On 14 September 2021, Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai issued Decree No. 34 of 2021 (“Decree”) to abolish the Emirates Maritime Arbitration Centre (“EMAC”) and the DIFC Arbitration Institution (“DAI”). The functions of EMAC and DAI are now merged with those of the Dubai International Arbitration Centre (“DIAC”).

The move is set to support Dubai’s continuing efforts to enhance its evolving status as a globally recognised hub for resolving disputes through alternative means of dispute resolution. This article highlights the main changes posed by the Decree and its effect on current and future arbitration proceedings.

Current Arbitration Proceedings

Abolished Centres

With immediate effect, the Decree abolished EMAC (established under Dubai Decree No. 14 of 2016) and DAI (regulated by Dubai Law No. 5 of 2021) (together the “Abolished Centres”). The Decree does not expressly refer to the DIFC-LCIA. However, given that the LCIA entered into an agreement with DAI in 2008 for the establishment of the DIFC-LCIA arbitration centre, it is understood that the DIFC-LCIA will cease to exist.

Transfers

The Decree sets out that as of 14 September 2021 (“Effective Date”) the ownership of all assets, movables and devices belonging to the Abolished Centres are to be transferred to DIAC. This includes the Abolished Centres’ employees, financial appropriations, lists of arbitrators, experts, and conciliators. Overall, DIAC will now take over all the rights and obligations of the Abolished Centres.

Validity of Arbitration Agreements

All agreements concluded on the Effective Date which refer to resolution by the Abolished Centres are considered valid and effective but will be replaced by DIAC. Additionally, DIAC is to supervise cases currently being heard in the Abolished Centres.

Moreover, DIAC will continue hearing cases, petitions and appeals relevant to any arbitration award or its procedures in the DIAC as well as those transferred from the Abolished Centres.

Repealed Decrees

The following Dubai decrees are repealed as of the Effective Date:

1. Decree No. 14 of 2016 – Establishing EMAC

2. Decree No. 17 of 2019 – Approving Statutes of DIAC

3. Decree No. 31 of 2019 – Forming Board of Trustees of DIAC

4. Decree No. 32 of 2019 – Forming Board of Trustees of EMAC

Time for Enforcement

The Decree has provided DIAC with six months from the Effective Date to coordinate with all competent authorities and regulate its status as directed in the Decree.

DIAC’s Headquarters

DIAC will be headquartered onshore in Dubai and open a branch in the DIFC with parties free to choose either as the seat of their arbitration.

Future Arbitration Proceedings

Validity of Arbitration Agreements

All future arbitration agreements are to clearly specify DIAC as its arbitration institute of choice. As outlined in Article 6 of the Decree, all agreements concluded up to and on the Effective Date are valid, therefore it is presumed that any arbitration agreement entered into thereafter which outlines EMAC or the DIFC-LCIA as its arbitration institute may be considered invalid.

Seat or Place of Arbitration

Where parties have selected the Emirate of Dubai as the seat or place of arbitration, the Arbitration Law shall govern the arbitration agreement and procedures. The Courts of Dubai shall have jurisdiction over any case, request or challenge concerning the arbitration award or procedure issued by a DIAC arbitral tribunal.

Unless the parties agree otherwise, where they opt for the DIFC as their preferred seat or place of arbitration, DIFC Law No. 1 of 2008 (or substitute legislation) shall govern the arbitration agreement and procedures. The DIFC Courts will have jurisdiction over the case, request or challenge pertaining to the award or procedure issued by an arbitral tribunal in DIAC or procedure.

Ongoing Arbitration Cases

The Decree also provides that arbitral tribunals already formed under the DIFC-LCIA Rules as of the Effective Date will continue to handle those cases “pursuant to their applicable rules and procedures” but that the DIAC and its Administrative Body will “undertake the supervision of such cases.”

Competence of Court

The Decree confirms that it is within the Dubai Court and the DIFC Court’s competence to check the drafts of arbitral decisions and awards prior to being signed and approved by the arbitrators. Arguably, it can be said that this step is to ensure the quality and enforceability of awards.

In conclusion, the Decree is a great development which not only provides for a unified arbitration system in Dubai, but also promotes the UAE as a global arbitration hub.