By Arthur Dedels, Associate, Arbitration Department.
Does a respondent have multiple opportunities to put forward jurisdictional objections before DIAC’s Executive Committee determines whether the arbitration can proceed?
When a respondent raises a jurisdictional objection to an arbitration being commenced in the Dubai International Arbitration Centre (DIAC), the arbitration centre usually invites the claimant to provide comments on the respondent’s jurisdictional objection. Once feedback is received, the matter is then passed on to DIAC’s Executive Committee which determines whether the arbitration can proceed. The respondent however may wish to provide a response to the claimant’s comments before the matter is passed to the Executive Committee. Is the respondent allowed such a reply? DIAC says ‘no’, at least when the claimant objects.
Horizons & Co are acting for a claimant in an arbitration commenced in DIAC. The respondent raised a jurisdictional objection as a preliminary issue to be ruled upon by the Executive Committee pursuant to Article 6 of DIAC Arbitration Rules 2007 (DIAC Rules). In accordance with Article 5.8 of DIAC Rules, DIAC requested the claimant’s comments on the respondent’s jurisdictional objection. The claimant provided its comments, at which stage the matter would usually be passed to the Executive Committee, to decide whether the arbitration can proceed, so that the tribunal can be constituted. In this case however, the respondent requested that DIAC provide the right to reply to the claimant’s comments. There is no provision in DIAC Rules for a respondent’s right of reply to such comments, however the rules do not state any restriction either.
Horizons & Co objected to the respondent’s request on the following grounds:
1. DIAC Rules do not provide the right for a respondent to reply to the claimant’s comments (in contrast, Article 5.8 of DIAC Rules states that the claimant is to be given an opportunity to make comments).
2. The request for such a reply was accordingly unusual, and the respondent had not explained why this was necessary.
3. Granting the respondent such a right would cause unnecessary delays.
4. The respondent was initially presented with the opportunity to justify its jurisdictional objections within its Answer to the Request for Arbitration.
5. If the Executive Committee allows the arbitration to proceed, the respondent will have an opportunity to raise its jurisdictional objections before the tribunal.
6. DIAC Rules are not intended to provide an opportunity for protracted submissions on jurisdiction before the Executive Committee, whose role is to determine a relatively straightforward issue pursuant to Article 6.2 of DIAC Rules, i.e. whether an arbitration agreement may exist between the parties.
7. If the respondent is granted a right of reply, then the claimant should be granted a right of reply to the respondent’s reply. Fairness within the proceedings requires that both parties be granted the same opportunity to make submissions. However, this point illustrates how this could become unnecessarily protracted and as such no further submissions should be allowed.
DIAC refused to grant the respondent the right of reply and invited the Executive Committee to determine whether the arbitration should proceed.
Suggestion for claimants:
· Do not hesitate to submit a detailed objection if a respondent makes such a request which you wish to oppose.
Suggestions for respondents:
· Ensure your jurisdictional objections are comprehensive and clear, especially if they directly relate to the issue within the Executive Committee’s primary discretion (pursuant to Article 6.2 of DIAC Rules), i.e. whether an arbitration agreement may exist.
· If there is a particular need to reply to the Claimant’s comments, explain why it is necessary and/or proportionate that you be granted a reply at this stage (e.g. to correct a significant inaccuracy within the Claimant’s comments and/or it would not cause much delay).