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  • Writer's pictureAkram Cheik - Lawyer

Arbitration in Contracts in the United Arab Emirates

Arbitration is an alternative method of dispute resolution that involves the parties involved in a dispute agreeing to submit their dispute to one or more arbitrators, rather than pursuing the resolution of the dispute in state courts.

Furthermore, arbitration is a private and confidential process, in which the parties choose an impartial third party to resolve their dispute by rendering a binding decision. This decision, called an arbitration award, is binding and can be implemented in the same way as a judgment rendered by a court.

The interest of arbitration lies in several advantages it offers compared to traditional legal proceedings, in particular confidentiality with regard to arbitration hearings and the documents exchanged between the parties which are generally confidential, unlike public legal proceedings. Furthermore, it allows for a certain speed because arbitrations are often faster than court proceedings, because the parties can set their own timetable for the arbitration. This flexibility also allows the parties to choose their own arbitrator and define the rules of the arbitration, which allows the procedure to be personalized to meet the specific needs of their dispute.

As for the parties, they can choose arbitrators with particular expertise in the area of their dispute, which can guarantee a more informed decision. But also easier enforcement because arbitral awards are enforceable in almost all countries, which facilitates the recognition and enforcement of the decision.

In addition, if the United Arab Emirates has a central place in terms of arbitration in golf, it is nevertheless necessary to remain cautious when supposed investors choose in the contractual stipulations that the settlement of commercial or civil disputes will be settled through arbitration. , as this often hides a desire to avoid the federal courts in Dubai.

I – The characteristics of arbitration

A – The characteristics of referees

The judges of the arbitration are called "arbitrators". Unlike state court judges, arbitrators are chosen by the parties to the dispute rather than appointed by the state.

Arbitrators can be experienced professionals in the area of the dispute or technical experts in a specific area related to the dispute. Arbitrators may be chosen for their expertise, impartiality and professional reputation. The disputing parties may also choose a sole arbitrator or a panel of arbitrators.

Arbitrators must be impartial and independent and must act impartially in their treatment of the parties. They must also follow the procedures established in the arbitration, including giving the parties the opportunity to present their case and provide evidence. Arbitrators can also make legally binding and enforceable decisions.

It should be noted that arbitrators are not judges of law and do not have the power to enforce the law coercively. However, the disputing parties may agree in advance to accept the arbitrator's decision as final and binding, meaning that it may be enforced and enforced as a court order.

B - The place of the United Arab Emirates in the field of arbitration

The United Arab Emirates has a long tradition of arbitration and is considered one of the leading arbitration centers in the Gulf region. The UAE has established a strong legal and regulatory infrastructure to support international arbitration, making it an attractive destination for parties wishing to resolve their disputes through arbitration.

Dubai International Arbitration Center (DIAC) is one of the most reputable arbitration organizations in the UAE, providing arbitration and mediation services for over 20 years. DIAC has extensive experience in resolving international commercial disputes, particularly in the areas of construction, energy and maritime affairs.

Abu Dhabi Commercial Conciliation and Arbitration Center (ADCCAC) is another prominent arbitration organization in the UAE, providing dispute resolution services for over 20 years. ADCCAC has extensive expertise in resolving international commercial disputes, particularly in the areas of real estate, telecommunications and public contracts.

The UAE has also put in place a strong legal framework for arbitration, including the Federal Arbitration Act of 2018 which modernized existing arbitration laws. This law allows the parties to choose the place of arbitration, the language of the arbitration and the law applicable to the arbitration. It also provides detailed procedural rules for arbitration.

In summary, the UAE has a strong legal infrastructure and reputable arbitration organizations, making it an attractive destination for parties wishing to resolve their international business disputes through arbitration.

C – Places of arbitration in the world

Arbitration varies widely from country to country depending on many factors, including legal traditions, government policies, and business culture. However, some countries have a long tradition of arbitration and are considered major centers for international arbitration.

