2024 saw a number of developments in the legal landscape of the UAE, with Dubai launching a new Judicial Authority, arbitrateAD launching new rules, and the UAE courts handing down decisions that clarified certain key arbitration principles and their application under UAE law. Read our recap of these major themes and much more below.
DIFC Court of Appeal rules that a DIAC provisional award for interim relief measures is enforceable as an 'award'
In March 2024, the highest court of the Dubai International Financial Centre ("DIFC") ruled that a provisional award issued by a foreign seated tribunal providing for interim measures could be enforced as an 'award' in the DIFC. In doing so, the court took the view that interim relief can be made by way of an award, which is an encouraging development that avoided an unduly technical distinction and respected the order of a foreign-seated arbitral tribunal. This was an important decision for parties in international arbitration in the region.
UAE courts give effect to Dubai Decree 34
In three recent decisions, the UAE courts considered the practical implications of Decree No. 34 of 2021, which abolished the DIFC-LCIA, and confirmed that DIFC-LCIA arbitration agreements remain valid and binding. These decisions provide clarity on the enforceability of arbitration agreements that referred to the DIFC-LCIA and make it clear that the UAE Courts will respect the parties' agreement to arbitrate, which was contrary to the decisions reached in foreign jurisdictions. However, the position in other jurisdictions may be changing as, in February 2025, the US Court of Appeals overturned the ruling of a Louisiana District Court that had refused to compel the parties to a DIFC-LCIA arbitration agreement to arbitrate on the basis that the Dubai government and the US courts do not have the power to unilaterally change the arbitration forum, and therefore the agreed forum was no longer available. The Court of Appeals held that that the parties' primary intent was to arbitrate generally, and therefore sent the case back to the district court to reconsider.
Unilateral arbitration clauses not enforceable in Dubai
In October 2024, the Dubai Court of Cassation held that unilateral arbitration clauses, where only one party has the right to refer a dispute to arbitration, were not enforceable in Dubai as they do not represent a clear and explicit mutual agreement to arbitrate. Such clauses are often considered attractive to financial services providers in particular. Parties should therefore consider avoiding the inclusion of unilateral arbitration clauses in cases where the UAE courts may have jurisdiction over a dispute.
ArbitrateAD publishes new rules
Hot on the heels of the Oman Commercial Arbitration Centre (2018), Dubai International Arbitration Centre (2022), Saudi Centre for Commercial Arbitration (2023), and the Cairo Regional Centre for International Commercial Arbitration (2024), arbitrateAD published its new rules in February 2024. The new rules introduced several innovative features that align with international best practices in arbitration and represent a significant step forward for arbitration in Abu Dhabi, the UAE and the region as a whole.
Dubai Court of Cassation restores ability to recover legal costs in ICC arbitration
The Dubai Court of Cassation has overturned its previous stance on the recoverability of legal costs following ICC arbitration, which it had previously deemed contrary to UAE law unless expressly permitted in the underlying arbitration agreement. The court recognised that the ICC Rules contains an "express and clear" stipulation for the recovery of legal costs by a successful party.
Dubai Court of Cassation provides useful guidance on courts' approach to arbitration
In October 2024, the Dubai Court of Cassation issued its decision in Case No. 606/2024, and in doing so provided useful guidance on the recently amended UAE Arbitration Law, including that the amendments did not have retrospective effect. The case, which concerned an application to annul and award also confirms the arbitration friendly nature of the Dubai Courts, and the courts' willingness to enforce the provisions of the Arbitration Law.
Dubai's New Judicial Authority: What you need to know
On 18 April 2024, the Ruler of Dubai established the new Judicial Authority for Resolving Jurisdictional Conflicts between the DIFC Courts and the Judicial Bodies in the Emirate of Dubai, replacing the previous Joint Judicial Committee. The New Judicial Authority is tasked with a more definitive mandate: to focus solely on being the final arbiter of jurisdictional conflicts in Dubai. As such, its purview extends beyond the DIFC Courts and the Dubai Courts, and its decisions now carry significant implications for litigants in the Emirate.
Reversal of Sandra Holding: DIFC Court of Appeal holds that the DIFC Courts have an implicit jurisdiction to grant Freezing Orders in support of pending foreign judgments
In Sandra Holding Ltd v Al Saleh, the DIFC Court of Appeal ruled that the courts lacked jurisdiction to grant freezing orders in support of a pending judgment of a foreign court. This was seen as a major setback for creditors and international litigants who relied on the DIFC Courts to prevent the dissipation of assets. However, in the recent decision of Carmon v Cuenda, the DIFC Court of Appeal held that Sandra Holding was wrongly decided and that the Courts have an implicit jurisdiction to grant such remedies. As a result, creditors and international litigants can be reassured that worldwide freezing orders are now (once again) obtainable from DIFC Courts in support of pending foreign judgments.
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Stuart Paterson
Managing Partner, Middle East and Head of Middle East Dispute Resolution, Dubai
Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.