LEGAL OPINION: Time to clean up the flaws in the laws

KK Sarachandra Bose of Dar Al Adalah.

KK Sarachandra Bose, partner/corporate, commercial and contract lawyer at Dar Al Adalah Advocates and Legal Consultants, says the arbitration system needs to be revamped.

Arbitration is used as one of the alternate dispute resolutions to resolve disputes between parties. It is considered as cost effective and less time consuming, unlike conventional court litigation.

But is it so? I do not think so. Let me quote a recent example in which I was involved. I represented three claimants in arbitration in Dubai involving millions of dirhams.

The dispute between the parties started in 2001. Since there was an arbitration clause in the agreement, the Dubai Court appointed a single arbitrator to settle the disputes.
The arbitrator’s fee as decided by the court was paid and the arbitrator heard the case, including hearing several witnesses.

When he was about to deliver the award, the Court of Cassation dismissed the appointment on the ground that each party will have to appoint their arbitrator, and the arbitrator will have to appoint the umpire, as per the arbitration clause in the agreement.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

Criminal cases
Meantime, the defendant filed criminal cases against the claimants in different emirates and used all his contacts and powers, including sending the claimants into jail.

Later, the claimants appointed their arbitrator, a highly qualified public chartered accountant who is also on the panel of Dubai Courts registered accountant experts.

The defendant appointed his arbitrator, who is a practicing
lawyer in the Dubai Court, and both arbitrators appointed the umpire who served as a judge in the UAE  for several years.

I represented the claimants and the defendant appointed a practicing lawyer in the Dubai Court as his lawyer for the arbitration. The entire arbitration proceedings were held in the office of the defendant’s arbitrator.

In 2007, arbitrators pronounced their award in favor of the claimants by a majority; claimants’ arbitrator and the umpire in favor, and the defendant’s arbitrator against.
All the arbitrators signed the last page of the award and released the award to the parties.

The defendant’s lawyer rushed to the court to nullify the award, even before the claimants verified the award and approached the court for ratification, on the ground that the arbitrators have not signed all the pages of the award.

The Court of First Instance nullified the award, followed by the Court of Appeal and the Court of Cassation, on the ground that the arbitrators failed to sign all the pages of the award.
The arbitrator appointed by the claimants say that he insisted to the other arbitrator and the umpire to sign all the pages of the award, but the other two dismissed his pleas on the ground that they know the law better than the public accountant.