“DIAC’s ultimate goal is to provide an equitable forum for dispute resolution that serves businesses of all sizes, sectors and industries”

Q: Could you please share information about DIAC’s New Arbitration Rules? What are the key novelties?

A: The DIAC Arbitration Rules 2022 came into effect on 21st March 2022, replacing the pre-ex- isting 2007 Arbitration Rules. These rules aim at enhancing efficiency and flexibility while applying international best practices to DIAC‘s arbitration procedures. Some key changes include:

• Emergency Arbitration Procedures: The updated rules provide parties with a mechanism to apply for emergency interim relief before the arbitral tribunal is constituted.
• Consolidation and Joinder: The rules now permit a party to combine multiple claims into one arbitration and third parties can be joined to ongoing arbitrations.
• Technology and Innovation: DIAC is committed to using and integrating technology into its processes and therefore, has incorporated provisions in the rules to facilitate electronic communication and document submission. Moreover, the tribunalnow can decide whether to hold virtual meetings and hearings.
• Third-party Funding: The 2022 rules expressly allow third-party funding. However, parties utilizing financial support provided through third-party funding must disclose the identity of the funder, and any commitment the funder has made regarding adverse cost liability.
• Expedited Procedures: The rules introduce a fasttrack process where the tribunal must issue the final award within three months. This applies if the claim is AED 1,000,000 or less, if parties agree in writing, in cases of urgent need approved by the Arbitration Court, or when deemed suitable by the Arbitration Court based on circumstances.
• Legal Costs: Under the 2022 rules, DIAC tribunals are now able to award legal representatives’ fees and expenses as part of the costs of the arbitration.
• Seat of Arbitrations: According to the rules, if the agreement does not specify a seat of arbitration, the default seat will be Dubai International Financial Centre (DIFC).

Q: How many cases do you administer each year and what are the main sectors?

A: The average number of cases registered by the Centre annually over the past three years stands at 323. In 2022, DIAC registered 340 cases, up from 276 in 2021, reflecting a 23% increase and a 48% increase from 230 cases in 2020. Additionally, the total amount in dispute reached 11.2 billion dirhams compared to 1.9 billion dirhams in 2021, indicating significant year-over-year growth.

In terms of sectors, despite prevailing global economic challenges, the construction sector in the MEASA region has exhibited notable resilience. Consequently, it is not surprising that construction and real estate disputes constituted about 65% of the Centre's arbitration cases in 2022. The remaining caseload was distributed across various sectors, including commercial, oil and gas, maritime and others.

The forthcoming DIAC 2023 annual report will provide a thorough analysis, revealing an increase in the number of arbitration cases and covering an even broader spectrum of sectors and industries, showcasing the Centre’s ability to cater to a broadarray of arbitration needs across various economic sectors.

Q: What makes Dubai a preferred destination for arbitration in the MENA region orglobally?

A: Dubai’s growing prominence as a preferred seat for arbitration is evident from QMUL’s surveys, which ranked it 10th in international arbitration in 2021 and 7th in international energy arbitration in 2022. These rankings highlight Dubai’s appeal, not only within the MEASA region but also on a globalscale. This can be attributed to several factors:

