阿联酋仲裁和迪拜国际金融中心仲裁之比较（二）

更新时间：2017-12-06 16:56:39  张振安 临时仲裁ADA 编辑：lianluobu  点击次数：2891次

可仲裁性

除“书面”和“能力”要求外，当事人还应考虑是否可将任何潜在争议事项提交所选的仲裁地通过仲裁解决。

不能和解的事项不允许仲裁（《民事诉讼法》第203（4）条）。公共秩序问题具有不可和解性。阿联酋法院在一些特定的领域拥有排他管辖权，例如刑事事件和人身法律事务，这些事情不具可仲裁性。此外，与商业代理和劳资纠纷有关的事项不能通过仲裁解决。

根据迪拜最高法院的一些裁定，必须考虑可仲裁性问题，法院认为，与计划外房地产交易有关的一些事项具有公共秩序性质，因此无能通过仲裁解决。公共秩序被认为包括诸如婚姻、继承和宗族、政府体系、贸易自由、财富流通、个人所有制规则以及其他立足于社会的规则和原则等，其中这些事项与伊斯兰教法的确定条款和基本原则（《阿联酋民事交易法》第3条）不冲突为原则。

为此，最高法院于2012年根据《阿联酋民事交易法》（2012年2月12日第180/2011号案件）第3条的公共秩序原则撤销了仲裁裁决。该仲裁裁决认定，购销协议因违反2008年第13号《关于规范迪拜临时房地产登记条例》（法律第13号）第3条规定而进行计划外购房的买卖协议无效。该第3条规定，在迪拜临时房地产登记册上的任何计划外的财产的交易需向迪拜国土局进行强制登记。该买卖协议没有登记。最高法院以仲裁员无权对有关计划外财产登记事项作出裁决为由推翻了仲裁裁决，因为该问题属于《阿联酋民事交易法》第3条规定的公共秩序问题。

该判决之后，有人担心阿联酋法院可能会以违反公共秩序为由裁定任何房地产合同无效。但是，这一裁定和相关公共政策豁免仅限于涉及特定案件（该案件涉及特定条款规定要向迪拜国土部门进行计划外交易登记），而不是所有房地产事项。

《DIFC仲裁法》没有明确规定哪些特定争议不可仲裁。但是，由于《DIFC仲裁法》仅涉及民商事纠纷，因此推断DIFC的可仲裁范围并不涉及刑事和家庭纠纷。《DIFC仲裁法》规定，消费者合同和劳动争议只能在争议发生后由雇员或消费者同意的情况下才能进行仲裁。《阿联酋民事交易法》第3条中对于公共政策的考量可能适用于DIFC。迪拜国际金融中心是迪拜酋长国的一部分，因此预计其将遵循相同的旨在履行与阿联酋较高社会治理相关的阿联酋公共、政治、社会或经济利益的公共秩序原则和规则。

仲裁员的责任

2016年9月18日的《第7号联邦法令》对《刑法》的某些条款进行了修改。引起广泛关注和评论的主要修订是第257条，该条之前仅针对法庭指定的专家和翻译。根据该修正案，如果发现仲裁员违反了公平和公正的责任时，就有可能遭受临时监禁。

第257条适用于所有从事仲裁的迪拜或境外仲裁员，因为第257条的广义措辞提到由法院、管理机构（如DIAC或DIFC-LCIA）委任的任何仲裁员、或当事人选定的仲裁员。

意料之外的新修正案的适用还有待观察。公共检察官将如何处理新修订的第257条之前提出的指控有待进一步观察。为此，应当指出，在缺乏公正的情况下证明犯罪意图并非易事。如果有确凿的证据证明犯罪已经发生，检察官只会将可能的诉讼提交给刑事法院。

目前还不清楚现有或潜在的仲裁员对这一新修正案作出什么反应。一些证据表明，仲裁员越来越不愿意接受新的指定或继续从事仲裁工作。但是，值得注意的是，辞去仲裁员职位并非没有风险。DIAC规则第207条第（2）款规定，接受委任后没有充分理由辞退，仲裁员可能要承担赔偿责任。法律变化是否可以认为是合理理由？

