Enforcing foreign arbitral awards in UAE

China is Dubai’s largest – and the UAE’s second-largest – trading partner, with annual trade set to reach US$60 billion by the end of 2016, according to the UAE government. The dispute resolution method in commercial contracts that underpin such trade is often arbitration. But while a party to arbitration proceedings may obtain a favourable arbitral award, that award may also need to be enforced in the jurisdiction(s) where the losing party has assets.

Awards must be recognized and enforced by the courts. The courts of the UAE comprise both the civil law courts, where proceedings are conducted in Arabic, and the English-language common law courts. The civil law courts comprise the federal courts, as well as the independent courts of Dubai, Abu Dhabi and another emirate, Ras al Khaimah. The common law courts include the courts of the Dubai International Financial Centre (DIFC Courts) and the recently established Abu Dhabi Global Market Courts (ADGM Courts). The enforceability of foreign awards varies between these two sets of courts, as set out below.

Enforcement in the civil law courts. The UAE acceded to the New York Convention in 2006, and the first foreign award was enforced in 2010, when the Fujairah Court of First Instance enforced an award issued by the London Maritime Arbitrators’ Association. Despite this promising start, there were subsequently a number of setbacks to the enforcement of foreign awards in the form of judgments of the civil law courts declining enforcement. These decisions were often based on technical and procedural objections raised by the debtor.

Tarek Shrayh is a partner and Robert Karrar-Lewsley is a senior counsel at Al Tamimi & Company