First Insight – The New UAE Federal Arbitration Law And The Future For UAE-Seated Arbitration

On 3 May 2018, HH Sheikh Khalifa bin Zayed Al Nahyan, the President of the United Arab Emirates, issued Federal Law No. 6 of 2018 promulgating the country's much anticipated new Federal Arbitration Law (the "New Law"). The New Law, which is heavily based on the UNCITRAL Model Law on International Commercial Arbitration, will replace and supersede Articles 203 to 218 of the Civil Procedures Code (Federal Law No. 11 of 1992 (as amended)) which currently govern arbitrations seated onshore in the UAE (the "Civil Procedure Code"). The New Law applies to any arbitration conducted in the UAE, unless the parties have agreed that another law should apply, (Article 2) and to ongoing arbitration proceedings, even if the arbitration agreement was concluded before the Law came into effect (Article 59).

The New Law will take affect one month after its date of publication in the Official Gazette. This article highlights some of the most significant developments and identifies key similarities and differences between the New Law and the UNCITRAL Model Law on which it is based.

SIGNIFICANT DEVELOPMENTS

Arbitration Agreement

The New Law confirms the current requirement that an agreement to arbitrate must be in writing. However, consistent with the UNCITRAL Model Law, Article 7 expressly provides that the arbitration agreement may be made by an exchange of communications, including by modern methods of electronic messaging such as email. Article 5 also provides that the agreement to arbitrate may be entered into before or after a dispute has arisen, in a separate document, or incorporated by reference. Pursuant to Article 4(1), in order to be valid, the arbitration agreement must be entered into by a natural person who has legal capacity to dispose of his rights or, on behalf of a company, by a representative with specific authority to arbitrate. Whilst it would appear from Article 53(c) that the law governing a representative's capacity will be the law applicable to that particular company, this is by no means clear. Accordingly, we would continue to advise companies entering into arbitration agreements that are subject to the New Law, to execute a power of attorney expressly granting the signatory the authority to enter into the arbitration agreement. Article 6 of the New Law now confirms that the agreement to arbitrate is severable and will be treated as an agreement independent of the other terms of the contract, irrespective of whether the main contract...