UNITED ARAB EMRITES Law and Practice Contributed by: Ali Dakhlallah, Karen Seif, Matthew Page and William Prasifka, Habib Al Mulla & Partners
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods In the United Arab Emirates (UAE), commercial dis- putes are resolved through a well-developed mix of court-based and alternate dispute resolution (ADR) mechanisms. The UAE’s positioning as a global busi- ness hub, in particular Dubai and Abu Dhabi, has led to a sophisticated, business-friendly dispute resolu- tion framework combining civil courts, common law free zone courts, international arbitration and media- tion. Litigation in Onshore Courts Commercial litigation is commonly used as a method of dispute resolution, especially when no ADR clause exists or when immediate court orders are required. These are formal procedures that have been codified; they follow a three-tier system and have jurisdiction over many kinds of disputes. Dispute Resolution in Offshore Courts Within the UAE, there are two common law courts: the Dubai International Financial Centre (DIFC) courts and the Abu Dhabi Global Markets (ADGM) courts, situated in Dubai and Abu Dhabi, respectively. These courts offer judgments based on English common law principles. This method of dispute resolution is com- monly used when cases are complex, multi-jurisdic- tional and of high value. Arbitration Arbitration is the most popular means of dispute resolution for international, high-value commercial disputes in the UAE. It is governed federally by the 2018 UAE Arbitration Law, which is based off the UNCITRAL Model Law. Significant arbitral institu- tions include the Dubai International Arbitration Cen- tre (DIAC) and the Abu Dhabi International Arbitration Centre (arbitrateAD). Mediation and Conciliation Mediation is a voluntary, confidential process where a neutral mediator assists parties in reaching a set- tlement. Conciliation is similar to mediation; how- ever, the conciliator may actively propose settlement terms. Both mediation and conciliation are governed by Federal Decree Law No 40 of 2023. The mediation
process is supported by court-annexed and private mediation centres. These are faster and more cost- effective in relation to litigation and are non-binding unless a settlement is reached. 1.2 Choice of Dispute Resolution Method Litigation in Onshore Courts Litigation remains widely used for domestic commer- cial disputes, especially in cases where no arbitra- tion clause exists or where the law mandates court jurisdiction. It is common for agency, regulatory and low- to mid-value commercial claims. It is less popular for cross-border disputes due to language, formality and duration concerns. Dispute Resolution in Offshore Courts The DIFC and ADGM courts are highly popular for complex, international and financial commercial dis- putes. These courts attract multinational corporations that require proceedings to be conducted in English and according to the common law system. They are especially attractive for those seeking predictability and judicial expertise. These courts are commonly used in shareholder-, banking- and fintech-related matters. Arbitration Arbitration is the most popular mechanism in the UAE, particularly for high-value, international commercial disputes. It is especially prevalent in construction, infrastructure, energy, maritime and cross-border dis- putes. What makes arbitration stand out as a form of dispute resolution is that it allows for party autonomy, neutrality and confidentiality in proceedings, and its arbitral awards can be enforceable in various jurisdic- tions. Mediation and Conciliation Mediation and conciliation are increasingly used as early-stage dispute resolution mechanisms and are encouraged by legislation and institutions. They are particularly favoured in relationship-driven commer- cial disputes such as partnerships and SME matters. Their popularity rests on speed, confidentiality and cost efficiency rather than legal finality.
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