• Modern Legislative Framework: The UAE’s Federal Arbitration Law (Law No. 6 of 2018), modeled on UNCITRAL, enhances the legal framework for arbitration, ensuring consistent and predictable outcomes. Amendments to the Federal Law, introduced in September last year, focus on streamlining arbitration in the UAE, emphasizing efficiency and flexibility. A significant update is the requirement for arbitral institutions to provide technology to facilitate virtual hearings. This reflects the growing trend of remote proceedings and ensures that parties can participate in hearings regardless of their physical location.
• World-Class Legal System: On the mainland, the civil law system applies, governed by the UAE Federal Arbitration Law (Law No. 6 of 2018) and its amendments. While DIFC operates under a common law framework, distinct from the mainland system. The DIFC has its own regulatory authorities and independent courts that operate in English and offer a modern, arbitration-friendly environment under its own Arbitration Law. This dual system allows parties involved incommercial transactions in Dubai the flexibility to choose between the civil law or common law system, enhancing Dubai’s attractiveness as a business and arbitration hub.
• Multicultural and Multilingual Expertise: Dubai is a vibrant, multicultural city home to more than 200 nationalities speaking over 140 languages. This diversity includes a wide range of legal professionals, arbitrators, and experts proficient invarious languages and sectors. Such a diverse pool of talent allows parties in arbitration to select arbitrators with the relevant expertise and language skills, facilitating effective dispute resolution.
• Strategic Location: Dubai’s strategic location at the intersection of Europe, Asia, and Africa ensures exceptional accessibility. With more than 2.5 billion people residing within a 4-hour flight and 5 billion within an 8-hour flight, the city’s central position makes convenient travel for international arbitrators, parties, and legal representatives, facilitating their participation in arbitration proceedings.
• Pro-Business Environment: Dubai’s favorable business environment and commitment to economic diversification have encouraged a rangeof multinational corporations, financial institutions, and international law firms to set up operations. With the surge in businesses, there is a heightened need for arbitration services and expertise in managing commercial disputes.

Q: Can you please share some of the recent initiatives DIAC has implemented to improve the arbitration Ecosystem?

A: DIAC has recently launched several initiatives aimed at strengthening the arbitration ecosystem. Among these initiatives:

• Trainings & Capacity Building: DIAC introduced a comprehensive 3-stage arbitration training program last year, attracting over 120 participants. This program is structured around DIAC Arbitration Rules and international best practices. Upon completion of all three stages, participants obtain a professional diploma in international arbitration. Additionally, DIAC conducted the region’s first training on Tech ADR in collaboration with Silicon Valley Arbitration & Mediation Center (SVAMC). To further support professional development, DIAC teamed up with the CIArb UAE branch to deliver a series of workshops focused on securing first ap-pointments as arbitrators, tribunal secretaries, and experts. Designed for aspiring lawyers and experts, these workshops aimed to foster the growth of the next generation of arbitration professionals.
• Arbitration Court: Decree 34 of 2021 marked a significant development for DIAC by establishing an arbitration court. In line with international best practices, the DIAC Arbitration Court’s function includes award scrutiny to ensure quality and enforceability of awards prior to their issuance. This major advancement has positioned DIAC as a pioneer in the region and set a benchmark in arbitration practice. The Arbitration Court is presided over by Dr. Michael Pryles AO PBM as President and Erin Miller Rankin as Vice-President. The other 11 members of the Arbitration Court are Abdulwahid Alulama, Prof. Albert Jan van den Berg, Prof. Emilia Onyema, Dr. Hassan Arab, Hiroo Advani, Ilya Nikiforov, Mohammed Rasheed Al Suwaidi, Ning Fei, Dr. Rouven Bodenheimer, Rupert Reed KC, and Wendy Miles KC.
• Partnerships and Collaborations: Over the past year, DIAC has signed 11 memorandums of understanding with key organizations, including HKIAC, AAA-ICDR, CIETAC, SVAMC, and IAMC. These agreements reflect our commitment to fostering international cooperation and enhancing the global arbitration landscape. Moreover, through our strategic partnership with Dubai Courts, we have significantly strengthened our alliance, which includes providing training for their judges on DIAC’s 2022 arbitration rules and procedures.
• Diversity and Inclusion: DIAC is committed to promoting diversity and gender equality within arbitration. In 2023, the Arbitration Court achieved near parity in the selection of women arbitrators, underscoring our steadfast commitment to gender diversity and equal opportunity. More details will be available in our upcoming annual report for 2023. In addition to gender diversity, the Arbitration Court itself is a model of inclusivity, with 13 members representing 11 different nationalities. This diverse composition ensures a broad range of perspectives and expertise in the arbitration process. DIAC’s commitment to diversity extends to our workforce as well. Over 60% of our employees are women, and our team of 19 staff members hails from 14 different countries, speaking 16 languages. This multicultural environment fosters a rich exchange of ideas and enhances our ability to serve an international clientele effectively.
• Fostering Connections and Community Engagement: DIAC actively supports the development of arbitration awareness and networks by hosting international conferences, seminars and forums that contribute to knowledge sharing and promote arbitration. Last year, we hosted the 22nd International Congress of Maritime Arbitrators (ICMA) in Dubai, making it the first Middle Eastern city to host ICMA since its inception in 1972. We also hosted the Inter-Pacific Bar Association (IPBA) Annual Meeting and Conference in Dubai.

