Procedural Overview onto the rules of arbitration at the Ras Al Kamiah Reconciliation and Commercial Arbitration Center
Although a dispute may be resolved through court litigation, the parties in the new era are increasingly submitting their disputes for mediation, arbitration or any other Alternative Dispute Resolution (“ADR”). Since a long time, in Europe and in the rest of the world, it is widely admitted to resolve disputes through arbitration or mediation, rather than resorting to judicial proceedings.
The parties often opt for ADR avoiding national courts for the following perceived advantages:
- ADR is comparatively faster than court litigation, primarily because the administrative procedure is more straightforward, and also because the arbitration award generally constitutes a binding and final decision, with minimal scope for appeal.
- ADR is comparatively cheaper, especially when the dispute has an international scope. Indeed, the parties may save costs by settling their international dispute through a single procedure.
The parties have the freedom to choose:
- the ADR Centre among several options freely;
- the arbitrator(s)/mediator(s) with expert knowledge and from specific legal/technical backgrounds;
- the law to be applied;
- the language of the proceedings.
- With the provisions of the New York Convention, arbitration awards are easier to enforce in other countries than court judgments;
- Arbitration or mediation awards and proceedings are generally confidential.
THE RAS AL KHAIMAH CENTRE OF RECONCILIATION & COMMERCIAL ARBITRATION
The “ARTICLES OF ASSOCIATION OF THE RAS AL KHAIMAH CENTRE OF RECONCILIATION & COMMERCIAL ARBITRATION” (“Regulations”) are applicable on the commercial disputes presented to the R.A.K Chamber for reconciliation or arbitration by either a prior agreement between the parties of the dispute or on the request of a party and the approval of the other.
It is recommended for those who want to solve their dispute pursuant to the Regulations to include in their contracts:
- Article of Reconciliation; or
- Article of Arbitration; or
- Article of Reconciliation & Arbitration
The agreement of reconciliation or arbitration before R.A.K Chamber of Commerce & Industry is the acknowledgment by both the parties to accept the procedures as well as the rules and regulations and commit to it. Parties can agree in writing on the method of arbitration by utilizing different rules to manage the arbitration, including the non-compliance to the rules and regulations. In such a scenario, the role of the R.A.K Chamber shall be only to host the arbitration under its guardianship without applying any rules of the Regulations especially concerning the selection of the arbitrators and the possibility of filing or non-filing appeal against the award of arbitration.
The procedural rules that are agreed upon by both the parties shall be implemented on the dispute submitted to the R.A.K Chamber for reconciliation or arbitration. However, when there is no provision in the Regulations to address the specific matter in the dispute, then without prejudice, the laws of the country will be required to be followed. When one or more of the Regulations are not implemented, and the party is aware or expected to be aware of the same, and the party has not raised an objection within a suitable time, the party shall lose their right of objection thereafter. The parties shall be notified by registered mail or by any other known communication means such as fax, or e-mail. The correspondences shall be sent to the parties on their addresses registered to the secretary of the Centre.
Procedure for Reconciliation and Arbitration
The Board shall be formed by the members or others of specializations provided that their number should be a minimum of five as per the internal regulations of the R.A.K Chamber, and the Chairman shall be elected by the members.
- The desired party shall apply, in writing, to the secretary of the Centre.
- The application shall contain details of the case and the applicant's contentions supported by documents.
- The other party shall be notified by the secretary within a period of not more than seven days from the date of receiving the application. The other party shall present his opinion concerning the case within fifteen days from the date of notification of the reconciliation application.
- The reconciliation tribunal shall be formed by the Committee of Reconciliation & Commercial Arbitration of the R.A.K Chamber & Commerce ("Committee") as per the Regulations. The parties shall have the right to object on the appointment of the tribunal within two weeks from the date of notification, and the reconciliation procedure shall start after the expiry of such period.
- The authority shall hear the pleadings by each party who shall attend either personally or through an attorney.
- If the authority succeeds in reconciling the parties, it will be recorded in a minutes.
- The authority shall finalize its duty within two months from the date of commencement, with the possibility to extend the term for similar period/s by a resolution from the Committee. However, on failure to reconcile, the case/dispute shall be considered as non-existing before the R.A.K Chamber, and the rights of the parties shall not be prejudiced in any way due to what had been presented or written during the reconciliation sessions.
The party seeking for arbitration shall present an application to the Centre Chairman enclosed with the arbitration agreement along with the supportive documents which shall be sent to the defendant within seven days from date of receiving the application. If there is no agreement on the arbitration and the defendant fails to respond to the arbitration request within thirty days from date of dispatch, the arbitration request shall be considered as rejected from the defendant's side. However, if there is an agreement on the arbitration, the defendant is obligated to send his response to the Centre in regard the arbitration request along with his supporting documents within thirty days from the date of receiving the arbitration application.