不公平或有偏见的仲裁员必须面对不利推定。适当的惩罚可以是终止担任仲裁员或将其从仲裁机构的名单中删除。临时监禁作为一种惩罚形式似乎比较极端，并与现有的国际仲裁做法相矛盾。例如，“DIFC仲裁法”和ADGM条例规定仲裁员要对故意不法行为负责，但不至于收到临时监禁处罚。

鉴于适用这项新法律的不确定性，欢迎仲裁界对此进行澄清。

仲裁地

在大多数法域，仲裁地的选择决定了以下两点：

• 有关仲裁协议和程序法律。

• 对仲裁具有监督权的管辖法院。这引起了迪拜和阿布扎比的冲突，因为阿联酋受到普通法和大陆法管辖。在迪拜，即使在明确说明仲裁地的情况下，这也导致了可适用的监督管辖权的冲突（见下文）。

DIFC AmarjeetSingh Dhir v Waterfront Property Investment Limited and Linarus案的初审判决中，Hwang法官总结了准确认定仲裁地的重要性：“这个案件的关键在于，如果双方都希望适用“DIFC仲裁法”且DIFC法院对仲裁具有管辖权，他们应当明确选择DIFC作为其仲裁协议的仲裁地”。“迪拜酋长国”一词不足以认定DIFC为仲裁地。因此，建议合同当事方事先同意DIFC法院或迪拜当地法院的管辖权以作为仲裁监督的首选。当事方需要对照DIFC法律制度以了解根据阿联酋法律制度仲裁的利弊。可以说，在DIFC中进行仲裁比较有利，因为DIFC仲裁法适用仲裁。DIFC仲裁法为仲裁程序提供了一个现代而全面的体制，相反阿联酋（在ADGM之外）进行仲裁时适用的《民事诉讼法》对仲裁规定有限。

DIFC法院和迪拜法院管辖权的冲突

迪拜国际金融中心法院和迪拜法院之间的管辖权冲突往往出现在涉及执行国内外仲裁裁决的案件中。在最近的一些判决中，特别值得注意的是在BanyanTree 案件的判决中，DIFC法院确认DIFC法律允许DIFC法院作为“渠道管辖者”执行外国和国内仲裁裁决和外国判决（针对位于迪拜境内的裁决/判决债务人），即使裁决/判决的债务人与DIFC没有任何关系。

最近出现的两个因素令人严重怀疑DIFC法院是否仍然可以作为承认仲裁裁决的“渠道管辖者”：

• 迪拜法院和DIFC法院的法庭（JT）的司法裁决。该法庭的目的是对DIFC法院和迪拜法院之间的管辖权和判决冲突进行裁定。该法庭作出了若干裁定，确认如果裁决债权人在DIFC法院启动寻求承认和执行裁决的程序，而裁决债务人在迪拜法院提起平行撤销程序，则迪拜法院和DIFC法院之间会产生管辖冲突。在这种情况下，该法庭会认定迪拜法院有权审理此案，且应将案件发回迪拜法院审理，并且DIFC法院应停止审理该案件。

• 迪拜一审法院（CFI）在 BanyanTree Corporate Pte Ltd. v Meydan Group LLC, Case No. 1619 of 2016案中裁定。迪拜一审法院的裁定事实上想让DIFC法院对Banyan Tree 案裁定无效，理由是迪拜国际金融中心法院对境内的迪拜实体公司进行强制执行超出了其“特殊”管辖权范围，侵犯了迪拜法院的管辖权。因此，DIFC法院的裁定应该被取消并且无效。

