The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
At the cusp of the New Year, the Abu Dhabi Chamber of Commerce and Industry (ADCCI) announced the launch of arbitrateAD or, as it is more formally known, the Abu Dhabi International Arbitration Centre (ADIAC). ADIAC will replace its predecessor, the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC), which served as Abu Dhabi’s principal arbitration centre for nearly three decades.
The Arbitration Rules for ADIAC (“Arbitration Rules 2024“) came into force on 1 February 2024. The Arbitration Rules 2024 replace the 2013 ADCCAC Arbitration Rules (“ADCCAC Rules“) from that date onwards. Accordingly, new cases registered on and from 1 February 2024 will be administered by ADIAC while the ADCCAC Rules will continue to apply to any pending cases filed before 1 February 2024.
In this article we discuss some of the key features of the Arbitration Rules 2024.
Article 1 provides that the Arbitration Rules 2024 apply where the parties agree to refer to disputes to ADIAC or the Abu Dhabi Chamber of Commerce. Save for pending cases filed before 1 February 2024, the Arbitration Rules 2024 also apply to disputes under contracts which reference the ADCCAC Rules.
One of the key features of ADIAC is the creation of a stand-alone Court of Arbitration which operates independent of the ADCCI. The Court has a supervisory role over the arbitrations administered under the Arbitration Rules 2024 and has a number of responsibilities such as handling appointment of arbitrators, resolving challenges to arbitrators, deciding on the joinder and consolidation requests, and also scrutiny of arbitral awards.
Notably, Article 8 (1) also provides for the role of Court in resolving challenges to arbitration agreements on a preliminary basis before the constitution of the Tribunal. The Court may decide to proceed with arbitration if it is prima facie satisfied that it has jurisdiction to administer the arbitration or dismiss the request if it finds to the contrary.
The Arbitration Rules 2024 provide for streamlined timeframes in relation to the commencement of proceedings.
Proceedings are commenced by the claimant filing a Request for Arbitration. Article 7 provides for a respondent to file the Answer to the Request for Arbitration (“Answer”) within 21 days from receipt of the Request for Arbitration. Where Counterclaims are filed with the Answer, a claimant is to file its reply to the Counterclaims within 21 days from receipt of the Answer.
In a significant departure from the ADCAAC Rules, the Arbitration Rules 2024 expressly allow for multi-party and multi-contract arbitrations, joinder and consolidation.
Article 10 allows parties to bring a single arbitration claim arising out of multiple contracts or arbitration agreements. The Court is empowered to determine if the claims can proceed in a single arbitration by taking into account factors laid down in Article 10 (2), which include consideration of efficiency and expeditiousness of arbitration.
The joinder provisions are outlined in Article 11. The Court is empowered to decide whether to admit an additional party. However, the Court may decide to join an additional party only if all the parties agree, or where the Court is satisfied that an additional party is subject to the Centre’s jurisdiction.
Similarly, Article 12 provides a structured framework for consolidation encompassing considerations of efficiency and expeditiousness of the arbitration. If consolidation is granted, the arbitrations are consolidated into the first commenced arbitration with an adjustment for costs.
Party autonomy as to the appointment of arbitrators is upheld under Article 13 which sets out the provisions regarding the number of arbitrators and their appointment. Where there is no agreement as to number of arbitrators, ADIAC appoints a sole arbitrator unless it decides that it is appropriate to appoint three arbitrators while giving parties an opportunity to be heard on that issue.
The Court has power to appoint arbitrators where the parties fail to nominate their arbitrators in the given time period. Article 13 (9) also requires that a sole arbitrator or president of a Tribunal should be of a different nationality to that of the parties in the dispute unless the parties agree otherwise.
An arbitrator’s duty to be independent and impartial and the duty of disclosure is covered in Article 15, which also provides for arbitrators to confirm their availability for the arbitration (which is no doubt aimed at those arbitrators who accept appointments in circumstances where they may be sitting on a number of other cases which are likely to create scheduling conflicts and delays).
A party’s right to challenge an arbitrator where there is justifiable doubt as to the arbitrator’s independence or impartiality is covered under Article 16. Challenges to arbitrators are resolved by the Court.
Article 19 of the Arbitration Rules 2024 makes express provision for the appointment of arbitral secretaries and their duties. This is a welcome change. Under the ADCCAC Rules there was no clarity as to the appointing authority of the Tribunal regarding appointment of arbitral secretary which resulted in secretaries being appointed by ADCCAC or the Tribunal.
Article 22 provides that the ADGM will be the seat of the arbitration where the seat is not agreed. It also clarifies that the reference to the place of arbitration will be a reference to the seat of the arbitration and that the Award shall be deemed to have been made in seat of arbitration regardless of where it is conducted.
Interestingly, the Arbitration Rules 2024 do not set a default language and provide for the initial language to be determined by the Case Management Office until the Tribunal is constituted (Article 23). While this is a sensible change, it also raises questions as to the factors the Case Management Office will take into account when deciding the initial language of the arbitration.
