Introducing The New UAE Federal Arbitration Law

The New Law is a brave attempt at modernizing the practice of arbitration in the UAE, however, its true impact will ultimately be determined by the manner in which the UAE Courts interpret and apply its clauses and by the number of successful nullification applications made

- James Harbridge

The introduction of Federal Law No. 6 of 2018 on Arbitration (the “New Law”) across the UAE is further evidence of the country’s intent to modernize and bring its arbitration laws in line with international standards. Whilst the New Law represents a significant enhancement on the previous statutory position, it remains to be seen how the UAE Courts will interpret its various provisions.

Additionally, further clarity may be required in order to maximize the true potential of the New Law.

Introduction

On 16th June, 2018, the New Law - based on the UNCITRAL Model Law - came into effect in the UAE, repealing Articles 203 to 218 (the “Old Law”) of Federal Law No. 11 of 1992 (as amended) [the “Civil Procedure Law”].

The arbitration provisions of the Old Law had long been perceived by many to be outdated and not reflecting the best practices in arbitration. Its provisions - only 16 in total – left considerable scope for recalcitrant debtors to frustrate the enforcement of awards, as evidenced by the number of successful nullification challenges that have been raised against domestic awards in recent years.

This article examines some of the ways in which the New Law has updated the arbitration landscape in the UAE as well as some areas where uncertainty remains.

Improvements

Removing ambiguity concerning an agreement to arbitrate

While both the Old and New Law require an arbitration agreement to be in writing, the Old Law was silent as to what constitutes the written form. The New Law has now clarified that: