Abu Dhabi’s New Arbitral Centre Unveils its Rules

Abu Dhabi continues to evolve – in recent years it has been diversifying its economy in line with its ‘Economic Vision 2030’ to achieve 64% of GDP from non-oil sectors by 2030, and in 2022 it achieved the highest growth in the MENA region.

In keeping with this vision, at the end of last year it was announced that the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) would be closing its doors to make way for the Abu Dhabi International Arbitration Centre, referred to as ‘arbitrateAD’. Whilst existing ADCCAC arbitrations will continue to be administered by ADCCAC, all arbitrations commenced after 1 February 2024 will be administered by arbitrateAD. 

The new centre has now issued its eagerly anticipated Arbitration Rules 2024. Below are some key aspects to be aware of:

The default seat is the ADGM, unless agreed otherwise (Article22(2)). This was to be expected since arbitrateAD is based in ADGM, a modern common-law commercial hub in the UAE’s capital city, Abu Dhabi. The ADGM arbitration law is based on the UNCITRAL Model Law and its courts are arbitration friendly. 

Written communications are to be exchanged “digitally” (Article 5(2)). Practical and green, this provision ensures that even diehards for paper correspondence will need to embrace digital communication.

If not agreed by the parties the language of the arbitration shall be determined by the Case Management Office, and then the Tribunal once constituted (Article 23). As an international arbitration centre it is important that the rules allow for whichever language is most appropriate. Having a default language (such as English) could alienate potential users that don’t use that language. As regards the rules themselves, the English version takes precedent above all others (Article 1(7)), a necessary clarification given possible discrepancies that exist in translations.

There are provisions for Expedited Proceedings (for claims less than AED9m (USD2.45m), Article 36) and Emergency Arbitrators (Article 35). These are welcome features which form part of many modern arbitral rules, but which were missing from the ADCCAC Rules.

Awards will be scrutinised by the centre’s ‘Court of Arbitration’ before being finalised (Article 40). This is a helpful quality-control measure which will mean users can be confident that all awards issued by arbitrateAD meet a consistent level of quality. 

Awards must be issue within 9 months of the initial case management conference, with this time limit being extendable upon the joint request of the parties (Article 38). The Tribunal will need to ensure that the procedural timetable is designed with this deadline in mind, or that the parties seek more time should it be clear that 9 months is not feasible. 

The Award must include a decision on which party shall bear the costs of the arbitration and any allocation of the parties’ legal costs and expenses (Article 41(6)(viii). This provision is important because under the UAE Federal Arbitration Law (which applies to arbitrations seated in onshore UAE, but not ADGM) Tribunal’s do not have a power to make orders as to legal costs, so this power needs to be found in the arbitral rules (or other agreement by the parties). 

Parties must inform the other parties and the Tribunal of the existence and identity of a third-party funder (Article 48). It is helpful to see this addressed directly and clearly as approaches differ on whether and when parties need to divulge the existence of a third party funder. 

A Fee Schedule is found at Annex 1 (although there is a fee calculator on the website). As was the case with ADCCAC, the fees are calculated on an ad valorum basis, i.e. they are set with reference to the amount in dispute, as opposed to on a time-spent hourly basis. For a claim of USD10m with three arbitrators, the fees would be in the regions of USD270k, similar to what would be charged by DIAC.  

There is a model clause at Annex 2. Parties should always seek to use the model clause with as few changes as possible, as this is the wording that the institution is expecting to see and, if necessary, to interpret should there be a dispute as to its scope. Parties can also agree to opt out of the procedures for Emergency Arbitrator and/or Expedited Proceedings, and there is suggested wording for that. 

The rules for arbitrateAD are clear, modern, and comprehensive. They will be attractive to users, both domestic and international, and give the new institution the best chance to quickly establish itself as a leading arbitral centre in the region, as well as being a key part of Abu Dhabi’s future as a diversified and sustainable economy.