The Arbitration Rules 2024 contain provisions on signing Terms of Reference. These provide that Terms of Reference are not mandatory and give the Tribunal the discretion to direct whether Terms of Reference are to be signed. They also provide that where the parties do sign a Terms of Reference, no party shall assert new claims which fall outside its scope unless allowed by the Tribunal (Article 30 (2)).
Articles 20 to 33 of the Arbitration Rules 2024 set out the provisions relating to the conduct of the arbitration proceedings including the exchange of pleadings and evidence, legal submissions and the conduct of hearings. For the most part, these are fairly standard and are consistent with other institutional rules such as DIAC, ICC and SIAC.
Article 30 contains provisions for making new claims or counterclaims. In proceedings where no Terms of Reference have been issued, Article 30.1 provides that the parties cannot assert any new claims or counterclaims after the submission of their respective Statement of Claim and Statement of Defence and Counterclaim, unless the tribunal considers it appropriate. Where the tribunal has decided to issue Terms of Reference, Article 30.2 provides that no new claims are to be asserted which fall outside the limits of the Terms of Reference, unless authorised by the tribunal. Notably, Article 30.2 is silent about counterclaims, unlike Article 30.1.
Under Article 34, the Tribunal has the power to order preliminary measures in a form of an order or award. The Tribunal can also order the party seeking the preliminary measure to provide appropriate security. A party seeking urgent preliminary relief can also apply for emergency arbitration under Article 35. The Emergency Arbitrator has powers equivalent to the Tribunal and his or her decision is binding. The Emergency Arbitrator may allocate costs, require a party to provide security and may also decide on its own jurisdiction. The Arbitration Rules 2024 set out a time limit of ten days (which may be extended in exceptional circumstances) for the Emergency Arbitrator to rule on an application for emergency arbitration. The Emergency Arbitrator’s appointment is revoked upon the constitution of the Tribunal and the Tribunal may reconsider, modify or vacate any decision by the Emergency Arbitrator.
Article 36 provides for expedited proceedings where the claim amount exceeds AED 9,000,000, which is a reasonably high monetary threshold compared to other arbitration institutions. The expedited procedures provide for claims to be determined on the papers rather than by way of oral evidence at a defended hearing and impose a time limit of four months to render the award (which may be extended on a reasoned request by Tribunal provided that the extension does not exceed additional two months).
Article 37 provides that where a party becomes aware of any non-compliance with provisions of the Arbitration Rules 2024 and does not promptly object to such non-compliance, such party is deemed to have waived its right to object.
Article 38 imposes a time limit of nine months for issuing the final award calculated from the date of the initial case management conference. This time limit can be extended by the Court upon its own or upon reasoned request by the parties. The Tribunal may also make single award or separate awards for different issues parts of claims/counterclaims (Article 41 (2)).
Under Article 40 the Tribunal is required to submit the draft form of the Award for scrutiny by the Court. The Court may suggest modifications of matters such as form of the award, clerical errors, omissions or inconsistences and aspects in the Award Checklist. There is no Checklist appended to the Arbitration Rules 2024, but Article 1 defines the Checklist as ‘a periodic resource provided by the Centre to arbitrators acting under the Rules’.
Article 41 also contains a number of requirements for the form of the Award including the requirement of Tribunal’s signature on each page of the Award. Article 41 also allows for awards to be signed electronically and for submission and delivery to be done digitally.
Articles 42 and 43 provide that applications to correct, interpret and request for an additional award are to be made within 14 days from the parties’ receipt of the final award.
These are welcome changes. While the enforcement of awards in the UAE has improved significantly over the years, there are still cases where the onshore courts have nullified awards on a technicality. This is often a result of arbitrators not being familiar with the civil procedure rules and practices of the onshore courts. The measures introduced under Articles 40 and 41 of the Arbitration Rules 2024 should serve in reducing these issues for ADIAC issued awards.
Other key features of the Arbitration Rules 2024 include provisions:
The Arbitration Rules 2024 represent a significant step forward for arbitration in Abu Dhabi and the UAE. They are consistent with the UNCITRAL model arbitration rules and as such are on par with the rules of major international arbitration centres such as the ICC, LCIA and SIAC. They address many of the gaps that were present in the ADCCAC Rules particularly in relation to the granting of interim or emergency relief, the consolidation of multiple parties and claims, the joinder of third parties, the award of lawyer-client costs and the efficient disposal of proceedings through expedited procedures and summary dismissal of unmeritorious claims.
Most importantly, the Arbitration Rules 2024 take into account the unique arbitration landscape in the UAE and provide mechanisms for ensuring that arbitration proceedings will be conducted fairly and efficiently and that awards issued under the Arbitration Rules 2024 will be enforceable, so far as that is possible.
As with all things, time will tell as to how the Arbitration Rules 2024 will be interpreted and applied, but parties doing business in the UAE will, in our view, be able to take comfort from the fact that Abu Dhabi now has a modern arbitration centre overseen by a dedicated arbitration court with up-to-date and comprehensive arbitration rules.