Appointment of Arbitrators:
The arbitrators selected by the parties have to be approved by the Committee as per the Regulations.
The arbitration authority shall be formally notified of their appointment with a brief of the dispute, including the name of the litigants. Each arbitrator, whether appointed by the Committee or the parties, shall reply in writing within two weeks from the date of receiving the notification of his approval, a default of the same shall be considered as rejecting the delegation and another arbitrator shall be nominated. The arbitrator shall explain in his response about his relation, business, or any other connection with the parties that might raise a doubt concerning his neutrality towards the dispute.
The arbitrator's duty shall terminate prior to the closing pleading by the agreement of the parties to terminate it or by a Committee resolution if the Committee found a legal or actual reason that hindered its task or that fails to achieve its efforts as per the Regulations or in the specific time according to a complaint filed by either party or the arbitrators. The Committee shall review the complaint after notifying the concerned arbitrator and other arbitrators and litigants. The arbitrator and other parties of the litigation shall have the right to answer the complaint in writing within fifteen days from the date of notification, and the Committee shall issue its resolution within twenty-one days from the date of receiving all responses from the concerned arbitrator and other parties. A substitute of the arbitrator shall be appointed within twenty-one days from the date of dismissal in the same way as an arbitrator is appointed as per the Regulations.
If the arbitrator refuses the appointment or if the arbitrator expired during his duty or he could not attend the arbitration meetings, or if he is dismissed from the arbitration procedures, then the Committee Chairman has the right to cease the arbitration till the appointment of the substitute arbitrator or till the reason that hindered his duty is resolved.
If the parties fail to agree, explicitly or implicitly, on the law required to be implemented, the arbitration committee shall implement the currently valid laws and customs of the country if the subject of the litigation is internal and between parties who have their business addresses within the country. In other cases, the Committee shall implement the law/s closest to the subject of the litigation.
If the parties have agreed on arbitration inside the Centre and as per the Regulations, then it will be an arbitration authorized by reconciliation and accordingly appealable. The arbitrators who are delegated to effect the reconciliation shall follow the laws required to be implemented, except what is related to the general rules. If the parties agreed for the Centre to host the arbitration without implementing the Centre regulations, then the arbitration shall be either a judicial resolution or reconciliation by the approval of the parties.
The essential principles of judicial litigation shall be taken into consideration by the arbitration committee while exercising its duty:
- The right of defense and thus enabling both the parties to present their statements and evidence before issuing the arbitration award.
- Enabling both the parties to review all papers and documents presented by other party.
- Treating both the parties equally.
The parties have the right to attend either personally or via an authorized attorney before the Committee, and the Committee shall identify the valid representation. If any of the parties fail to attend the sessions requested by the Committee and fail to present within a reasonable period of time a good justification for their absence, the arbitration shall continue to resume.
Right for Temporary Injunction: The commencement of the arbitration shall not deprive the parties of their right to refer the litigation to the courts for taking temporary injunction. However, the party who takes such procedures shall notify the Centre secretary and the arbitration authority of the same.
The final award issued by the arbitration authority during the arbitration procedures shall be adopted by the majority and signed by the members approving it. The members objecting the award shall state their objection in writing depicting the reasons and sign it for it to be enclosed with the award. If there is no majority for concluding the award, then the final award or any other resolution adopted by the authority during the arbitration procedures shall be issued solely by the Chairman of the arbitration authority.
The charges of reconciliation or arbitration shall include the R.A.K Chamber fees, arbitrators charges, normal expenses spent by parties to prepare their defenses and any other administrative expenses related to renting halls, copies, registration, photocopying and other charges required for reconciliation or arbitration.
The Committee shall prepare the lists of registration, administrative fees for reconciliation and arbitration and arbitrators fees to be decided by the R.A.K Chamber Board of Directors and the arbitrators' charges shall be a percentage of total litigated amount with a minimum and maximum amount depending on the condition of the case.
The non-refundable registration fee is to be paid at the time of applying for reconciliation or arbitration.
The case shall not be handed over to the authority of reconciliation or arbitration until the complete payment of the administrative fees and any advance payment as decided by the authority. The authority shall have the right to request the parties to pay additional payments for reconciliation or arbitration. If the parties refuse to pay any of the required payments, the reconciliation or arbitration shall be terminated, and the secretary shall notify the authority as well as the Committee.