3 Key Changes to the UAE Arbitration Law
The amendments to the UAE Arbitration Law (Federal Law No. 6 of 2018), introduced by the new Law (Federal Decree by Law No. 15 of 2023), can be divided into three main topics:
- First: the introduction of technology
- Second: the enhanced powers of the arbitral tribunal
- Third: special conditions on the appointment of arbitrators
First: Arbitration Procedures and Technology:
One of the significant amendments introduced by the new Law is the introduction of technology into the arbitration procedures. Parties to arbitration can now agree on the seat of arbitration in reality or "virtually through means of modern technology or in technical environments".
This ability extends to the Arbitral Tribunal in the absence of such agreement by the parties. As a consequence, Arbitration Institutions will be responsible to provide the necessary technologies to carry out the arbitration proceedings.
This change enhances the efficiency of the Arbitration Law by allowing parties to use online platforms for their disputes resolution; especially when either party is not able to attend physically the hearings. Yet, two main concerns may be raised as a result:
- The first concern relates to cybersecurity. The use of technology may pose risks and may jeopardize the security and confidentiality of the proceedings and awards if not properly protected. Arbitration Institutions will be required to ensure that such technological means are secure, safe, and reliable.
- The second concern relates to the enforcement of arbitral awards issued virtually or through the use of modern technology means. Will an "e-award" have the same legal force as the normal arbitral award?
Second: Enhanced Powers of the Arbitral Tribunal:
The Arbitral Tribunal has been discretionary powers to determine the procedures to be followed (Art. 23) and/or the rules of evidence to be followed (Art. 33), in the absence of such agreement by the parties. The only condition or limitation to such powers is that the rules selected by the Tribunal should not prejudice public order. In this regard, its powers extend to:
- Determining the level of admissibility of the evidence submitted by the parties and the time, manner, and form of exchange of such evidence between the parties.
- Decide whether to hold oral hearings for the submission of evidence, and the appropriate stage of the proceedings to hold such hearings.
Third: Special Conditions for the Appointment of Arbitrators:
The Arbitration Law prohibits, in principal, the appointment of an arbitrator, who is at the same time a member of the board of trustees, executive management, or administrative body of the Arbitration Institution responsible for the administration of the arbitration case.
However, a new article has been introduced (Article 10 BIS) setting out the conditions which allow the appointment of such an arbitrator. These conditions are:
- The rules of the Arbitration Institution shall not prohibit such appointment and shall ensure the segregation of duties and impartiality to prevent any conflict of interest.
- The arbitrator shall not be a member or the president of the arbitral tribunal.
- The arbitrator shall undertake in written to refrain from exploiting his capacities and from participating, deliberating, perusing, voting, attending meetings, or influencing in any way the proceedings of arbitration during the period of his appointment as arbitrator.
- A safe reporting mechanism on the violations committed shall be provided by the Arbitration Institution.
If these conditions are not fulfilled or violated, this may result in the invalidity of the Arbitral Award as well as the parties being incapable of claiming civil damages against the Institution and Arbitrator.