Dispute Resolution 2011 - Habib Al Mulla

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Habib Al mulla & Co United ArAb emirAtes 31 enforcement What procedures exist for enforcement of foreign and domestic awards? To ensure recognition and enforcement, domestic awards have to undergo a validation/ratification process before the UAE courts. This process is based on an ordinary court action, resulting in an order of recognition and enforcement by the competent court of first instance, which in turn is subject to the ordinary channels of appeal before the UAE courts. The UAE courts have become increasingly arbitrationfriendly and look favourably on the recognition and enforcement of arbitration awards. There is no time limit for the commencement of the ratification process. Importantly, the enforcement of an award is suspended pending completion of the recognition process (Dubai Court of Cassation, petition No. 265/2007, judgment of 03/02/2008). The recognition and enforcement of foreign awards is guided by the applicable bilateral or multilateral conventions listed in answer to question 21 as well as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Generally speaking, in accordance with those conventions, an award should be enforced provided it is final and appropriate for enforcement in the country of origin and it is not contrary to the principle of public policy as understood in the UAE. It is worth noting in this context that there are two recent instances of enforcement of foreign awards in the UAE under the New York Convention (vide Fujairah Federal Court of First Instance, Case 35/2010, judgment of 27 April 2010; and Dubai Court of First Instance, Case No. 268/2010, judgment of 12 January 2011). Awards rendered in the Dubai International Financial Centre (DIFC) are recognised and enforced in the UAE through a DIFC court order, which is likely enforceable in the UAE as a foreign judgment (article 7(2), Law No. 12 of 2004 in respect of the Judicial Authority at the Dubai International Financial Centre). Recognition and enforcement of DIFC awards before the Dubai courts is facilitated by reference to the 2009 Memorandum of Understanding Between Dubai Courts and DIFC Courts (which entered into force as from 16 June 2009) and the related Protocol of Enforcement between Dubai Courts and DIFC Courts, provided the awards are final and appropriate for enforcement before the DIFC court. Bar the application of one of the bilateral or multilateral conventions referred to above (article 238, CPC), the enforcement of foreign awards follows the same rules as the enforcement of foreign judgments (article 236, CPC). The UAE courts may refuse enforcement of a foreign award on grounds such as: • the lack of proper jurisdiction of the tribunal at the place of arbitration; • the deficient issuance of the arbitration award at the place of arbitration; • the improper summoning or representation of one of the parties in the foreign arbitration proceedings; • the contradiction of the foreign award with a previous UAE judgment or its violation of public policy or bonos mores as understood in the UAE (article 235, CPC). Importantly, recognition and enforcement is based on a principle of mutual recognition, whereby the UAE courts will only apply the provisions under article 235 CPC in relation to awards issued in countries that, in turn, recognise and enforce UAE awards (article 235(1), CPC). 32 Costs Can a successful party recover its costs? Costs usually follow the event, namely, the loser pays, even though the arbitrators retain some discretion to allocate costs and fix their own fees (subject to the determination of fees and costs in accordance with fee and costs schedules consecrated by the governing institutional rules, vide DIAC). An arbitration tribunal may award all kinds of costs, including arbitration fees and expenses. Counsel fees may also be recovered in full. Alternative dispute resolution Habib Al mulla & Co 33 types of Adr What types of ADR process are commonly used? Is a particular ADR process popular? The following types of ADR are occasionally used in the UAE. mediation and conciliation There are no particular court procedures that prescribe either of these two methods of alternative dispute resolution; parties nonetheless routinely provide in their commercial agreements for a tiered form of dispute resolution, mediation or conciliation being followed by a more formal dispute resolution procedure, such as arbitration or litigation. Any settlements reached through mediation or conciliation are contractual in nature and can be enforced as contracts before the UAE courts. At any stage in the proceedings before the UAE courts, the parties are allowed to file settlement agreements. Any court fees paid ad datum will be forfeited. expert determination Expert determination is only rarely used as a dispute resolution mechanism. As expert determination is usually used to determine uncertain parameters, such as a particular value or a fair price, Karim nassif karim.nassif@habibalmulla.com Gordon blanke gordon.blanke@habibalmulla.com Level 14, 014 Tower Tel: + 971 4 423 0000 Al Khail Road Fax: +971 4 447 9777 Business Bay www.habibalmulla.com Dubai United Arab Emirates www.gettingthedealthrough.com 253
United ArAb emirAtes Habib Al mulla & Co contracts providing for expert determination as a dispute resolution mechanism would arguably violate the shariah law rule against uncertainty. In any event, expert decisions in commercial contracts under UAE law are generally considered non-binding, with onward referral to litigation or arbitration. 34 requirements for Adr Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process? See question 4. Miscellaneous 35 Arethere any particularly interesting features of the dispute resolution system not addressed in any of the previous questions? One unique feature of the UAE dispute resolution system is the establishment of majilis, whereby the ruler of an emirate will essentially act as a conciliator in disputes between or within leading families of his emirate. 254 Getting the deal through – dispute resolution 2011
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