Notably, DIAC has been leading the Dubai Arbitration Week (DAW) for the past three years, which continues to grow significantly. Last year, we assisted the DAW Organizing Committee in coordinating over 100 events attended by more than 1,000 delegates, making it one of the largest arbitration weeks globally. These initiatives cultivate a more robust and reliable arbitration ecosystem that meets the evolving needs of businesses worldwide. DIAC aims to reinforce confidence in arbitration as a fair, transparent, and effective method of dispute resolution. Ourcommitment is to create an environment where arbitration not only resolves disputes efficiently but also serves as a trusted pillar in the global marketplace.

Q: How popular and successful is mediation in the UAE? Does your arbitral institution offer mediation services?

A: Mediation in the UAE is gaining popularity and achieving notable progress, thanks to supportive legal frameworks, institutional backing, and cultural alignment. In recent years, the UAE has made significant strides in promoting mediation as a viable and effective means of resolving disputes. This trend is expected to continue as the UAE further integrates mediation into its legal and business environments, establishing it as a practical and efficient alternative to litigation.

As a result, many businesses are now incorporating mediation clauses into their contracts, recognizing its potential to resolve disputes without lengthy court battles. This proactive approach not only helps maintain business relationships and minimize disruptions but also supports mediation’s growing role as a crucial component of the UAE’s evolving dispute resolution landscape. In October of last year, DIAC launched its first set of mediation rules, marking a significant milestone in the development of mediation practices in the region. Within a month of the launch, the Centre succeeded in registering its first mediation case, reflecting the increasing interest in mediation within the UAE. The rules provide a well-structured and comprehensive framework for mediation. They also set clear and swift time limits to ensure efficiency. Parties can refer a dispute to mediation under these rules, regardless of whether they have a pre-existing agreement to mediate.

Looking ahead, DIAC plans to further support the growth of mediation by launching a series of training programs. These initiatives will aim to equip legal professionals, mediators and stake holders with the skills and knowledge necessary to effectively utilize mediation and foster adeeper understanding of the mediation process.

Q: What is DIAC's strategic vision for the next five to ten years?

A: DIAC's strategic vision for the next five to ten years is focused on solidifying its position as a premier global destination for dispute resolution, with a strong emphasis on enhancing its global presence.

Our mission is to provide unmatched ADR services,built on principles of excellence, integrity, and equity.

To achieve this, DIAC has set four strategic priorities:

• Reinforcing Dubai’s position as a reliable global hub for alternative dispute resolution.
• Advancing DIAC's status as a leading international arbitration center.
• Advocating robustly for the use of alternative dispute resolution methods.
• Achieving organizational excellence.

We are committed to evolve and proactively support the needs of the global business and arbitration community. Our ultimate goal is to provide an equitable forum for dispute resolution that serves businesses of all sizes, sectors and industries.

By doing so, we aim to support economic stability and build confidence in the global marketplace.

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Interviewed by

Dmitry Marenkov, FAIADR, member of the AIADR

Editorial Sub-Committee

Source: Asian Institute of Alternative Dispute Resolution (AIADR)  

VTA’s Model Arbitration Clause: “Mọi tranh chấp phát sinh từ hoặc liên quan đến hợp đồng này sẽ được giải quyết bằng trọng tài tại Trung tâm Trọng tài Thương nhân Việt Nam (VTA) theo Quy tắc tố tụng trọng tài của Trung tâm này”. “Any dispute arising out of or in relation with this contract shall be resolved by arbitration at the Vietnam Traders Arbitration Centre (VTA) in accordance with its Rules of Arbitration”.

The Vietnam Trade Arbitration Center (VTA) is responsible for organizing and coordinating the resolution of business disputes through institutional arbitration, with jurisdiction over disputes including: (i) disputes arising from commercial activities between parties; (ii) disputes involving at least one party engaged in commercial activities; and (iii) disputes as prescribed by law to be resolved by arbitration.