR) methods such as arbitration, reconciliation, and negotiation, among others, have gained substantial popularity all across the globe for resolving various kinds of commercial disputes, especially matters involving international commercial transactions. As opposed to referring the commercial disputes to the courts, people started leaning more towards ADR methods to resolve the commercial disputes, and to avail of the various benefits followed by opting for either of the ADR methods. As quoted above, the option to decide on the procedure to be implemented to resolve the disputes, which includes even electing the arbitrators of their choice and speediness of the entire procedure as compared to the courts has convinced many people to choose ADR methods over court litigation. The United Arab Emirates (UAE), being the dominant and most preferred international commercial hub, experiences various kinds of commercial disputes on a frequent basis. The UAE recognizing the importance of having strong and clear arbitration rules governing the arbitration procedures has come up with the Federal Law Number 6 of 2018 on Arbitration (the Arbitration Law), modelled after the United Nations Commission on International Trade Law (UNCITRAL Model Law), the first stand-alone legislation. 

 

The scope of Arbitration Law is extended to govern arbitration procedures all across the UAE, except for those arbitrations falling under the financial free zones which shall be regulated by their own laws. The growth of arbitration in the UAE can be noticed by the number of arbitration centres formed all across the UAE to effectively cater to the growing demands of people opting for ADR methods to resolve disputes. Some of the leading arbitration centres which conduct the arbitration proceedings in line with their own set of rules and regulations in UAE are: 

Dubai International Arbitration Centre (DIAC- Arbitration Rules 2007), Dubai International Financial Centre, London Court of International Arbitration Centre (DIFC-LCIA- DIFC-LCIA Arbitration Rules 2008), Abu Dhabi Conciliation and Arbitration Centre (ADCCAC – Procedural Regulations of the ADCCAC), The Emirates Maritime Arbitration Centre (EMAC), Sharjah International Commercial Arbitration Centre, Ras-Al-Khaimah Centre for Reconciliation and Commercial Arbitration (R.A.K Reconciliation and Arbitration Centre).

This article will lay out an overview of the arbitration procedure of the R.A.K Reconciliation and Arbitration Centre as specified in its Articles of Association (the R.A.K Regulations) As per article 2 of the R.A.K Regulations, all the commercial disputes submitted to the R.A.K Chamber for reconciliation or arbitration, by the parties in dispute as per their prior agreement of the same, or due to the request of either party, provided it is consented by the other party, shall be regulated and governed by the rules and regulations specified in the R.A.K Regulations. 

In order to resolve the disputes under the R.A.K Reconciliation and Arbitration Centre, the R.A.K Chamber has suggested that the parties preferring to submit their disputes to the R.A.K Reconciliation and Arbitration Centre, incorporate either one of the below state clauses in their contracts:

• Articles of Reconciliation;
• Articles of Arbitration; or
• Article of Reconciliation and Arbitration, in order to avail both the options of reconciliation and arbitration.

 

which states that all the disputes arising out of or connected to the contract or pertaining to the interpretation, execution, deletion, revocation or cancellation of the contract, shall be referred to the R.A.K Reconciliation and Arbitration Centre and will be conducted in either of the above-stated methods as specified in the clauses of their contract. This act of including the above-stated clauses by the parties reflects their consent to adhere to the procedures and rules and regulations governing the methods of reconciliation and arbitration. 

 

By the virtue of article 4 of the R.A.K Regulations, the parties are conferred with the right to decide in writing on the method of arbitration in line with different rules, to the extent where it may include the option of non-compliance to the R.A.K Regulations and minimizing the role of the R.A.K Chamber in applying the rules specified in the R.A.K Regulations while selecting the arbitrators. Article 5 of the R.A.K Regulation further states that the independent state of the arbitration clause from the subject matter of the dispute mentioned in the contract, which implies that, even in cases where the contract has been revoked for any reason, the arbitration agreement remains effective and valid, unless otherwise agreed by the party on different terms. 

 

Formation of the R.A.K Reconciliation and Arbitration Committee’s board members (The Committee): 

Article 10 of the R.A.K. Regulations state that The Committee’s board members shall be formed of the members of the reconciliation and arbitration Committee or another team of experts, provided they are not less than five (5) in number, as per the internal regulations of the R.A.K Chamber. Thereafter, the board members shall elect the chairman. 

 

Reconciliation procedures: 

Article 21 of the R.A.K Regulations prescribes the reconciliation procedure as follows:

The parties preferring to opt for the reconciliation procedure are required to make a written request to the secretary of the R.A.K Reconciliation and Arbitration Centre (the Centre), stating their interest in submitting their dispute for reconciliation before the Centre. The application shall encompass all the necessary information pertaining to the litigation, and also the applicant’s claims along with the documents supporting such claims. Thereafter, the secretary is required to notify the other party of the submitted application within a period of seven (7) days from the date when such application has been received. The other party is then obligated to submit his contentions and opinions regarding the litigation within a period of fifteen (15) days from the date of being notified of such application. Subsequently, the reconciliation tribunal is created by The Committee in line with relevant regulations. 

