UAE Strengthens its Position as a Leading Arbitration Hub: Long-awaited Amendment of Article 257 of the UAE Penal Code on Arbitrators’ Criminal Liability Enters into Force

We are pleased to inform you that Article 257 of Federal Law No. 3 of 1987 Promulgating the Penal Code (“Penal Code”) has been amended to exclude arbitrators from the scope of its application.

Article 257 was amended by Federal Decree by Law No. 7 of 2016 in October 2016 to impose criminal liability on arbitrators, experts, and translators who issue decisions and opinions contrary to the duties of impartiality and neutrality.

The much-anticipated amendment was effected through Federal Decree by Law No. 24 of 2018 (“Decree”), which formally amends several provisions of the Penal Code including Article 257. The Decree was issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, the President of the United Arab Emirates (“UAE”), on 23 September 2018 and came into force on the day after its publication in Federal Gazette No. 638 dated 7 October 2018.

The UAE’s legal community welcomes this positive development which further consolidates the UAE’s position as an attractive arbitration hub following the recent enactment of a standalone arbitration law (Federal Law No. 6 of 2018 on Arbitration) inspired by the UNCITRAL Model Law on International Commercial Arbitration.

Essam Al Tamimi, Senior Partner at Al Tamimi & Company, said that “with a defined and secure legislative framework, the UAE has now affirmed, through a solid arbitration law and the recent and welcome amendment of Article 257 of the Penal Code, its commitment to arbitration. Arbitrators are now formally at bay from vexatious criminal proceedings.”

Dr. Hassan Arab, Deputy Managing Partner and Co-Head of Litigation, commented that “the removal of the criminal basis of arbitrators’ liability undoubtedly constitutes a positive and much-needed change to provide comfort to arbitrators in UAE-seated arbitrations.”

Thomas R. Snider, Partner and Head of Arbitration, stated that “this important development signals to arbitration stakeholders in the region and internationally that the UAE is an attractive seat of arbitration.”