Legal resolution

A service provider's contractual life-cycle is usually lengthy and can last several years. It is therefore inevitable that disputes over payments or q

The draft law will also make it easier for a Tribunal to extend the time limit on arbitration proceedings, as Clyde & Co associate Elise Gillians explains: “At present, unless the parties agree otherwise, or a court order is obtained extending the time limit, an arbitrator or tribunal must issue its decision within six months.

This is rarely desirable, particularly for more complex disputes. The new law allows the arbitrator or tribunal to extend this period without recourse to the court for a further period of up to six months. In terms of practicality, I see this as a change for the better.”

The bill is also set to lay down details regarding the procedure that should be followed during an arbitration process, according to Gillians.

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“If parties have agreed on arbitration, but have not agreed on a set of arbitration rules which determine the procedure, there will be less room for argument as to how the arbitration is to be conducted.

Again, these kinds of disputes lead to wasted time and greater costs for both parties.”

In addition, it is anticipated that the draft law will impact foreign arbitration awards and make them more easily enforced against companies in the UAE.

“The draft has not been made public yet, but in general terms, if you have a services company that is based in the UAE and you are a foreign entity who has a management contract or supply contract and you wish to have any disputes with that company determined by arbitration outside of the UAE, then the new law may make it easier to secure an award abroad and enforce it here in the UAE against that local company,” suggests Kilpatrick Stockton managing partner Tom Wilson.

“Bear in mind, however, that the law may not have application to disputes that are already in an arbitrational process before the new law is passed. It will be interesting to see how the law deals with this.”

It has been said that the law is based on international arbitral legislation, as well as the United Nations Commission on International Trade Law’s Model Law (UNICITRAL) and the IBA Guidelines on conflicts of interest.

“The federal law seeks to reinforce international standards to ensure that whenever there is an arbitration [hearing] in the UAE, the proceedings will be natural for all international practitioners and participants.

Hence, one of the aims is to promote the region as an international arbitration location,” says Systech International associate director Philip Adams.