However, the parties are at liberty to exercise their right to object to the reconciliation, within a period of two (2) weeks from the date of notification of the formation of the reconciliation tribunal. On the expiry of the stipulated time to raise objections, the reconciliation procedure will commence. Pursuant to The Committee’s right, they can request a down payment on the account of charges as sanctioned by the provisions of the R.A.K Regulations. The reconciliation tribunal shall call the parties to present themselves before them to hear their pleadings, after thoroughly evaluating the case of the parties. Therefore, it is necessary that the parties attend personally or through an attorney. If the parties come to terms with each other and agree on a solution, then such a solution shall be recorded in minutes. 

The reconciliation tribunal is required to execute its duties within a period of two (2) months from the date of its commencement or can extend the term for a similar period by a resolution from The Committee. However, the failure of the reconciliation procedure shall not prejudice the rights of the parties who have sought this method to resolve the dispute. 

 

Arbitration Procedures: 

Article 23 of the R.A.K Regulations provides that the parties wishing to opt for arbitration shall submit an application to the chairman of the Centre, which shall be attached with the arbitration agreement, along with the supporting documents of the applicant’s claim. Further, the application shall encompass the following details:

• Name of the applicant, along with their address and nationality;
• Name of the defendant, along with their address and nationality;
• The subject matter of the dispute and the claims of the applicant;
• Name of the arbitrator, their address, or consent to The Committee to select an arbitrator.

 

The application and documents attached to the application shall be either in three (3) or five (5) copies based on the number of arbitrators. Thereafter, the secretary of the Centre is required to forward the copy of the arbitration request to the defendant within a period of seven (7) days from the date of receiving the same. In case, where the defendant prefers to reject the arbitration request, then the defendant can refrain from conveying his response to the arbitration request for a period of thirty (30) days, from the date when such arbitration request was sent, it shall then be deemed as a rejection from the defendant’s side to proceed with the arbitration request. Where the defendant is in agreement with the arbitration request, then he is required to dispatch his response to the Centre, along with five (5) or three (3) copies as per the number of arbitrators, along with the supporting documents of his claims, within a period of thirty (30) days of receiving the arbitration request. Further, the response shall include the following details:

• Name and address of his selected arbitrator;
• His replies to the claims raised by the applicant;
• Any counter pleas – if any;

Thereafter, the secretary of the Centre shall forward the defendant’s reply to the applicant within a period of three (3) days from receiving the defendant’s response. However, irrespective, if the defendant replies or fails to respond to the arbitration request sent to him within the stipulated period of time given to do the same, the arbitration procedures shall still be conducted. Subsequently, the secretary of the Centre shall submit the arbitration application to The Committee’s chairman. Thereafter, The Committee shall conduct a meeting within a period of thirty (30) days, from the date of receiving all the responses and accordingly execute the following duties:

• Accept the selected arbitrators by parties;
• Appoint the arbitrators;
• Where the parties have not specified the place of arbitration, The Committee shall fix a place of arbitration;
• Request for the deposit of the specified arbitration charges;

Further, The Committee shall allow the parties to select the chairman within a period of twenty-one (21) days in line with article 18 of the R.A.K Regulations. Thereupon, the secretary of the Centre is required to officially convey the arbitration authority of their appointment, along with the precise details of the dispute and the information of the litigants. 

 

Thereafter, the arbitrator, whether appointed by The Committee or selected by the parties, is required to convey a written approval of his appointment within a period of two (2) weeks from the date of formally being notified of their appointment, failing to do so may imply as to denying such delegation of the authority and can lead to the dismissal of such arbitrator. It is necessary that the arbitrator shall not be connected to the parties in a manner that can give rise to doubt about their neutrality while executing the arbitration proceedings. If the arbitration committee has accepted the appointment, the secretary of the Centre shall forward the arbitration file to the arbitration committee. Thereafter, the arbitration committee shall study and evaluate the memorandums and other documents of the parties submitted to them, and then hear their pleadings. The arbitration committee can further request additional documents and witnesses if necessary, for determining the dispute justly or else they can decide the case in line with the documents submitted as long as such documents are sufficient to conclude the case. 

 

Article 35 of the R.A.K. Regulations state that the arbitration committee is obligated to conduct the proceedings based on the below stated, three essential principles of judicial litigation:

• Acknowledge and respect the right of defense, by allowing both parties to have a fair chance to present their statements and pleadings and evidence before issuing the arbitration award;
• Allowing both the parties to thoroughly review all the relevant papers and documents submitted by the other party;
• Give equal treatment to both parties.

The arbitration committee is required to issue the award within a period of three (3) months from the date of receiving the arbitration file unless otherwise, the parties agreed to an extended period of time. 

 

Article 30 of the R.A.K Regulations confers a right on the parties to request The Committee to consider the appointment of any of the arbitrators based on justified reasons. Generally, the procedural rules to which both parties consented shall be applicable to any dispute presented to the R.A.K chamber, and in cases, where there are no provisions regulating certain matters in the dispute, or where the parties are not in agreement, then the respective authorities of reconciliation or arbitration shall decide the procedures necessary to be followed, but such procedures shall not be in contradiction to the laws of the country. 

