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106Legal FocusAPRIL 2013Drafting Dispute Resolution ClausesUAEIn a region that places an unusually high level of importanceon procedure, lifting dispute resolution clauses from dustycontracts where they have been hibernating in silence andnever tested in practice, has so far proven to be not the wisestway to save on legal fees. Many have had their fingers burnedin the UAE and the wider GCC region when they leastexpected it, often not being sure which door to knock on toget the dispute resolution process started. AntoniosDimitracopoulos, Partner and Head of the Arbitration andDispute Resolution practice of Bin Shabib & Associates LLP inDubai, UAE explains the basics of what to look out for whendrafting a dispute resolution clause.The main concern most parties have whennegotiating a dispute resolution clause is:‘arbitration or litigation’. Is this position differentin the UAE?To start with, no. However, the difficulty withthis region is spelling out one’s choice inunequivocal terms that will stand the test of thelocal judiciary. The default position is thatdisputes under a given contract are to beresolved by way of local litigation. Departingfrom this requires a higher level of clarity inwording, finality in incorporation and authorityin agreeing, than in most jurisdictions.What would be the major areas to watch out forwhen drafting an arbitration clause?I would say it would be essentially two: theauthority of the person that signs the arbitrationclause and the way arbitration has beenincorporated into the agreement.Can you give an example of what could gowrong?For instance, a contracts manager may nothave the power to agree in a subcontract toarbitration under UAE Law. On the other hand,a CEO may have this, but if he signed on acontract that referred to an arbitration clauseexisting in say the main contract, then that typeof loose reference may not be effective andbinding. So it pays to be careful who signs andwhat is being signed. Assumptions on this frontcan mean nullification of the arbitration by theUAE Courts.Would you say that UAE Courts are suspicious ofarbitration and possessive of their jurisdiction?Not at all; it is simply a case of a higher thresholdfor proving that an arbitration clause clearlycarries a departure from litigation and this isbecause the latter is considered a fundamentalright that only authorised personnel canabandon.Would the position be less complicated beforethe DIFC Courts, which apply English Law?One would think so, in the sense that a lessstringent test on whether arbitration has beenagreed should apply. However, the DIFC Courtshave in one single year issued two diametricallyopposite and contradictory judgments on theissue of validity of arbitration clauses, whichplaced a dark veil of uncertainty on whatpractitioners thought to be an oasis ofstraightforward procedure.How did those judgments affect the drafting ofarbitration clauses?In short, one judgment upheld, correctly in myview, that the DIFC Courts cannot opine on thewww.lawyer-monthly.com