DUBAI – The United Arab Emirates has passed a new law that will have positive impact on both domestic and foreign businesses.
The long-anticipated law titled “Federal Arbitration Law” and issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan, repeals the former law governing arbitration in the UAE.
With the new law, UAE will establish its position as the most attractive hub for arbitration in the Middle East and North Africa region, according to legal experts.
Composed of 61 articles, the law is based on the United Nations Commission on International Trade Law [UNCITRAL] Model Law.
Legal experts in the UAE stressed that the new law will significantly revamp UAE arbitration law while building the UAE’s reputation as a preferred seat for international arbitration in the region since it is aligned with international best practices and standards.
“As one of the most significant and anticipated law reforms of recent times, the Federal Law No. 6 of 2018 on Arbitration in Commercial Disputes is welcome news for the UAE and was greeted by businesses and the international arbitration community,” according to Maria Mazzawi and Bill Smith, arbitration experts at Pinsent Masons law firm.
“This new law will have a positive impact on both domestic and foreign businesses, while encouraging even more foreign direct investment into the UAE,” said Mazzawi.
Businesses already operating in the region will now have more reassurance that future disputes –- if they can’t be avoided at all –- would be resolved quickly.
The new law will come into effect one month after it is published in the Official Gazette.
UAE Minister of Economy Sultan bin Saeed Al Mansouri will coordinate with the arbitration institutions in the UAE in order to issue a charter on the professional conduct of arbitrators.
Major changes in the new law compared to the previous law include the recognition of arbitration agreements made by modern communication methods, such as e-mail as well as the recognition of the competence-competence principle with arbitrators given the power to decide their own jurisdiction.
The law also permits preliminary orders and interim measures and ensures that enforcement is not automatically stopped if there is a challenge to an award.