临时措施

 “DIFC仲裁法”规定仲裁庭可以采取临时措施，而阿联酋法律则无此规定。例如，仲裁地为DIFC进行仲裁的当事人可以申请禁令性救济，如费用担保。此外，在DIFC仲裁，DIFC法院可以采取与DIFC诉讼案件相同方式提供临时救济。然而，鉴于迪拜国际金融中心法院将其范围扩大到DIFC以外一直到迪拜大陆（鉴于DIFC是迪拜司法系统的一部分），这在迪拜大陆的仲裁程序也应该可以实现。阿联酋法院可以给予临时救济支持仲裁，但不如DIFC法院提供的复杂和多样。

DIAC在DIFC开设了一个办事处，并正在修改其规则，根据该规则，默认的仲裁地将是DIFC。允许同意适用DIAC规则的当事人同时：

• 选择DIFC作为仲裁地。

• 向DIFC法院申请临时补救，以支持其仲裁并执行裁决。

保密性

DIFC仲裁法规定仲裁程序是保密的。根据阿联酋法律，诉讼程序不会被默认为保密（除了在相关规则中规定保密的机构仲裁进行的仲裁）。因此，希望其仲裁程序保密的当事人应确保在将保密性作为仲裁协议或者审理范围书的条款。

成  本

DIFC适用普通法的法律服务计费方法（即，败诉方通常被责令支付胜诉方的部分或全部法律费用）。相比之下，阿联酋的法律并不赋予仲裁庭主动裁决法律费用的权力。迪拜法院最近裁定，DIAC规则并没有授权仲裁庭基于该仲裁规则裁定法律费用。因此，如果仲裁程序适用DIAC规则，那么仲裁协议或审理范围书应记录仲裁庭裁定法律费用的权力。

DIFC法院于2017年2月27日发布了2017年第1号实务指引（实务指引），确认其支持仲裁的立场。实务指引的主要目的是劝阻毫无依据地挑战仲裁裁决，令人沮丧的是法院以惩罚一方当事人的费用方式对挑战仲裁裁决进行处罚。“实务指引”并未赋予DIFC法院就费用裁定的任何权力，并且是对“DIFC法院规则”第38部分（涉及成本法令）的确认。

根据实务指引，DIFC法院可以命令一个挑战执行仲裁裁决的当事人将裁决裁定的金额作为担保支付给法院。实务指引还授权DIFC法院在一方当事人提出其他与仲裁有关的但是法院没有支持的申请（例如申请撤销仲裁裁决失败和申请仲裁员回避没有得以支持）的情况下裁决该方赔偿费用。

赔偿成本不同于基于标准裁决承担成本，因为赔偿成本允许主张更高的成本。因此，赔偿成本通常只在涉及不当行为情况下才会裁定。

虽然实务指引并没有根据“DIFC法院规则”第38条对法院的权力作出任何实质性的修改，但表明了DIFC法院的对仲裁友好的立场。

承认仲裁裁决

本地裁决

在阿联酋，并且在阿联酋法院申请执行之前，裁决必须得到法院的承认将其“转化”为法院判决。

承认程序给仲裁程序增添了复杂性，并增加了有关各方的时间和费用。仲裁程序中的败诉方通常会抵制在阿联酋法院的承认程序，并通过对批准申请进行抗辩寻求驳回申请。承认程序可能需要两年的时间，这取决于所涉问题的复杂程度以及败诉方是否坚决并决定用尽所有上诉程序。当上诉法院或最高上诉法院承认仲裁裁决后裁决才能得到承认和执行。

然而，历史上，承认和执行仲裁裁决程序问题很多。有些案件，阿联酋法院根据《民事诉讼法》第216（1）条规定的仲裁裁决无效而拒绝承认仲裁裁决。例如，在InternationalBechtel Co. Ltd. v Department of Civil Aviation of the Government of Dubai案中，迪拜最高法院（第503/2003号请求书，2005年5月15日判决）中，迪拜最高法院裁定撤销金额为2500万美元的仲裁裁决，原因是仲裁员未按照阿联酋法律规定的方式向证人作证的方式进行法庭审理。但是，尽管有Bechtel这样的裁定，但是阿联酋法院大体上采取了支持仲裁方式来承认和执行仲裁裁决。

