The New DIAC Rules: Dubai’s ascent from regional to global arbitration hub
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Faris Nasrallah (Solicitor, Senior Courts of England and Wales)
12th February 2018
In 2018 the Dubai International Arbitration Centre (DIAC) is set to release its new arbitration rules (New Rules). Since its rules were last updated in 2007 the DIAC has become one of the busiest arbitration centres in the world, registering an average of over 300 cases annually between 2009 and 2016. The New Rules were released for public consultation in August 2016, itself a landmark shift towards transparent and user-focused efficacy. Reflecting the modern principles of other globally recognised arbitral institutions, the New Rules also resolve protracted conflicts and concerns over the application of the existing rules.
It is expected that the final published version of the New Rules will include provisions on the Dubai International Financial Centre (DIFC) as the default seat of arbitration; awards to be deemed rendered at the seat when not physically signed at the seat by tribunal members; emergency arbitrator appointments, expedited proceedings, and tribunal powers to sanction counsel conduct; recoverability of legal fees and other reasonably incurred costs; confidentiality and publication of awards; third-party funding; and Shari'a compliant arbitration. In the absence of a consolidated arbitration law in the United Arab Emirates (UAE), the New Rules also provide much needed interim clarification and guidance on matters of domestic arbitration law.
Complemented by various courts within the UAE, the DIAC’s daily functions are operated through a qualified body of case managers and administrative assistants. The creation of a DIAC Secretariat to administer and scrutinize draft awards under the New Rules should enhance the efficient systems already in place at the centre. Female arbitrators were appointed by the DIAC in over 30% of registered cases between 2010 and 2016, while over 45% of DIAC appointments went to arbitrators under the age 45 in the same period. An outward looking internationally staffed arbitration centre, the DIAC represents a shining light in the resurgence of arbitration across the Middle East.
As the international arbitration community reflect on the meaning and value of the term ‘pro-arbitration’, how a jurisdiction acquires such an epithet remains up for grabs. Inter-jurisdictional conflicts within the UAE, culminating with the introduction of criminal liability for arbitrators, have threatened to overshadow Dubai’s rapid rise towards becoming a global arbitration hub. Having opened an office in the DIFC in 2016 and with the DIFC as the default seat under the New Rules, the DIAC is perhaps now a harmonising force in the evolving relationship between offshore and onshore arbitration in the UAE.
While it is not yet known how the New Rules will apply in practice, they certainly assist the DIAC to enhance the business environment and attract investment into the UAE. It is expected that the New Rules will be enacted in the first half of 2018 by a decree of the Ruler of Dubai. Pending promulgating of a UAE federal arbitration law in line with the UNCITRAL Model Law, the rise of the DIAC and the substance of its New Rules represent an important thrust in Dubai’s ascent towards becoming a global arbitration hub.
Faris Nasrallah is the author of the forthcoming A Guide to the DIAC Rules (Oxford University Press). Faris is a Solicitor of the Senior Courts of England and Wales specialising in international arbitration, and has worked for leading international law firms in London and Dubai. He is Co-Editor of the Yearbook of Islamic and Middle Eastern Law and was previously a Teaching Fellow at the School of Oriental and African Studies (SOAS), University of London. Faris was educated at SOAS and Cambridge University.