Dubai Court of Cassation Clarifies Key Arbitration Principles in Recent Ruling

On 15th October 2024, the Dubai Court of Cassation delivered a landmark decision in Cassation No. 606-2024, shedding light on several important principles of arbitration. This ruling is particularly noteworthy in the context of recent amendments to the UAE Federal Arbitration Law, offering critical clarifications on key procedural matters. Below, we outline the key takeaways from this ruling.

Arbitrator Appointment and Institutional Conflicts

The ruling addressed significant changes introduced by Federal Decree Law No. 15 of 2023, which became effective on 16th September 2023. A new provision—Article 10 bis—was added to Federal Arbitration Law No. 6 of 2018, prohibiting the appointment of a sole arbitrator or the president of an arbitration tribunal from individuals who serve on the board of directors, board of trustees, or equivalent bodies of the arbitration institution managing the case in the UAE.

Party-appointed arbitrators may still be selected from these bodies, but only under specific, agreed-upon conditions. Any violation of this rule renders the arbitration decision void, allowing affected parties to seek compensation from both the arbitration institution and the arbitrator involved. Importantly, this provision applies exclusively to appointments made after the law’s effective date and does not retroactively affect prior appointments.

Waiver of Objections in Arbitration Proceedings

The court reinforced the application of Article 25 of Federal Law No. 6 of 2018, affirming that any party that knowingly proceeds with an arbitration, despite breaches of the arbitration agreement or applicable law, loses the right to object if the issue is not raised within the stipulated time frame or within seven days of discovering the breach. This principle underscores the critical importance of raising timely objections, as failure to do so waives the right to contest the process later.

Majority Decisions and Signing of Awards

A key clarification in the ruling concerned the signing of arbitration awards. For arbitral tribunals composed of multiple arbitrators, the award must be written and signed by a majority. If consensus cannot be reached, the president of the tribunal may decide the matter unless the parties agree otherwise. Dissenting opinions must be recorded in writing and attached to the final award. Should an arbitrator refuse to sign, their refusal must be documented, but the award remains valid as long as a majority has signed.

Procedural Autonomy and DIAC Rules

The court also provided guidance on the application of procedural rules in arbitration cases conducted under the Dubai International Arbitration Centre (DIAC). Where no specific procedural framework has been agreed upon by the parties, the tribunal is free to determine the procedures, provided they do not conflict with mandatory UAE laws. The application of the 2014 IBA Guidelines on Conflicts of Interest in international arbitration was also addressed, with the court ruling that their use does not violate party agreements, despite the Federal Arbitration Law not explicitly covering the removal of legal representatives.

Conclusion

This recent ruling by the Dubai Court of Cassation offers much-needed clarity on key aspects of arbitration in the UAE, from arbitrator appointments and objection waivers to the formalisation of awards and procedural autonomy. The decision reinforces Dubai’s position as a leading global arbitration hub, enhancing transparency and procedural certainty for parties engaged in arbitration.