如上所述，DIAC最近在DIFC设立了代表处。因此，由DIAC规则所管辖的仲裁争议的当事人将有进一步的选择，诉诸DIFC法院寻求承认和执行他们的裁决。这也意味着当事人可以选择向DIFC法院申请支持，包括在DIAC仲裁期间提交临时措施申请。

2016年9月21日，DIAC与DIFC争议解决机构签署了一项合作协议，为未来加快执行仲裁裁决铺平道路。

外国裁决

执行外国仲裁裁决在阿联酋和DIFC是相对简单的过程。外国仲裁裁决可以在DIFC内得到承认和执行（第42（1）条，DIFC仲裁法）。只能根据“DIFC仲裁法”第42条规定的理由（也就是“纽约公约”第五条规定）对外国裁决的执行进行质疑。

如上所述，即使裁决债务人的资产位于DIFC之外，DIFC法院也确认执行外国仲裁裁决的潜在管辖权。然而，DIFC法院作为“渠道管辖”已经受到质疑。在DIFC法院成功批准裁决的情况下，裁决债权人可以在迪拜法院执行DIFC认可的裁决。这使得选择DIFC批准仲裁裁决更具吸引力。

此外，阿联酋（和DIFC，作为迪拜法院系统的组成部分，DIFC法院）是“纽约公约”缔约国。“纽约公约”允许一方在签署“纽约公约”的国家执行外国仲裁裁决。因此，阿联酋法院应当强制执行外国仲裁裁决，除非提起不予执行申请的一方“纽约公约”第五条证明存在不予执行的有限理由。

阿联酋法院通常通过执行外国裁决来履行阿联酋“纽约公约”下的义务。然而，在非常罕见的情况下，阿联酋法院显示不愿根据“纽约公约”执行外国裁决。在Fluor v PetrixoOil & Gas案中，迪拜上诉法院于2016年3月30日作出裁定，拒绝执行仲裁地为伦敦由ICC仲裁院作出的外国裁决。法院认为没有提交证据证明英国签署和批准了“纽约公约”。这一裁定在阿联酋法律界引起轰动。然而，该裁定在上诉法院被驳回，并被推翻的原因是阿联酋法院受国际条约和“纽约公约”的约束。

现状和展望

作为阿联酋争议解决首选方案，仲裁的发展为在阿联酋进行仲裁的当事人提供了独特创新选择。阿联酋的三个法域均有一些独立的仲裁机构，每个仲裁机构都有自己的机构规则。就仲裁而言，各法域均有利弊。DIFC法院将其管辖范围扩大到DIFC之外和迪拜境内的最新举措确保顺利、迅速地批准和执行仲裁裁决。 DIAC入住DIFC及其指定的仲裁规则草案表明适用DIFC法律备受追捧，优势是可获得的临时救济措施、裁决批准和执行方面。但是，如果最终推出了备受期待的“联邦仲裁法”，这可能会使阿联酋和迪拜国际金融中心之间的竞争环境达到平衡，差别可以忽略不计。

（完）

Arbitrability

In addition to the “in writing” and “capacity” requirements, parties should consider whether the subject matter of any potential dispute can be referred to arbitration in the chosen seat of the arbitration.

Arbitration is not permissible in matters that are not capable of being reconciled (Article203(4), CPC). Matters of public order cannot be reconciled. There are also some specific areas where the UAE courts hold exclusive jurisdiction, such as incriminal matters and matters of personal statute. These matters cannot be referred to arbitration. Further, matters relating to commercial agency and labour disputes cannot be dealt with by arbitration.

The issue of arbitrability must also be considered in light of some decisions of the Dubai Court of Cassation, which held that some matters relating to off-plan realestate transactions are of a public order nature and therefore not capable ofresolution by arbitration. Public order is deemed to include matters relatingto, among others, personal status such as marriage, inheritance and lineage,systems of government, freedom of trade, the circulation of wealth, rules ofindividual ownership and the other rules and foundations on which society isbased, to the extent that these matters do not conflict with the definitiveprovisions and fundamental principles of the Islamic Sharia (Article 3, UAECivil Transactions Law).