These countries include Switzerland, the United Kingdom, France, the United States and Singapore. These countries have strong arbitration laws, a well-developed legal infrastructure, reputable arbitration organizations and an international business culture.

In particular, Switzerland is often considered the world's leading center for international arbitration due to its arbitration-friendly legal framework, political neutrality and strategic location in the heart of Europe. The International Chamber of Commerce (ICC) Arbitration Center in Paris, France is also one of the leading centers for international arbitration, as it handles a large number of international commercial disputes each year.

However, it should be noted that the use of arbitration is increasing in many countries due to the globalization of business and the growing demand for effective and specialized dispute resolution solutions.

II – The use of arbitration for fraudsters in Dubai

A - The interest of resorting to arbitration for fraudsters

Scammers may include an arbitration clause in their contracts in an attempt to limit legal remedies for potential victims of their scams. Arbitration can be more beneficial for scammers because it can be cheaper, faster, and less likely to publicly reveal their fraudulent activities.

Additionally, scammers may seek to include arbitration clauses in their contracts to avoid facing state courts and impartial judges who might be more likely to rule in favor of the injured party. By using arbitration, scammers can choose an arbitrator whom they consider to be more favorable and who might be more inclined to make a decision in their favor.

Finally, scammers may include an arbitration clause to make the dispute resolution process more difficult for potential victims, who may be less familiar with arbitration procedures and who may have difficulty finding an impartial and competent arbitrator. .

It should be noted that arbitration clauses are not necessarily illegal or suspect per se, and are often used in legitimate contracts to resolve disputes efficiently and confidentially. However, it is important to read contracts carefully and understand the consequences of any arbitration clause before signing a contract.

B - Possibilities of avoiding recourse to arbitration

If the contract stipulates that arbitration is the means of dispute resolution, it may be difficult to avoid it altogether. However, there are a few possible ways to avoid or minimize reliance on arbitration.

Negotiate before signing the contract It is possible to negotiate with the other party before signing the contract to agree on a means of settling disputes that is different from arbitration. For example, the parties may agree to submit any dispute to mediation or negotiation.

Also, Include a pre-arbitration mediation clause, the parties can agree to try mediation before resorting to arbitration. Mediation is an informal and confidential process of negotiation assisted by a neutral third party to help the parties reach a mutually acceptable solution. If mediation is not successful, the parties can then proceed to arbitration.

Thus, Include a pre-arbitration negotiation clause, the parties can agree to negotiate before resorting to arbitration. Negotiation is an informal process in which parties attempt to reach a mutually acceptable agreement. If the negotiation does not succeed, the parties can then proceed to arbitration.

Furthermore, submitting the matter to a court, It is possible to raise the question of the validity of the arbitration clause in court. If the court finds the clause invalid for any reason, then the parties may be able to resolve their dispute in state court.

Finally, it is important to note that parties must act quickly if they wish to avoid arbitration. If they fail to take action within the time specified in the contract, they may be forced to resort to arbitration.

C - Criminal matters excluded from the field of arbitration

In general, criminal disputes are excluded from arbitration. Criminal law is in the public domain and not in the private domain, and the State has a monopoly on the prosecution and punishment of criminal offences.

This means that the parties cannot agree to submit a criminal dispute to arbitration. Indeed, arbitration is a dispute resolution mechanism that is based on the willingness of the parties to settle a dispute privately and confidentially, outside the state judicial system. On the other hand, criminal law aims to protect the general interest of society by punishing the perpetrators of criminal offences.

In addition, in many countries, courts are required to adjudicate criminal cases in a public manner, following strict procedures, to ensure fairness and transparency. Therefore, criminal disputes cannot be submitted to arbitration as this would violate the principle of publicity and fairness.

In summary, criminal law generally excludes arbitration. Criminal disputes are in the public domain and should be handled within the state justice system to ensure fairness and transparency.

Akram Cheik, Lawyer

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