Today, I would deal with all the (unnecessary) frenzy that surrounds lawyers and parties alike when it comes to the question of enforcement of an arbitration award.
I have actually come across a party making a claim for security of costs before an English arbitrator in an LMAA arbitration on the grounds that enforcement of an arbitration award in the U.A.E is unpredictable, risky, challenging and using other synonyms of the same context. Yes, the party did manage to win an award on security of costs on the basis of those arguments. Sad. I know.
While I acknowledge that UAE judgments relating to enforcement of foreign and domestic awards always enlighten us with something new, in my view, it is not because the jurisdiction is ‘unpredictable’, but rather the jurisdiction is ‘relatively new’. Many of the provisions pertaining to arbitration under the U.A.E Civil Procedure Law and New York Convention alike are still being tested in the U.A.E for the very first time. The law is being developed, not changing rapidly.
In my view, the reason behind the prevailing views regarding the so called difficulty or unpredictability of enforcement of arbitration awards comes from a) ‘jurisdiction bias’ because party representatives although practicing in the U.A.E are also critical of it; b) when people do not comprehend something, they have a tendency to call it ‘uncertain’ or a ‘gray area’; c) large majority of party representatives in the U.A.E come from age old jurisdictions such as England & Wales and Egypt and find the constant development (or as they call it change) of judicial principles, unpredictable instead of exciting.
At the risk of sounding arrogant, which is certainly and genuinely not my intention, the enforcement of an arbitration award can be a relatively simple process if the parties or their representatives:
- understand that in U.A.E arbitration is a waiver of the fundamental right to access to courts, hence all the proxies and POAs;
- have thorough knowledge of the U.A.E Civil Procedures Law and the U.A.E Law of Evidence and not just the provisions that relate to arbitration;
- know matters which are or by analogy could be considered non-arbitrable under UAE law;
- know matters of public policy under U.A.E laws
- understand what constitutes a valid arbitration agreement under U.A.E law;
- the importance of parties’ fundamental right to present their case and the right of defence;
- importance of proper service
- are aware of opportunities available under the law for seeking court-intervention to rectify procedural irregularities before an award is passed
- importance of proper composition of arbitral tribunals
- have knowledge of comparative law, international jurisdictions, which again all comes with the knowledge of UAE Civil Procedure Law
I am an arbitrator myself, and I do not underestimate the importance of experience and knowledge of various guidelines (such as IBA etc.), procedures and rules, institutional and ad hoc (such as UNCITRAL etc.) applicable to the arbitration process itself. Knowing how to conduct an arbitration, whether ad hoc or institutional is pertinent to having a smooth, timely and cost effective resolution of disputes.
However, knowledge of local laws of the seat of arbitration, is as much important as the knowledge of how to control arbitration proceedings and timetables, preparing your witnesses of facts and expert and giving a closing that wont soon be forgotten and compels the other party to approach you for a settlement right after the final hearing.
Whether the seat of arbitration is U.A.E or the party intends to enforce an arbitration here, the knowledge of U.A.E law is not just to be applied at the time of enforcement, because at that time it is already too late.
For any party or representative hoping to enforce an award in U.A.E, knowledge of U.A.E laws is essential to be applied at the time of handling the arbitration proceedings and not after a potentially unenforceable award is already issued.
FAREYA AZFAR | LAW BLOGS 