In this respect,in 2012, the Court of Cassation overturned an arbitration award on the basis ofpublic order considerations under Article 3 of the UAE Civil Transactions Law(Case No. 180/2011 of 12 February 2012). The arbitration award declared thatthe sale and purchase agreement for an off-plan property purchase was null andvoid on the basis that the agreement violated Article 3 of Law No. 13 of 2008Regulating the Interim Real Estate Register in Dubai (Law No. 13 of 2008).Article 3 provides for the mandatory registration of any sale and purchase ofoff-plan properties in Dubai in the Interim Real Estate Register through theDubai Land Department. The sale and purchase agreement was not registered. TheCourt of Cassation overturned the arbitration award on the basis that thearbitrator did not have the power to adjudicate on a matter relating toregistration of off-plan property, as this was a public order matter underArticle 3 of the UAE Civil Transaction Law.

Following thisdecision, there were fears that the UAE courts may find any real estatecontract to be void for violating public order. However, this decision and thepublic policy exemption it relates to is recognised as being limited to casesinvolving specific issues (in this case the particular provision requiring theregistration of off-plan transactions with the Dubai Land Department), asopposed to all real estate matters.

 

The DIFCArbitration Law does not explicitly state that certain disputes arenon-arbitral. However, as the DIFC Arbitration Law only covers civil andcommercial matters, it is inferred that the scope of arbitrability within theDIFC does not extend to criminal and family matters. The DIFC Arbitration Lawstates that consumer contracts and employment disputes can only be arbitratedif, among other things, consent is given by the employee or consumer after thedispute has arisen. The public policy considerations set out in Article 3 ofthe UAE Civil Transactions Law are likely to apply in the DIFC. The DIFC formspart of the Emirate of Dubai, so it is expected to follow the same principlesand rules of public order that are designed to fulfill the public, political,social or economic interests of the UAE that are related to the highergovernance of society.

LIABILITY OF ARBITRATORS

On 18 September2016, Federal Law Decree No. 7 was issued, amending certain provisions of thePenal Code. The key amendment that attracted wide attention and commentary isArticle 257, which was previously directed only at court-appointed experts andtranslators. This new amendment now exposes arbitrators to the risk oftemporary imprisonment if they are found to be acting contrary to their duty offairness and impartiality.

Article 257applies to all arbitrators conducting arbitrations, whether in mainland Dubaior offshore. This is reflected in the broad wording of Article 257, whichrefers to any arbitrator appointed by the court, an administrative body (forexample, the DIAC or the DIFC-LCIA) or elected by the parties.

It remains to beseen how this new and unexpected amendment will be applied. There isuncertainty as to how the public prosecutor will deal with allegations advancedon the basis of the newly amended Article 257. To this end, it should be notedthat proving criminal intent in the context of lack of impartiality iscumbersome. The public prosecutor will only refer a potential claim to thecriminal court if there is conclusive evidence that a crime has been committed.

It is alsounclear how existing or potential arbitrators will react to this new amendment.Some evidence suggests that arbitrators are becoming more reluctant to acceptnew mandates or continue with their arbitration mandates. However, it is worthnoting that retiring from existing appointments is not without risk. Article207(2) of the DIAC Rules provides an arbitrator who, after having accepted hisor her appointment, withdraws without good reason, may be held liable forcompensation. It is doubtful that a change in the law would be a good reason.

An arbitratorwho acts unfairly or is biased must face adverse inferences. An appropriatepenalty could be the termination of the arbitrator’s mandate or removal fromthe register of arbitration institutions. However, including temporaryimprisonment as a form of penalty in this case appears to be extreme and alsocontradicts existing international arbitration rules. For example, the DIFCArbitration Law and the regulations of the ADGM hold arbitrators liable forintentional wrongdoing, but do not go as far as exposing arbitrators totemporary imprisonment.

