Fundamental changes announced in DIAC Arbitration Rules
In Dubai, some key changes have been introduced in the arbitration regime to offer more flexibility and efficiency. Arbitration is the most widely sought alternative dispute resolution mechanism across the globe. The Dubai International Arbitration Center (DIAC) is a prominent arbitral institution having its own rules and regulations. Recently, the Federal Decree No. (34) of 2021 has made notable changes in the arbitral institutions in Dubai.
Some major changes include the abolishment of Emirates Maritime Arbitration Centre, 3-tier organisation of DIAC, encouragement toward conciliation, etc. In this article, we will discuss the key changes introduced by this new law with the help of our best arbitration lawyers of UAE.
What does this new law offer?
In the opinion of our top arbitration lawyers of Dubai, the following changes are introduced –
- Organization of DIAC
With this new law, the organizationof DIAC is divided into 3 levels: administrative body, arbitration courts, and board of directors. The board of directors will act in supervisory capacity and perform their duties to attain the goals of DIAC.
As pointed out by our top arbitration lawyers of Dubai, the arbitration court will not only replace the earlier executive committee but also supervise the ADR services rendered by the DIAC, such as appointment of arbitrators, mediators, etc. The court shall convene minimum one meeting within 60 days. The court will review the draft award before the pronouncement, manage the expense of the tribunal, and ensure compliance with other procedural requirements
The administration body is entrusted with the responsibility to supervise the day to day functioning of the DIAC.
- Conciliation proceedings
The new law provides for a conciliation mechanism with an objective of amicable dispute settlement between the parties. The conciliation proceedings will be conducted in accordance with the rules of DIAC
Article 3 of the New law provides that a single conciliator is appointed by the arbitration court for the settlement of disputes between the parties. The conciliator must ensure that both the parties shall be given adequate opportunity to present their case along with the supportive documentary evidence.
Our best arbitration lawyers of UAE have pointed out that the time period of conciliation proceedings is 2 months, which can be extended after obtaining consent from both the parties. If no settlement is reached between the parties, the proceedings shall be terminated forthwith without affecting the merits of the case.
To save the precious time of both the parties, the new law provides for a concept of expedited hearing. As per Article 32, the expedited hearing shall take place in the following circumstances-
- When the claim and the counterclaim in the dispute is less than or equal to AED 1,000,000;
- When the parties express their willingness of expedited hearing in writing;
- When the court feels that it is essential to protect the ends of justice by expedited hearing in certain exceptional circumstances.
The expedited proceedings must be completed within 3 months from the date of appointment of arbitrator. However, the parties need to pay the full cost of arbitration in advance.
Other highlights of the new law
- The new law also offers an alternative arbitral appointment process offering more autonomy to the parties;
- It also provides for the mechanism of appointment of emergency arbitrators in accordance with Article 2 of new rules;
- As per Article 8, the tribunal can consolidate the arbitral proceedings wherein there are multiple Claimants and Respondents emanating from the same case.
With the introduction of this new law, some fundamental changes have been introduced to strengthen this widely sought dispute resolution mechanism. This amendment aligns with the international standard set by the International Chamber of Commerce (ICC) and LCIA. However, if you want to know further, you can contact one of our best arbitration lawyers of Dubai.
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