When negotiating a contract and seeking to agree which court or arbitral centre will have exclusive jurisdiction to resolve any dispute that might arise, there are a number of factors to consider. One of those is the speed with which a claim can be resolved, including whether a particular forum offers an expedited process or any other features which might help parties obtain an award faster than another forum.
In this three-part series of articles, we consider Dubai’s three main dispute resolution forums, namely the Dubai Courts, the Courts of the Dubai International Financial Centre (DIFC Courts) and the Dubai International Arbitration Centre (DIAC), to consider how they may assist parties in this regard.
Part 3 of 3: DIAC
In this third article we look at the expedited procedures and features available when disputes are referred to arbitration under the arbitration rules of the DIAC.
With the abolishment of the DIFC Arbitration Institute and Dubai Maritime Arbitration Centre in September 2021, the Dubai government streamlined the various arbitration centres in Dubai and focussed its efforts on enhancing the DIAC’s reputation as the go-to arbitration centre for the region. In March 2022, the DIAC revised its outdated arbitration rules to align its procedures with other global arbitration hubs. This revision included some of the expedited features mentioned here.
Expedited arbitral proceedings
The DIAC rules now contain an expedited arbitral procedure which will apply:
- if the parties entered into their arbitration agreement after 21 March 2022, and
- the claim is for damages of AED 1 million or less (excluding interest and legal costs).
The rules provide for the swift appointment of the arbitrator within 5 days of the DIAC Arbitration Court deciding it is satisfied that the criteria for expedited proceedings have been met.
The rules anticipate that an arbitral award will be issued within 3 months from the date the file was sent to the tribunal, as compared to 6 months under the standard procedure. This is also a shorter timescale than the accelerated process under other arbitral rules such as the ICC, HKIAC and SIAC, which are all 6 months.
The rules do not impose specific procedures within the expedited process and, instead, the tribunal has authority to limit the scope of any evidence to be submitted. The arbitrator is required to consider the ability of the parties to present their respective cases and, after consultation with them, decide on the expedited procedure to be adopted in the arbitration.
A 3-month arbitration is likely to be suitable for only the most straightforward claims and, therefore, the Tribunal has the flexibility to extend this time limit if necessary. We will see how this is treated in practice. If a respondent’s right to be heard is unreasonably restricted, this may put the award at risk of being nullified during subsequent enforcement proceedings. Accordingly, arbitrators will have to balance how strictly they apply this 3-month deadline against whether the parties have had the opportunity to present their case adequately.
Emergency arbitrator
After a dispute arises, there may be circumstances where a party needs to obtain urgent interim relief at the outset of the arbitration. In practice, waiting for the tribunal to be formed can take a number of weeks or even months, during which time the respondent may take or continue taking action that causes harm to the claimant or prejudices the anticipated arbitral process.
The DIAC rules now include a procedure for appointing an emergency arbitrator with the power to deal with applications for immediate interim relief before the tribunal is formally appointed. The application can be filed by the claimant alongside its Request for Arbitration and, if accepted by the DIAC Arbitration Court, the DIAC will appoint the emergency arbitrator within 24 hours.
Whilst the emergency arbitrator procedure does not expedite the overall arbitration process, which will still be subject to the appointment of a permanent tribunal, it is an expedited procedure that can, amongst other things, help protect a party against imminent or further harm at the outset of an arbitration.
Virtual hearings
The flexibility and consensual nature of arbitration has always lent itself well to holding preliminary meeting and other interactions between the parties’ lawyers and the tribunal by virtual means. Following the impact of Covid-19 on travel, however, this naturally led to the use of technology for substantive hearings when the various individuals involved could not travel to Dubai. Today, even without travel restrictions in place, DIAC tribunals continue to encourage virtual hearings, safe in the knowledge that the new DIAC rules (together with the UAE’s Federal Arbitration Law 6 of 2018) give comfort that this will not jeopardise the enforceability of the arbitration award. This expedites the proceedings by allowing hearings to be organised more quickly and on shorter notice especially in cases where the tribunal members, representatives and witnesses might be located in different places across the globe.
Adverse costs
In contrast with the Dubai Courts, and similar to the DIFC Courts, the new DIAC rules empower a tribunal to award the successful party the costs of and occasioned by the proceedings, including legal costs and expert fees. This can act as a deterrent for any respondent considering employing any unscrupulous tactics to unreasonably delay the proceedings.
Flexibility
Arbitration will not necessarily always be quicker than litigation and this will often depend on the nature of the dispute. A fundamental feature of arbitration, however, is the procedural flexibility that it offers compared to the usually more rigid process offered by the courts.
In turn, this gives more scope for the parties to agree a shortened procedural timetable that suits the case. For example, the tribunal may suggest it is more appropriate for the parties to serve their witness evidence at the same time as their written pleadings or have a shorter period between written submissions. In other cases, the parties might agree to dispense with a formal document production process, expert evidence, witness statements and/or a final hearing and simply allow the tribunal to make an award based on the written submissions and documents relied on by the parties. In such cases, an arbitration can be as quick as 4-6 months.
Conclusion
Among any court or arbitral centre’s principles is the aim to deal with cases expeditiously. The three main dispute resolution forums in Dubai are no different and there is a continued drive in Dubai towards faster dispute resolution.
Whilst we have covered some features here for the DIAC you can also refer to our earlier articles which consider the expedited features in the Dubai Courts and the DIFC Courts.
With different procedures on offer in different forums, there is no one-size-fits-all solution. It is therefore important for parties to take proper advice and give full consideration to the dispute resolution provisions at an early stage. Whilst these clauses often appear at the bottom of a contract, they should be towards the top of the priority list in any contract negotiation.