Given theuncertainties relating to the application of this new law, clarification wouldbe certainly welcomed by the arbitration community.

SEAT OF ARBITRATION

In mostjurisdictions, it is an accepted principle that the designated seat of arbitrationdetermines both the:

·  Law governing the arbitration agreement and the conductof the proceedings.

· Court that will have supervisory jurisdiction over the arbitration. This has caused conflicts in Dubai and Abu Dhabi, as both Emirateshave common law and civil law jurisdictions. In Dubai, this has led toconflicts concerning the applicable supervisory jurisdiction even where theseat is explicitly stated (see below).

In the DIFC Court of First Instance judgment in Amarjeet Singh Dhir v Waterfront PropertyInvestment Limited and Linarus FZE CFI 011/2009, Justice Hwang summarisedthe importance of accurately identifying the seat of arbitration as follows: “Themoral of this case is that, if parties want the DIFC Arbitration Law to applyand the DIFC Court to have jurisdiction over an arbitration, they shouldexpressly select the DIFC as the seat in their arbitration agreement“. Thewords “Emirate of Dubai” were not sufficiently precise to identify theDIFC as the seat. It is therefore advisable for contracting parties to agree inadvance to the jurisdiction of either the DIFC courts or the local Dubai courtsas their preferred option as the supervisory court of arbitration. Contractingparties need to understand the advantages and disadvantages of seating anarbitration under the UAE legal regime as opposed to the DIFC legal regime.Arguably, seating an arbitration in the DIFC is more advantageous, as the DIFCArbitration Law will apply to the arbitration. The DIFC Arbitration Lawprovides for a modern and comprehensive framework for arbitration proceedings,as opposed to the CPC’s more limited provisions that apply to an arbitrationseated in the UAE (outside the ADGM).

Conflicts ofjurisdiction between the DIFC courts and the Dubai courts

Conflicts ofjurisdiction between the DIFC and Dubai Courts often arise in cases dealingwith the enforcement of domestic and foreign arbitral awards. In a number ofrecent judgments, most notably the decisions in the Banyan Tree cases,the DIFC courts confirmed that DIFC law allows the DIFC courts to be used as a“conduit jurisdiction” for the purposes of enforcing both foreign and domesticarbitral awards, as well as foreign court judgments, against award/judgmentdebtors located in onshore Dubai, even where the award/judgment debtor has noconnection with the DIFC.

Two recentfactors have cast serious doubts on whether the DIFC courts can still be usedas a conduit jurisdiction for the recognition of arbitral awards:

• Decisions fromthe Judicial Tribunal for the Dubai courts and the DIFC courts (JT).The purpose ofthe JT is to rule on conflicts of jurisdiction and conflicts of judgmentsbetween the DIFC courts and the Dubai courts. The JT has issued a number ofdecisions confirming that where an award creditor initiates proceedings in theDIFC courts seeking recognition and enforcement of an award and the awarddebtor brings parallel annulment proceedings before the Dubai courts, aconflict of jurisdiction arises between the Dubai courts and the DIFC courts.In these circumstances, the JT has determined that the Dubai courts arecompetent to entertain the case, that the case should be remitted for trial tothe Dubai courts and that the DIFC courts should cease from entertaining thecase-

• Dubai Court ofFirst Instance (CFI) decision in Banyan Tree Corporate Pte Ltd. vMeydan Group LLC, Case No. 1619 of 2016. The DubaiCFI decision effectively seeks to nullify the DIFC courts’ decisions in BanyanTree on the grounds that, the DIFC courts in ruling to enforce againstan onshore Dubai based entity, had exceeded their “exceptional” jurisdiction,encroaching on that of the Dubai courts. The DIFC courts’ decisions shouldtherefore be cancelled and rendered void.

