BREAKING NEWS

On 14 September 2021, Decree No. 34 of 2021 Concerning the Dubai International Arbitration Centre (the Decree) was issued by the Ruler of the Emirate of Dubai, Vice President and Prime Minister of the United Arab Emirates, His Highness Sheikh Mohammed bin Rashid Al Maktoum. The Decree came into force when it was published in the Official Gazette for the Government of Dubai No. 531 on 20 September 2021.

The Decree (comprising 10 articles) was accompanied by a new Statute (comprising 25 articles) of the Dubai International Arbitration Centre (the Statute), the latter of which concerns the operation, regulation and management of the Dubai International Arbitration Centre (DIAC).

The Decree, which has taken many involved in arbitration in the UAE by surprise, has initiated a significant change to the arbitration landscape in the Emirate of Dubai which our clients should be aware of. Some of the provisions of the Decree and the Statute are:

1. The Decree abolishes two arbitration centres located within the Dubai International Financial Centre (the DIFC):
   a.  the DIFC-LCIA Arbitration Centre (the DIFC Arbitration Institute) (DIFC-LCIA), and
   b.  the Emirates Maritime Arbitration Centre (EMAC);
2. All assets owned by DIFC-LCIA and EMAC shall be transferred to DIAC;
3. The employees of DIFC-LCIA and EMAC, subject to the decision of the Chairman of the Board of Directors of DIAC, shall be transferred to DIAC;
4. Existing arbitration agreements involving the DIFC-LCIA and EMAC shall be valid and effective and, unless the parties agree otherwise, DIAC shall replace DIFC-LCIA and EMAC in hearing any disputes relating to these arbitration agreements;
5. Arbitral tribunals which have been formed by the DIFC-LCIA and EMAC as at the date of the Decree coming into force (20 September 2021), unless the parties agree otherwise, shall continue with the arbitral proceedings in accordance with the rules chosen by the parties, but these proceedings will now be under DIAC’s supervision;
6. The Dubai Courts and DIFC Courts will continue to resolve matters pertaining to DIAC, DIFC-LCIA, and EMAC arbitral proceedings and awards in accordance with the applicable arbitration laws;
7. To the extent, they do not contradict the Decree and the Statute, the existing DIAC, DIFC-LCIA, and EMAC arbitration rules shall remain in force until new DIAC arbitration rules are approved;
8. DIAC shall implement the provisions of the Decree and the Statute by 19 March 2022, i.e., within six months from the date of the Decree coming into force (20 September 2021);
9. If parties do not agree on a seat (legal place) of arbitration, the default seat of the arbitration shall be the DIFC and the applicable procedural law shall be DIFC Law No. 1 of 2008 as amended;
10. DIAC’s organisational structure shall comprise:
    a.  The Board of Directors of no more than nine members, including its Chairman and Vice-Chairman, to be appointed by the Ruler of the Emirate of Dubai;
    b.  The Court of Arbitration of no more than 13 members, including its President and Vice-President; to be appointed by the Board of Directors;
    c.  The Administrative Body performs administrative functions under the supervision of its Executive Director.

Please find a copy of the Official Gazette for the Government of Dubai No. 531 enclosed with this client alert.

Clearly, the Decree and the Statute have significantly altered the legal landscape in terms of arbitration in Dubai and, like others, we wait with eager anticipation to see how the provisions of the Decree and the Statute will be implemented in practice.

If you think your existing arbitration agreement may be affected by this new development in the law, or you would like to discuss its effect generally, then please do not hesitate to contact us:

Sergejs Dilevka Senior Associate, Dispute Resolution +971 4 377 8100 sergejs@galadarilaw.com