Disputes That Can'T Be Arbitrated

Crimes, matters opposing public policy, family matters and some commercial-civil disputes (despite having an arbitration clause) cannot be settled through arbitration

Arbitration is a specifically established mechanism for resolving commercial disputes, concerning a contractual relationship between the parties. Recently, arbitration has become a booster for commercial activities which in turn, has completely changed the perception of the judicial system. However, there are certain disputes which cannot be settled through arbitration.

Disputes including crimes, matters opposing public policy, and family matters are some conflicts which can’t be settled through arbitration. The list is non-exhaustive as there are numerous commercial and civil disputes, which, despite having an arbitration clause in the agreement, cannot be settled through arbitration. Through this article, Commercial Lawyers of UAE will discuss the matters related to the mandatory rule of Public Policy in which arbitrators fail to hold jurisdiction.

Any agreement entered into by parties to resolve the issue through arbitration shall be declared null and void and even if the parties sought an arbitration award. Following are the four types of disputes that cannot be referred to an arbitration institution as it is against the mandatory rule of public policy. Commercial Agency Federal Law Number 18 of 1981 governs the commercial agencies agreements in UAE.

Article 1 of the foregoing law defines commercial agency as “Representing the principal by an agent to distribute, sell, present and provide a commodity or service inside the UAE against a commission or profit.” Further, according to Article 27 and 28 of the Commercial Agency Law, a specialized committee that is Commercial Agency Committee will have the authorization to have exclusive jurisdiction over such matters and contradictory agreement shall be declared null and void.