Arbitration is an alternative dispute resolution method based on an agreement between the parties and it can be used to settle certain disputes. Although it is not allowed to use arbitration in all cases, in order to be able to use it when possible, companies in Dubai must include an arbitration clause or annex to the contracts signed with other parties. Our lawyers in Dubai can give you examples of cases in which arbitration is preferred over litigation and help you know more about the arbitration rules and the arbitration process.
Rules for arbitration
Arbitration can only be used to settle disputes arising between two or more parties if the parties in a contract stipulate the fact that the dispute can be referred to one or more arbitrators for settlement. If the parties agree to settle a dispute this way, they can no longer file a lawsuit before the courts in Dubai. However, if one of the parties does file a lawsuit and the other party does not object, the lawsuit may be considered and the ruling of the arbitration is canceled.
Arbitrators are appointed by the parties, either specifically mentioned in the agreement or when a dispute arises. The arbitrator cannot be a minor or an individual who is bankrupt or legally deprived of his or her civil rights. If the case requires more arbitrators, their number must be odd. Our Dubai attorneys can help you conclude an arbitration agreement or annex to existing business contracts.
The arbitration process
The Dubai International Arbitration Center offers arbitration services and facilities for regional and international business owners in Dubai. If a company wants to commence an arbitration process, a request for arbitration can be sent to the Center. The process will undergo according to the established rules for arbitration used by the Center. During the proceedings, each party has the right to be treated equally and is given the opportunity to present the cases.
Why arbitration instead of litigation in Dubai?
Compared to litigation where the case is sent in the court of law and where the Civil Code and the Companies Law are applicable, the arbitration is an amicable way of setting things straight without having to be represented in front of the authorities by a legal counselor. In an arbitration process, the parties can share their side of the story and can set up a convention in which several details must be mentioned.
For example, they can agree on dealing business issues in legal and correct terms with the help of arbitrators who can propose varied conditions for both parties, instead of sending the case in the court of law, where a preliminary case investigation is required. Such situations can be solved with minimum compensations and in less time compared to litigation cases which can prolong for a few years and where several costs are involved.
Rules related to arbitrators in Dubai
Arbitrators in Dubai cannot be agents, guardians, spouses or trustee of a participant in a mediation process, as it is against the law, in accordance with the Civil Procedure Code. Impartiality and integrity are two main attributes or requirements of an arbitrator in Dubai, and the breach of regulations will impose several penalties or even imprisonment in the Emirates. We remind that arbitrators in Dubai must rely on confidentiality and correctitude, and need to be acquainted with their duties and obligations when dealing with an arbitration process.
For more information about arbitration in Dubai and other conflict resolution methods, like mediation, you can contact our Dubai law firm.