Recognition And Enforcement Of Domestic And Foreign Arbitral Award In The UAE

Lawyers always face the question from their clients in an arbitration matter “so now we have an award, what is next and how do I get the money, when do I get paid?”

The UAE is a well-recognised arbitral jurisdiction, in both onshore and offshore jurisdictions, due to the number and size of the daily transactions. There are, essentially, three jurisdictions in the UAE for the purposes of arbitration: onshore UAE; and the financial free zones of the DIFC and the ADGM. The means by which an arbitral award will be enforced depends on the legal framework of these jurisdictions, the seat of the arbitration giving rise to the award, and any treaties or reciprocal agreements in place with the UAE. For the purposes of this article:

Domestic arbitral awards are awards seated in the UAE, whether onshore or in the financial free zones.
Foreign arbitral awards are awards seated outside the UAE (that is, awards that are neither seated in onshore UAE nor in the UAE’s financial free zones).

THE WHATS?

1. Laws and Regulations

Articles 52 to 57 of UAE Federal Law No. 6 of
2018 (Arbitration Law) govern the enforcement of arbitral awards seated onshore
in the UAE.

The enforcement of onshore seated arbitral awards by the onshore
courts of another emirate is dealt with by the Judicial Relations Law. Article
11 stipulates that an arbitral award is enforceable in the other emirates in
accordance with the rules and procedures regulated by legislation in force in
the UAE.

With respect to the recognition and enforcement of financial

free zone seated arbitral awards, the following are relevant (as applicable):

DIFC: Articles 42 to 44 of the DIFC Law No. 1 of 2008 (DIFC Arbitration Law) together with RDC 43.62 to 43.74 are relevant to enforcement of awards within the DIFC (wherever the seat of the award).
ADGM: Part 4 of the ADGM Arbitration Regulations 2015 (ADGM Arbitration Regulations) is relevant, as is Chapter 10 of the ADGM Court Regulations.

The procedure for enforcing arbitral awards seated in the DIFC by the Dubai onshore courts is set out in Article 7 of the Judicial Authority Law (and vice versa). RDC 45.18 to 45.24 set out the procedure to be followed in seeking to enforce an arbitral award ratified by the DIFC courts outside the DIFC in accordance with Article 7 of the Judicial Authority Law.

The substantive law and procedure for the enforcement of foreign arbitral awards is set out in Article 85 of the Executive Regulations.

With respect to the recognition and enforcement of foreign arbitral awards, the following are relevant (as applicable):

DIFC: Articles 42 to 44 of the DIFC Arbitration Law and RDC 43.61 to 43.74.
ADGM: Part 4 of the ADGM Arbitration Regulations. In addition, the provisions of Chapter 10 of the ADGM Court Regulations.

2. International Conventions/Agreements

The UAE is a party to the following treaties:

3. Definition Of An Arbitral Award

Onshore

Article 41 of the Arbitration Law prescribes the required form and contents of an arbitral award. An award to be recognised must:

Be in writing.
Be signed by the majority of all members of the tribunal.
State the grounds of the award (unless agreed otherwise by the parties, or where the law applicable to the arbitral proceedings does not require that the grounds of the award be stated).
Mention the names and addresses of the litigants, the names, addresses and nationalities of the arbitrators, the text of the arbitration agreement, a summary of the relief sought by the litigants, their arguments and documents and the operative text of the award, its reasons (if applicable), and the date and place of issuance.

Financial Free Zones

Article 38 of the DIFC Arbitration Law and Article 50 of the ADGM Arbitration Regulations set out the requirements as to the content and form of an arbitral award.

Article 38 of the DIFC Arbitration Law:

Form and contents of award

1) The award shall be made in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the Arbitral Tribunal shall suffice, provided that the reason for any omitted signature is stated.

2) The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under Article 37.

3) The award shall state its date and the Seat of the Arbitration as determined in accordance with Article 27(1). The award shall be deemed to have been made at the Seat of the Arbitration.

4) After the award is made, a copy signed by the arbitrators in accordance with paragraph (1) of this Article shall be delivered to each party.

5) The Arbitral Tribunal shall fix the costs of the Arbitration in its award. The term “costs” includes only:

(a) The fees of the Arbitral Tribunal to be stated separately as to each arbitrator;

(b) The properly incurred travel and other expenses incurred by the arbitrators;

(c) The costs of expert advice and of other assistance required by the Arbitral Tribunal;

(d) The travel and other expenses of witnesses to the extent such expenses are approved by the Arbitral Tribunal;

(e) Such other costs as are necessary for the conduct of the Arbitration, including those for meeting rooms, interpreters and transcription services;

(f) The costs for legal representation and assistance of the successful party if such costs were claimed during the Arbitration, and only to the extent that the Arbitral Tribunal determines that the amount of such costs is reasonable;

(g) Any fees and expenses of any arbitral institution or appointing authority.

THE HOWS?

Enforcement of an award

1. Domestic Awards

Arbitral awards must be ratified through the local courts. Therefore, the party seeking to enforce an award must apply to the court to have the award ratified. This involves filing a civil suit in the form of a claimant seeking ratification of the award in the Court of Appeal. The original award and any annexes must be filed with the application.

The application is then served on the defendant and the matter proceeds as a civil claim, with the defendant having an opportunity to respond.

2. Foreign Awards

The UAE is party to the different international treaties as mentioned before. Therefore, arbitral awards rendered by an arbitral tribunal in the UAE are enforceable (subject to the local laws) in jurisdictions that are parties to the above treaties.

In addition, the UAE has entered into certain bilateral treaties for judicial co-operation and enforcement of judgments with a number of countries, for example, with France and India.

The UAE is party to several international and bilateral treaties relating to, among other things, the enforcement of arbitral awards. Therefore, the enforcement of foreign arbitral awards in the UAE is subject to the applicable treaty(ies).

The 2019 Regulations issued under the Federal Civil Procedure Code provide that an application to enforce a foreign award must be made to an enforcement judge and that the judge is required to make a decision within three days. Before issuing the decision, the enforcement judge is required to verify that the:

UAE Courts do not have exclusive jurisdiction over the matter.
Judgment or order has been issued by an authorised court under the law of the relevant foreign jurisdiction.
Parties to the foreign proceedings have been summoned and represented.
Foreign judgment/order sought to be enforced is res judicata under the laws of the relevant foreign jurisdiction.
Foreign judgment/order sought to be enforced is not contrary to judgment or order of a UAE court nor to the morals and public order of the UAE.

Additionally, the subject matter of the foreign arbitral award must be arbitrable according to the laws of the UAE, and the award must be enforceable in the jurisdiction in which it was issued, to seek enforcement in the UAE. The Arbitration Law provides that the foregoing is without prejudice to the provisions of any applicable treaty provisions.

In addition, if the award has been rendered outside the UAE it must:

Undergo the process of legalisation, which involves:
- the notarisation and consularisation of the award at the level of the UAE Embassy in the country in which it is issued; and
- further authentication of the award by the Ministries of Foreign Affairs and Justice in the UAE.
Be translated (where required).

The applicable legislation does not provide for a time limit to enforce foreign awards in the UAE.

The Arbitration Law provides that an order for the ratification and enforcement of an award must be made within 60 days of the application being made by the party, unless the court finds that the award should be set aside.

In theory, enforcement of foreign awards takes less time as the application is made directly to the enforcement judge without the requirement for ratification proceedings. However, the process of attestation of a foreign award may take some time depending on the foreign country involved.

Please contact our specialised team for more information about the enforcement of domestic and foreign Arbitral Awards in the UAE.