Legal Update for New Law on Arbitration – Federal Law No. 6 of 2018
The UAE Federal Law No. 6 of 2018 has introduced certain amendments in the UAE. It ranges from the enforceability of the interim awards as well as arbitral awards. In the appeal case of the Dubai Court, there was a welcoming development which stated that Arbitration is not an exclusive form of dispute resolution but an alternative on to the courts. It said that an arbitration stands alone not as an exceptional means for resolution of disputes but as an alternative solution. Arbitration as a dispute resolution mechanism is followed once the conditions are satisfied, taking into consideration the interest and intentions of the parties in a written form. It all case, the regulation makes it compulsory for the arbitration agreement to be in writing.
Cassation Petition No. 1019 of 2018
In March 2019, the Court of Cassation again stressed on the features of this dispute resolution mechanism, i.e. Arbitration, saying that it is an exceptional form. This case posed as a challenge to the Court for determining the validity of its jurisdiction. In this case, the parties exchanged several drafts of the agreement containing the clause for instituting Arbitration, but a hard copy of the agreement was not in place and signed by the parties.
The Court of Cassation held that Arbitration is an express agreement where the parties refer their disputes to the arbitration tribunal and not to a bench of the Court. The fact that an agreement for Arbitration is in writing, signed by both the parties and constitutes valid provisions for dispute resolution, states that the parties are willing to resolve their disputes via the route of Arbitration.
The Court also said that the text messages or electronic mails exchanged between the parties do not constitute arbitration agreement and therefore the pleadings out forth were baseless and to be dismissed.
It is to be taken into notice that the Cassation court made no such reference to the Arbitration Law provisions, let alone its applicability. Since, there is no provision for precedents to be binding on subsequent judgements, it is still hoped that the Courts will and are becoming more Arbitration friendly with regards to the Arbitration Law.