UAE Polishes Federal Arbitration Law

The United Arab Emirates has fine-tuned parts of its Federal Arbitration Law (Federal Decree Law No. 6 of 2018) to iron out perceived creases and make it more effective.

The changes have been implemented via Federal Decree Law No. 15 of 2023 (effective from 16 September 2023). It amends the Federal Arbitration Law in the following ways:

• Article 10 now expressly prohibits the appointment of an arbitrator with a direct relationship with any of the parties to the arbitration that may prejudice the arbitrator’s impartiality and independence.
• Article 10 bis has been added to allow the appointment of an arbitrator who is also a member of the arbitration institution’s board of trustees, the executive management, or the administrative apparatus, subject to certain conditions.
• Article 28 now expressly allows the place of the arbitration to be determined virtually, and obliges arbitral institutions to provide the technology necessary for that process.
• Article 33 on hearings and proceedings gives the arbitrator greater discretion in determining the applicable procedures of the arbitration, rules of evidence and the timing of hearings.

The Federal Arbitration Law has been working well but these amendments are nonetheless welcome.

The changes give parties and arbitrators greater flexibility and control over the conduct and progress of arbitrations under the Federal Arbitration Law.

In particular, the greater procedural discretion given to arbitrators will allow for a more efficient arbitral process.

The change to allow those involved in the management of an arbitral institution to sit on a tribunal in an arbitration being administered by the same institution may seem small, but it will have impact.

Arbitral institutions need experienced arbitrators to help provide guidance and oversight over the institution’s operation, but arbitrators face a difficulty as accepting such a role effectively bars them from accepting appointments for arbitrations being administered by that same institution.

The change resolves this problem and will result in more arbitrators being open to accepting roles to enhance the management of an arbitral institution.

In all, the changes demonstrate the UAE’s commitment to arbitration as they show that the country is continually reviewing and reflecting on how to improve the Federal Arbitration Law to keep it in line with best practice and enable the UAE to remain attractive to users of arbitration - further steps on the path of its progress as an international arbitration hub.