Implementation of foreign arbitration awards in UAE
Obtaining an arbitration award is not the end of the road to rectification. Enforcement or recognition is the later phase, and this phase can be complex and prodigious, especially if enforcement is assumed to be beyond the jurisdiction from which the award was obtained. Challenging the implementation of foreign arbitration awards in the United Arab Emirates, particularly in cases where the award debtor attempts to evade his obligations. Dubai arbitration lawyers invariably advise their clients or award creditors to formulate strategies for award enforcement.
Automatic recognition is offered of the applicability of the New York Convention on the recognition and enforcement of foreign arbitration awards (NYC), in the event of implementation of foreign arbitration awards. The UAE has been a signatory to the New York Convention since 2006 and the UAE courts that adhere to the treaty have personalized their approach to implementation. In short, the UAE after signing the treaty has also implemented foreign awards that, although they do not meet the requirements of the Code of Civil Procedure, do comply with the New York Convention.
New York in the United Arab Emirates
Article 5 of the BYC establishes that “a foreign arbitration award will be recognized and enforced in any signatory country of New York City, the party to the award will publish the request in the competent court and the opposing party will not comply with the court orders in the as follows:
- The arbitration agreement is not valid according to the law of the country in which the award was approved or cannot be arbitrated, or the parties are unable to enter into the agreement;
- Failure to provide adequate notice to the parties regarding arbitration proceedings;
- The law is not binding on the parties;
- The matter of the dispute cannot be submitted to arbitration;
- The arbitration authority was not designated in accordance with the law of the seat of arbitration;
- The execution of the award will be opposed to the public policy of the territory.
The New York Convention has prompted crucial discussions by changing the protocol of the UAE courts to enforce arbitration awards, especially in the absence of concrete legislation explicitly implementing the New York City clauses in UAE law. . A trend in favor of New York City can be observed through various court decisions issued in accordance with New York City principles.
The Fujairah Court of First Instance in case number 35 of 2010 approved a decision for the enforcement of a foreign arbitration award pursuant to the City of New York. The judgment in question is the first of its kind and explicitly recognizes the treaties or agreements signed by the United Arab Emirates. The ruling annulled many principles traditionally used to enforce arbitration and served as an example for other cases.
The Macsteel International vs. Airmech judgment of the Dubai Court of Cassation in 2012 made a strong impression, which decided not to apply the provisions of the Civil Procedure Law when enforcing foreign arbitration awards. Therefore, the NYC application was imposed. However, a dissenting opinion was observed in ITC against the Ministry of Irrigation of the Democratic Republic of the Sudan, where the Dubai Court of Cassation was of the opinion that enforcement of an award can be denied in the signatory countries of New York City due to the lack of a place of residence or if the courts lack jurisdiction to hear the matter.
In 2014, the Reyami vs. BTI Court of Cassation decision regarding the ratification of an award rendered in Germany, mentioned that the United Arab Emirates had issued a law ratifying the City of New York and therefore the provisions of the City of New York must be applied during the execution of the arbitration awards.
Contrary to the above, the enforcement of awards from countries that are not signatories to NYC. In such cases, a bilateral treaty between the UAE and the country in question is a potential avenue to enforce the award. The UAE has signed numerous bilateral treaties with countries such as Egypt, Syria, Jordan, Riyadh, France, and the GCC.
New Arbitration Law
Federal Law Number 6 of 2018 on Arbitration Law governs arbitration in the United Arab Emirates. However, the law is silent on the procedures related to the enforcement of foreign arbitration awards in the UAE. We remain inert to determine the laws that will be applicable to recognize foreign awards and how. With reference to Article 3 of the New York Convention, contracting parties or states should not impose stringent preconditions for the recognition and enforcement of awards compared to the conditions for enforcement of national awards. We believe that the provisions of the New Law will apply to foreign awards. However, we await that precedent. In accordance with Article 55 of the new Law and Article 4 of the New York Convention, the party seeking enforcement of a foreign award must submit a request that meets the conditions described in the previous provisions.
That, any party that wishes to challenge the enforcement of a foreign award may present its defense claim before the competent court that ratifies the award in accordance with article 55 of the Law. The new Law does not allow the parties to submit a request to annul the award in accordance with article 53 of the new Law, as the courts of the UAE do not have jurisdiction to annul a particular award.
After some underlying doubts, a positive pattern is being created for UAE courts to perceive the supremacy of the New York Convention and apply it. These court decisions demonstrate a positive move to the UAE implementation routine for those seeking to maintain external arbitration awards in the UAE. However, it is essential to maintain as a primary concern that the UAE has a civil law system in which precedents do not matter. Ergo, a decision made by one judge does not bind another, and he is free not to consider the sentences handed down by another court.