DIFC ideal for arbitration

Free zone status makes Centre ideal alternative to local courts

DIFC's freezone status can help in arbitration, said an expert
DIFC's freezone status can help in arbitration, said an expert

UAE contractors should strongly consider naming the Dubai International Financial Centre (DIFC) as the seat of jurisdiction when drafting contractual agreements, according to Omar Al-Saadoon of legal firm Al Tamimi & Company.

Speaking at Construction Week’s annual conference in Dubai today, Al-Saadoon said the DIFC’s free zone status allows it to have its own arbitration law and court which make it an ideal alternative to local courts for dispute resolution.

“The DIFC has its own London Chamber of International Arbitration (LCIA) court where arbitration is based on quasi common law principles and judges, with common law backgrounds, come from jurisdictions such as Australia, UK and the US,” he said.

“This means that you can avoid some of the difficulties often faced in local courts when it comes to judges being inexperienced in technical terms and matters specific to construction law.

“It’s particularly suited to companies in large scale construction projects or complicated contractual agreements. The companies don’t actually have to be based in the DIFC, but need to give the DIFC the power to preside over a dispute under the terms of the contract.”

Al-Saadoon was speaking as part of a discussion panel on dispute resolution, where all panel members agreed that the UAE court system’s ability to handle construction disputes was still maturing.

“The contractors often suffer because the courts deliver verdicts based on the opinion of so-called experts which are then blindly stamped by judges with no technical knowledge,” said Dr Imad Al Jamal, the managing director of the International Dispute Resolution and Arbitration Centre (IDRAAC).

Anthony Edwards, head of engineering and construction at Hadef, agreed: “There is a big gap in this region in terms of the enormity of construction compared to the law in place to deal with it.”

Nigel Truscott of Trowers & Hamlins agreed that the system needs improving, but said clear arbitration and dispute resolution clauses in the contract can often avoid complications in local courts.

“If you have clarity in the contract right from the start then the courts will generally follow it and you can keep out of that unpredictable area.”

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Construction Week - Issue 767
Sep 01, 2020