UAE Law and Practice Contributed by: Antonios Dimitracopoulos and Martin Khoshdel, BSA Law
12.2 Enforcement Procedure The legal requirements for the recognition of an arbi - tral award differ depending on whether the arbitral awards are domestic or foreign. Foreign Arbitral Awards The enforcement of foreign arbitral awards by the UAE federal courts or the DIFC courts is generally straight - forward and in general compliance with the New York Convention. The location of the assets against which the arbi - tral award is to be enforced will ultimately determine the court in which the enforcement proceedings are brought. Domestic Arbitral Awards Prior to the introduction of the UAE Arbitration Law, it was commonplace for arbitral awards to be nullified for very idiosyncratic reasons native to the UAE. The recent introduction of the UAE Arbitration Law has overcome some but not all of the possible reasons for award nullification that existed under the previous legislation. Article 4 of the UAE Arbitration Law may continue to expose arbitral awards to the risk of nullification. The grounds for such nullification could be that a natu - ral person (or a representative thereof) entered into an agreement to arbitrate when they were not legally competent to do so. An agreement to arbitrate entered into by such individuals (or a representative thereof), would be rendered void. The UAE Arbitration Law also retains certain proce - dural requirements that may affect the arbitral pro - cess. Article 61 of the UAE Civil Procedural Code, for example, requires that “[t]he attorney may not [...] go to arbitration[,] abandon litigation […] or undertake any other action for which the law requires special authorisation”. The requirement for specific powers of attorney for those other than the “general manager” named in the company’s trade licence appears to have survived the introduction of the UAE Arbitration Law.
Article 41 of the UAE Arbitration Law prescribes the criteria for an arbitral award, which includes the requirement that the nationalities of the arbitrators are stated in the final award. One very positive provision of Article 41 confirms that an arbitral award will be deemed to have been signed at the seat of the arbitra - tion, regardless of where it was actually signed. With regard to the reasons for an award, Article 41 (4) of the UAE Arbitration Law, Article 38 (2) of the DIFC Arbitration Law, Article 55 (2) of the ADGM Regulations, Article 34.4 (g) of the DIAC Rules, and Article 41.3 of the ArbitrateAD Rules all provide that the award must be reasoned unless the parties agree otherwise. Approach of Courts Article 44 (2) of the DIFC Arbitration Law expressly confers on the DIFC court the discretion to adjourn its decision on recognition and enforcement if an applica - tion has been made for the setting aside or suspen - sion of an arbitral award to the court of the seat of arbitration, with the responding party to pay security. Section 62 (1)(c) of the ADGM Arbitration Regulations has a similar provision. Article 56 (1) of the Federal Arbitration Law confers a discretion on the court to stay execution of the award if it is “based on serious grounds”. This can be inter - preted to include an application to set aside the award to the court of the seat of arbitration. The courts are likely to take a cautious approach and await determi - nation of the court of the seat of arbitration. State Immunity Article 242 of Federal Decree Law No 4 of 2022 Prom - ulgating the Civil Procedure Code provides that public property owned by the State or any of the emirates may not be attached. This means that –although there is no specific defence of sovereign immunity – in reali - ty the UAE is immune from having any award executed against public property owned by it or, in the case of an individual emirate as a respondent, against any public property owned by the emirate in question. At the emirate level in Dubai, Article 3 of Dubai Law No 3 of 1996 Concerning Government Claims provides
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