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31 May 2023

Ministry completes new arbitration law draft

By Staff Writer



The UAE’s Ministry of Economy has completed drafting a new federal law on arbitration and the implementation of arbitral awards, the ministry announced yesterday. The law is in line with the ministry’s efforts to modernise economic and trade laws to suit anticipated requirements of the country’s growing economy.


The draft was prepared by the Ministry of Economy in co-operation with the Ministry of Justice and is expected to be ratified and issued in three months. The law seeks to establish provisions for domestic and international arbitration in the UAE and to enforce arbitral awards consistent with international obligations, including the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention. It is based on the United Nations Commission on International Trade Laws’ Model Law on International Commercial Arbitration adopted in June 21, 1985.


The law also incorporates latest developments and standards in international arbitration. When implemented, the law’s provisions will apply to all cases of domestic and international arbitration, regardless of whether the dispute is about trade, civil or administrative matters.


The law is seen as necessary for the UAE’s goal of hosting a regional international arbitration centre, similar to the ones found in France, the United Kingdom and Singapore.


The draft lays down a modern framework to address the issue of arbitration. Disputing parties have the right to accept the law’s provisions without obligation and have the option of choosing the procedures currently applied in Paris, London and Singapore.


The Ministry of Justice and the Ministry of Economy will play crucial roles in overseeing the implementation of the new law’s provisions, and ensuring their effectiveness and enhancement keeping in mind the country’s best interests and international developments in arbitration. The Ministry of Economy consulted specialists from the private and public sectors while preparing the law, including national arbitration centres in the country and abroad.


The draft has been approved by these consultants, who have said the law could become a regional and international model when adopted. 


Chapter one of the law includes a definition of its objectives and the scope of application. It states that the law covers the enforcement of relevant domestic and international law within the country’s territories to all cases, commercial, civil, or administrative, in case the conflicting parties agree to resolve their dispute through arbitration.


The next chapter establishes the United Nations Commission on International Trade Law’s (Uncitral) Model Law on International Commercial Arbitration as the basis for enforcement of the new arbitration law in the UAE. The Council is also given the right to refer to documents from the Uncitral Commission as needed. These stipulations provide flexibility in  adopting international developments in arbitration, in conformity with national interests. Chapter 3 of the draft law establishes an Arbitration Office.


In a move aimed at eliciting the views of the private sector and experts, the ministry has published the Arabic and English versions of the draft on its website: www.economy.ae.