UAE: Amendments to the Federal Arbitration Law

The introduction of amendments to the UAE Federal Law No. 6/2018 on Arbitration (the “Arbitration Law”) in September 2023 has been the highlight of the arbitration landscape in the United Arab Emirates (UAE). The Arbitration Law – largely based on the UNCITRAL Model Arbitration Law – applies to arbitrations seated in the UAE (other than in the financial free zones) or otherwise subject to UAE law. Arbitrations seated in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) are subject to separate laws and regimes.

Most of the changes incorporate recent developments in the UAE case law or arbitration practice generally, but some leave room for discussion.

Arbitrator impartiality and independence

The Arbitration Law now requires arbitrators not to have a direct relationship with any of the parties to the arbitration that may affect their impartiality, integrity or independence. Specifically, Article 10 of the amended Arbitration Law expressly includes this into the conditions for a person to serve as an arbitrator.

The change follows the relatively recent case decided by the Abu Dhabi Court of Cassation, where the Court set aside an arbitral award for failure of the arbitrator to disclose a conflict of interest.

The amendment is not revolutionary in nature as Article 10(3) of the Arbitration Law has required (and continues to require) arbitrators to declare circumstances that are likely to give rise to doubts as to impartiality or independence. Article 14 of the Arbitration Law provides for a possibility to challenge an arbitrator based on the circumstances that give serious doubts as to impartiality or independence. Therefore, the change does not introduce the principle.

However, the effect of the change may be a higher and stricter standard when there is a “direct relationship” with a party.

Default confidentiality of proceedings

The amendment has introduced broader default confidentiality of the arbitration proceedings (Article 33 of the amended Arbitration Law).

Previously, the law only provided for privacy of hearings and confidentiality of awards as a default rule, although the Dubai Court of Cassation held that arbitration is private, unless agreed otherwise.

The amendment expands the scope of confidentiality (absent the parties’ agreement) to expressly cover “the arbitration hearing and proceedings”. The amendment brings the standard closer to that provided by Article 14 of the DIFC Arbitration Law No. 1/2008, which dictates that “[u]nless otherwise agreed by the parties, all information relating to the arbitral proceedings shall be kept confidential, except where disclosure is required by an order of the DIFC Court.”

Tribunal’s discretion over the rules of evidence

The amendments reaffirm the tribunal’s discretion to determine the applicable rules of evidence, however with certain qualifications (Article 33(7) of the amended Arbitration Law).

Specifically, the amended Arbitration Law provides that the rules of evidence determined by the tribunal shall not conflict with public order. This rule introduces a limit to the tribunal’s existing discretion in relation to evidentiary matters.

Virtual proceedings

The amendments extend the use of virtual proceedings, allowing the parties to agree “to determine [their] place in reality or virtually by modern technological means or in technical media” (Article 28(1) of the amended Arbitration Law).

Before the amendments, the law already provided for a possibility of online hearings. However, the amendments include the relevant provision in the Article dealing with the place of arbitration, rather than the hearings, which may foreshadow a move to fully virtual proceedings.

Members of institution’s supervisory and controlling bodies as arbitrators

Finally, the amendments introduce conditions for the members of arbitral institutions’ supervisory and controlling bodies to be appointed as arbitrators in a case (Article 10 bis of the amended Arbitration Law). The conditions require that:

• The rules of the institution do not prohibit such appointment.
• The relevant institution has a governance system in place to ensure the separation of duties and impartiality, and to prevent conflicts of interest.
• The arbitrator is not a sole arbitrator or a president of the arbitral tribunal.
• The parties acknowledge in writing their knowledge of the arbitrator’s position and raise no objections to the appointment.
• The relevant institution has a reporting system in place for any wrongdoing of the arbitrators.
• The number of cases on which the arbitrator is appointed does not exceed five cases per year.
• The arbitrator shall submit a letter of undertaking not to exploit their capacity in a manner that may create a conflict of interest, to refrain from influencing the proceedings (such as through voting or deliberations).
• Other conditions set by the arbitral institution are satisfied.

A violation of any of these conditions invalidates the award.