Federal Arbitration Law - Recent Amendments Enhance Transparency and Impartiality

Introduction

In a significant development, the UAE has introduced remarkable amendments to its Federal Arbitration Law through Federal Decree-Law No. 15/2023. This law, which amends certain provisions of Federal Law No. 6/2018 on Arbitration, brings about significant changes aimed at strengthening the arbitration process in the UAE.

Amendment to Article 10 – Qualifications of the Arbitrator

One of the key amendments is to Article 10 of Federal Law No. 6/2018, which outlines the qualifications of an arbitrator. The updated provisions, as per Federal Decree-Law No. 15/2023, emphasize the importance of the arbitrator’s personal and professional qualifications. The key amendments include:

Personal Qualifications:

The arbitrator must be a natural person, not a minor, under interdiction, or deprived of civil rights due to bankruptcy or criminal convictions involving immorality or dishonesty.

Independence and Impartiality:

The arbitrator should not hold positions in the administrative structure of the arbitration institution, should have no direct relationship with the parties that could compromise impartiality, and must declare any circumstances raising doubts about their independence.

Gender and Nationality:

Arbitrators are no longer required to have a specific gender or nationality unless mutually agreed upon by the parties or prescribed by law. The updated law emphasizes transparency, as arbitrator nominees are obligated to disclose any circumstances that might cast doubt on their impartiality or independence.

Introduction of Article 10 bis – Arbitrators from Regulatory Authorities

A new provision to the Federal Arbitration Law, Article 10 bis, has been introduced, allowing parties to appoint arbitrators from supervisory or regulatory bodies within the arbitration institution. Conditions for such appointments include:

• Compliance with the arbitration institution’s regulations.
• Establishment of a governance system ensuring separation of duties, impartiality, and prevention of conflicts of interest.
• Imposes limitations on the number of cases an arbitrator, with no more than 5 cases per year.
• Written acknowledgement by parties of the arbitrator’s affiliations and no objections to the appointment.

Violation of these conditions results in the invalidity of the arbitration award, with the right for parties to seek civil compensation.

Procedural Flexibility and Technology Adoption

The recent amendments also bring about changes to procedural aspects, promoting flexibility and efficiency. Article 23 authorizes Parties to agree on arbitration procedures, subject to the rules of any arbitration organization or institution. In the absence of an agreement, the Arbitral Tribunal has discretion to determine suitable procedures.

Moreover, changes to Article 28 grant parties the option to conduct arbitration either on-site or virtually through modern technical means. The Arbitral Tribunal is tasked with determining the proceedings’ location, considering the circumstances of the case and the parties’ preferences. The legislation emphasizes the use of modern technology and standards in conducting virtual arbitration proceedings.

Enhanced Hearing Procedures:

Article 33 has been amended to enhance arbitration hearing procedures. The updated law allows arbitration hearings to be held at private meetings unless otherwise agreed upon by the parties.

The Arbitral Tribunal is granted discretion in deciding the format of hearings, whether oral or based on the presentation of evidence and materials. The parties may engage legal experts for representation, and the Arbitral Tribunal has the authority to set rules for evidence exchange.

Conclusion

The recent amendments to the Federal Arbitration Law in the UAE, through Federal Decree-Law No. 15/2023, mark a significant step towards enhancing transparency, impartiality, and procedural flexibility in arbitration proceedings.

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