Issued on 14 September 2021 and in force as of 20 September 2021, the Decree aims to enhance and testify to the Emirate’s efficiency of alternative dispute resolution methods (arbitration and mediation). It comprises another step towards streamlining the local and international commercial arbitration landscape in Dubai.

So what has changed?

The changes induced by this new Decree can be categorized into two main sets: the first set being the structural changes to the Dubai International Arbitration Center (“DIAC”) and to other arbitration centers, present and operating in Dubai and second being the fundamental changes to the rules and arbitration process the Decree brings forward.

First Set: Structural Changes

The Decree stipulates major structural changes that are two-fold: those relating to the organizational structure of DIAC and others pertaining to the abolishment of existing other arbitration centers in Dubai:

A.    New Organizational Structure of DIAC:

The Decree references a new organizational structure of DIAC. The center now has three different bodies:

1. The Board of Directors comprises 9 members (maximum number of members including the Chairman and his deputy) appointed by a resolution from the Ruler. The Board shall be entrusted with the general supervision and management of DIAC. But a noticeable capacity/task granted to the Board is the setting the requirements and rules for ‘arbitration funders’ (can be also referred to as “third party funding”).
2. The Arbitral Court consists of 13 members appointed by the Board of Directors. The Court shall be entrusted with the general supervision and management of alternative dispute resolution methods offered by DIAC. 
3. The Administrative Unit, under the supervision of its Executive Director, shall be entrusted with providing all types of administrative support required by the Arbitral Court.

B.    Abolishment of Arbitration Centers:

The Decree abolishes two important arbitration centers (the “Abolished Centers”) in Dubai. These are the Emirates Maritime Arbitration Center (“EMAC”, established in 2016) and the Dubai International Financial Center Arbitration Institute (“DAI”, established in 2004); which happens to also be the administering body of the arbitration center set up by the DIFC and the London Court of International Arbitration (“DIFC-LCIA”).

In other words, the Decree consolidates all arbitration centers operating in Dubai under one umbrella: DIAC. This means that all of DIA and EMAC’s real estate, assets, equipment, fund allocations, rights, obligations and potentially even employees are to be transferred to DIAC as per the new Decree.

It is worth noting here though that DIAC has been granted a grace period of six (6) months to replace both EMAC and DIA 

Second Set: Procedural Changes

Despite the importance of this new Decree and the change/enhancement it bears, a lot of uncertainty exists in the number of questions that can be raised and the implications that this Decree may have that are not yet clear to the legal community, businesses, and arbitrators. However, here are the major changes the Decree brings on the procedural front:

1. Pending arbitration cases before the Abolished Centers: The Decree stipulates that all arbitration cases pending before EMAC and DIA will be administered by DIAC, unless the parties agree otherwise (art. 6). In other words, an arbitration case currently pending under the DIFC-LCIA center and rules, will remain subject to the same rules but will be administered by DIAC.
2.  Agreements referring disputes to DIFC-LCIA or EMAC: The Decree stipulates that any agreement, with an arbitration clause referring to the DIFC-LCIA or the EMAC, remains valid. Should the arbitration process be initiated in the future, it will automatically be under DIAC since it replaced DIFC-LCIA and EMAC. 
3. Seat of Arbitration: The Decree introduced important changes to the seat of arbitration: (a) In the event the parties have selected the Emirate of Dubai as the seat of arbitration, it is deemed that the provisions of the UAE Arbitration Law (Federal Law No. 6 of 2018) shall govern the arbitration agreement, procedures, and award. Hence, the Dubai Courts have jurisdiction over any case, request or challenge concerning the arbitration procedure or award issued by the DIAC Arbitral Tribunal; (b) In the event the parties have selected the DIFC as the seat of arbitration, it is deemed that the provisions of the DIFC Arbitration Law (Law No. 1 of 2008) shall govern the arbitration agreement, procedures, and award. Hence, the DIFC Courts will have jurisdiction over any case, request or challenge concerning the arbitration procedure or award issued by the DIAC Arbitral Tribunal; (c) In the event the parties have failed to agree on or specify the seat of arbitration in their agreement, it is deemed that the DIFC is the default seat of arbitration.

In conclusion

The changes introduced bear a lot of uncertainties and raise a lot of questions. Hence, the legal community will be monitoring the scene and keeping a close watch on the related arbitration centers to shed more light on the changes, during the transition period (the upcoming 6 months).