Interim remedies

The DIFCArbitration Law enables the tribunal to order a range of interim remedies thatare not available in arbitrations seated in the UAE. For example, a party in anarbitration seated in the DIFC can apply for injunctive relief such as securityof costs. Additionally, in DIFC seated arbitrations, the DIFC courts can issueinterim relief in the same manner as it would in cases in the DIFC courts.However, this should also be achievable for arbitration proceedings seated inmainland Dubai, in light of the latest position adopted by the DIFC courtsextending its scope beyond the DIFC to mainland Dubai (given that the DIFCforms part of the Dubai judicial system). The UAE courts can grant interimreliefs in support of arbitration, but these are not as sophisticated andvaried as those available before the DIFC courts.

The DIAC openedan office in the DIFC and is in the process of amending its Rules, under whichthe default seat of arbitration will be the DIFC. This move will permit partieswho agreed to apply the DIAC Rules to both:

·       Seat their arbitration in the DIFC.

·      Apply to the DIFC courts for interim remedies in support of their arbitrations and to enforce their awards.

Confidentiality

The DIFCArbitration Law provides that proceedings are confidential. Under UAE law,proceedings are not by default considered to be confidential (apart frominstitutional arbitrations where confidentiality is provided for in therespective rules). Therefore, parties that want their proceedings to beconfidential should ensure that confidentiality is explicitly stated as acondition applicable to the proceedings in the arbitration agreement or termsof reference.

Costs

In the DIFC, thecommon law approach to legal costs applies (that is, the losing party isusually ordered to pay some or all of the successful party’s legal costs). Incontrast, UAE law does not empower the arbitral tribunal to award legal costsfrom its own motion. The Dubai courts recently ruled that the DIAC rules do notempower a tribunal operating under the auspices of those rules to award legalcosts. Therefore, where arbitration proceedings are subject to the DIAC rules,it is important for the parties to record in the arbitration agreement or theterms of reference the arbitral tribunal’s power to award legal costs.

The DIFC courtsconfirmed their pro-arbitration stance with the issuance of Practice DirectionNo. 1 of 2017 (Practice Direction) on 27 February 2017. The primary purpose ofthe Practice Direction is to discourage unmeritorious challenges to arbitralawards. The discouragement comes in the form of the courts power to penalise aparty with cost sanctions for challenging an arbitration award. The PracticeDirection does not provide the DIFC courts with any new powers with respect tothe award of costs and is a confirmation of Part 38 of the DIFC Court Rules,which deals with cost orders.

Under thePractice Direction, the DIFC courts can order a party challenging theratification of an arbitral award to pay the amount of the award into court as security.The Practice Direction also empowers the DIFC courts to award indemnity costswhere a party brings other unsuccessful applications relating to thearbitration (such as unsuccessful applications for setting aside arbitralawards and unmeritorious challenges to remove arbitrators).

Indemnity costsdiffer with costs awarded on a standard basis, as indemnity costs allow for therecovery of a higher amount of costs. Accordingly, indemnity costs areordinarily only awarded in circumstances involving misconduct.

While thePractice Direction does not introduce any substantive amendments to the courts’powers under Part 38 of the DIFC Court Rules, its issuance is a reminder of theDIFC courts’ pro-arbitration stance.

RATIFICATION OF ARBITRAL AWARDS

Local awards

In the UAE, anaward must be ratified by the courts and “converted” into a court judgment,before the successful party can seek to execute and enforce it in the UAEagainst the losing party.

The ratificationprocess adds another layer of complexity to arbitration proceedings, and addsto time and expense for the parties involved. The unsuccessful party in thearbitral proceedings usually resists the ratification application in the UAEcourts and seeks to have the application annulled by submitting a defence tothe action for ratification. The ratification procedure can take up to twoyears, depending on the complexity of the issues involved and whether theunsuccessful party remains resolute and decides to exhaust all avenues ofappeal. An award can only be recognised and enforced when the Court of Appealor Court of Cassation has ratified it.