 

Article 18 of the R.A.K Regulations prescribes rules applicable to the appointment of the arbitrators and the formation of a tribunal. The litigants are allowed to either select an individual arbitrator or a tribunal of three arbitrators from among the Committee members, or the secretary-general or from the list of the arbitrators approved by the R.A.K chamber or as specified by their agreement to not comply with rules and regulations of R.A.K Centre. As per article 19 of the R.A.K Regulations, the qualifications of the reconciliation and the arbitrator are as follows:

• The arbitrator or the reconciliation shall not be a minor;
• They shall not be restricted from exercising their civil rights because of a penal punishment or insolvency;
• They shall not be someone who is connected to the litigants in any manner;
• Any guardian who was previously involved in resolving the dispute by reconciliation or has given the opinion of the same, unless otherwise approved by the parties.

 

Article 39 of the R.A.K Regulations states the circumstances when the arbitration procedures can be ceased as per the UAE laws as follows: 

1. Where the arbitrator is unavailable or dismissed or expired; 

2. Where either party expires, or the company expires, of where such litigants lack the capacity to commence the proceedings, until the appointment of an attorney for the successors, or a liquidator for the company or a guardian or another attorney for either party; 

3. Failure to pay the charges prescribed by the R.A.K Regulations; 

4. Where the request has been made to the competent court to take legal action against the witnesses who failed to present themselves before the arbitration committee or denied responding to any query; 

5. Where a request is made to the competent court to issue an order to present the document with the other party; 

6. Where there has been a claim of forgery of the documents submitted on which the arbitration award shall be based. 

 

Article 43 of the R.A.K Regulations states that the Arabic language shall be adopted for the purpose of conducting the arbitration procedures unless otherwise the parties or the arbitration authority agreed to a different language as necessary. However, the award shall be in the Arabic language and where it is in another language, then the translated version of the award shall be attached along with the original award which is in the Arabic language. Further, the arbitration authority can at any point of the arbitration proceedings till the closing of the pleading procedures can give an opportunity for the parties to negotiate and settle their matters. Where the parties settle, then by the virtue of such agreement the arbitration procedures shall not stop but cease. At the request of the parties, the arbitration authority may further issue the award of the settlement based on what they agreed. 

 

Arbitration Awards: 

Article 45 of the R.A.K Regulations states that as long as the provisions specified in article 20 of R.A.K Regulations are observed, then the final award or any other award issued by the arbitration authority in the process of arbitration procedures shall be accepted by a majority. The award shall be duly signed by the members who approved it and those members who have any objections can convey in writing, the reasons for raising such objections and sign the order, which shall be attached to the arbitration award. Where the majority of agreement regarding the arbitrational award has not been attained then, the final award of any other resolution accepted by the arbitration authority during the arbitration procedures shall be issued by the chairman alone. The final award of the authority shall be issued in writing and also shall encompass the following details:

• Arbitration agreement;
• Name of the arbitrators and the parties;
• Brief of the litigation;
• Applications, defenses submitted by the parties and the reasons on which such application has been accepted or denied;
• Charges applicable on the arbitration and the party who shall bear such charges;
• Date and place of the award.

 

Except by the provisions of article 34 of the R.A.K Regulations, the arbitration award issued in the country in accordance with these regulations shall not be appealable by any form of appeal. Either party, by the virtue of the right conferred on them, can request a complete or partial explanation of the award by applying to the secretary of the Centre, within a period of fifteen (15) days, from the date of such notification. Thereafter, The Committee shall further refer the application to the arbitration authority within a period of seven (7) days and also send a copy of the same to the other party. The arbitration authority is required to submit its explanation to the secretary of the Centre within a period of one (1) month from the date when such application has been referred to them, as the explanation is deemed as an integral part of the award. The arbitration authority has the right or as per the request from either of the parties, can request the other party to make rectifications of any mistakes in the material calculations of the award. Thereafter, the award shall be registered with the secretary of the Centre, subsequent to deciding the costs of the arbitration and signed by the arbitration authority. 

 

Charges of Reconciliation and Arbitration: 

Article 48 of the R.A.K Regulations provides that the charges of reconciliation and arbitration procedures shall be inclusive of the R.A.K chamber fees, arbitration charges, normal expenses spent by parties to prepare their defenses and any other such administrative expenses like rent halls, copies, photocopying, registration and other charges necessary for reconciliation or arbitration. Non-payment of the charges prescribed by the R.A.K Regulation can even result in ceasing the arbitration or reconciliation procedures. The fees shall be paid to the treasury of the R.A.K chamber, while on the other hand the arbitrator's fees shall be kept as a trust with the treasury. 

The basic features like maintaining the confidentiality of the information shared by the parties, the right to select arbitrators, choosing the place of litigations, and the arbitration or reconciliation procedures, shall remain unchanged in most of the rules pertaining to different arbitration centres. Further, the parties can still exercise their right to refer the dispute to the courts for claiming temporary injunctions, even after the commencement of the arbitration proceedings, which also shall be notified by the parties to the secretary of the Centre and the arbitration authority.