Speeding up UAE dispute resolution

23 June 2022
The recent update to Dubai’s arbitration regulations could help to expedite the process of commercial dispute resolution

Legal commentary
Joanne Strain
Partner – dispute resolution at King & Wood Mallesons

The update of Dubai’s arbitration regulations in March was the latest in a series of progressive steps in recent years that exemplify the ongoing evolution of the UAE’s legal landscape.

Legal reformers who say that “justice delayed is justice denied”, in frustration at the lengthy legal procedures that often come with the search for the truth in commercial disputes, will be pleased by the acceleration of justice in the country.

Expedited arbitration

Around the world, arbitration practitioners say that a dispute can typically last between 12 and 18 months, with a further three months to wait for an award. In complex cases, or those with uncooperative parties, proceedings can take much longer.

Many arbitration centres, including the Singapore International Arbitration Centre, Hong Kong International Arbitration Centre and the International Chamber of Commerce (ICC) International Court of Arbitration, have responded to this challenge by offering fast-track procedures, with a streamlined process for disputes below a certain value or as an opt-in possibility.

Expedited procedures offer a quicker route to a decision, typically by appointing a single arbitrator and allowing certain steps – including case management meetings, document production and oral hearings – to be dispensed with.

These changes have stolen the march on many other arbitral institutions

The new rules of the Dubai International Arbitration Centre (DIAC), which came into effect on 21 March, introduced expedited procedures where, unless otherwise agreed, principal sums claimed and counterclaimed are less than AED1m ($272,256), where the parties have agreed in writing, or in cases of exceptional urgency.

These changes have stolen the march on many other arbitral institutions with a procedure that is more expeditious. Under the DIAC rules, a sole arbitrator is to be appointed within five days and the time limit for rendering awards is three months.

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Similar provisions can be found in the well-established Expedited Procedure Rules of the ICC, which maintains a representative office in Abu Dhabi. These rules apply where the amount in dispute does not exceed $2m for arbitration agreements concluded between 1 March 2017 and 1 January 2021, or thereafter, where the dispute does not exceed $3m, unless the parties have opted out or the ICC court considers the procedure to be inappropriate.

Expedited procedures are not a feature of all institutional rules, but arbitration is a consensual process and it is always an option for the parties to agree to modified and streamlined procedures.

The 2018 Federal Arbitration Law provides the enforcement of domestic awards directly before the Court of Appeal, with a period of 60 days for enforcement or annulment.

Onshore court processes

In a similar vein, UAE court processes provide options for commercial parties seeking quick decisions, where possible.

Onshore, an increasingly popular expedited procedure is for the execution of bounced cheques. In changes that came into effect in January 2022 – arising out of UAE Federal Law Number 14 of 2020, amending Federal Law Number 18 of 1993 concerning the Commercial Transaction Law – cheque beneficiaries or bearers can now present cheques dishonoured for insufficient balance directly before the UAE Execution Courts for immediate payment. The Execution Court is expected to decide on the application in three to seven days.

Similarly, the quasi summary onshore payment order route for claims, introduced in 2018 with Cabinet Resolution Number 57, has proven extremely popular with onshore litigants.

This route provides a mechanism for immediate ex-parte judgment – for example without notice to the debtor – for a straightforward debt claim for a specified and confirmed amount, established in writing either through contractual documents or a promissory note, bill of exchange, cheque or other such instrument. The court is expected to render a judgement within five days.

Offshore court processes

In the offshore Dubai International Financial Centre (DIFC) Courts’ rules (RDC), the imperative in the overriding objective is saving expense, dealing with cases in ways that are proportionate, and ensuring cases are dealt with expeditiously and fairly.

The most prominent accelerated procedure to feature in the RDC is the alternative and simplified Part 8 procedure, which applies where the claim is unlikely to involve a substantial dispute of fact, or where there is a rule or practice direction that requires it. In a Part 8 procedure, the claimant must file any evidence they will relay on at the same time as the claim form, and an early hearing date can be set for the disposal of the claim soon after the period for filing the acknowledgement of service.

Another quick route to a final judgment that is available under the RDC is the Immediate Judgment procedure. The RDC say that the court may give immediate judgment against either party, on the whole or part of a claim, or on any issue, if there is no real prospect of succeeding or defending on the claim or issue, and there is no other compelling reason why the case or issue should be disposed of at trial. An application can be made for immediate judgment after the defendant has filed an acknowledgement of service or a defence.

The DIFC Courts has demonstrated its willingness to apply these procedures robustly and flexibly. Similar provisions exist in the Abu Dhabi Global Market Courts’ rules.

All of these procedures are examples of the routes available to users in their search for quicker dispute resolution in the UAE. However, it is important to explore with legal advisers the optimal means to resolve disputes in a particular commercial context, ideally before they arise and before embarking on a standard dispute resolution process, to ensure unnecessary costs are not incurred and time is not wasted on overly complex procedures.

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