However,historically, the process of ratifying and enforcing a final arbitral award wasproblematic. In some cases, the UAE courts refused to ratify awards based onthe grounds for annulment of arbitration awards in Article 216(1) of the CPC.For example, in International Bechtel Co. Ltd. v Department of Civil Aviationof the Government of Dubai, Dubai Court of Cassation, Petition No. 503/2003(judgment dated 15 May 2005), the Dubai Court of Cassation ruled that a US$25million arbitral award in favour of the claimant should be set aside on thegrounds that the arbitrator had failed to swear in witnesses in the mannerprescribed by UAE law for court hearings. However, despite decisions likeBechtel, the UAE courts on the whole adopt a pro-arbitration approach toratification and enforcement.

As stated above,the DIAC recently opened a representative office in the DIFC. Accordingly,parties to arbitration disputes governed by the DIAC Rules will have thefurther option of resorting to the DIFC courts to seek recognition andenforcement of their awards. This also means that parties have the choice ofapplying to the DIFC courts for support, including filing applications forinterim remedies during a DIAC arbitration.

On 21 September2016, the DIAC and the Dispute Resolution Authority in the DIFC signed aco-operation agreement that paves the way for faster enforcement of arbitralawards in the future.

Foreign awards

Enforcingforeign arbitration awards is a relatively straightforward process both in theUAE and the DIFC. Foreign arbitral awards can be recognised and enforced withinthe DIFC (Article 42(1), DIFC Arbitration Law). An order for recognition canonly be challenged under the grounds set out in Article 42 of the DIFCArbitration Law, which mirror the defences to enforcement found in Article V ofthe New York Convention.

As outlinedabove, the DIFC courts confirmed their role as a potential conduit jurisdictionfor the enforcement of foreign arbitral awards, even if the award debtor’sassets are located outside of the DIFC. However, the use of the DIFC courts asa conduit jurisdiction has been brought into doubt. Where the DIFC courtssuccessful ratify an award , the award creditor can execute the DIFC-recognisedaward before the Dubai courts. This makes the DIFC an even more attractiveoption for ratification.

Additionally,the UAE (and the DIFC, as constitutionally the DIFC courts form part of theDubai court system) is a signatory to the New York Convention. The New YorkConvention allows a party to enforce an arbitral award made in one country inanother country that is a signatory to the New York Convention. Accordingly,the UAE courts should enforce foreign arbitral awards unless the limitedgrounds to resist enforcement in the New York Convention have been proved bythe party seeking to resist an enforcement application (Article V, New YorkConvention).

The UAE courtshave generally confirmed the UAE’s obligations under the New York Convention byenforcing foreign awards. However, on very rare occasions, the UAE courts haveshown reluctance to enforce foreign awards under the New York Convention. In ajudgment of 30 March 2016 in the case of Fluor v Petrixo Oil & Gas,the Dubai Court of Appeal refused to enforce a foreign award that was issued inan ICC International Court of Arbitration proceeding with a London seat. Thecourt reasoned that no evidence had been submitted to establish that the UK hadsigned and ratified the New York Convention. This decision shocked the UAElegal community. However, this decision was appealed to the Court of Cassationand has been overturned on the basis that the UAE courts are bound byinternational treaties and the New York Convention.

CURRENT CLIMATE AND FUTURE OUTLOOK

The growth ofarbitration as the preferred choice of dispute resolution in the UAE hasresulted in a unique blend of innovative options available to thosecontemplating arbitration in the UAE. The UAE’s three legal systems offer anumber of separate arbitral institutions, each with their own institutionalrules. There are pros and cons associated with seating an arbitration in eachjurisdiction. The DIFC courts’ latest move in extending their jurisdictionbeyond the DIFC and within Dubai eases a number of concerns in terms ofensuring a smooth and swift ratification and execution process. The DIAC’s moveinto the DIFC and its proposed draft Rules are a signal that the applicable lawof the DIFC is much sought after, particularly with regard to the availabilityof interim remedies, ratification and enforcement. However, if the muchanticipated Federal Arbitration Law is finally introduced, this may level theplaying field between arbitrations seated in the UAE and the DIFC, and make any difference negligible.