UAE Law and Practice Contributed by: Farida Safwat, Elham Mobini and Ramy George, NHB Legal
One challenge for the UAE courts in the future will be applying established legal principles to fit disputes involving new and rapidly evolving technologies. 3. Arbitration in Insurance Disputes 3.1 Recognition of Arbitration Clauses Onshore UAE courts respect arbitration clauses in principle but apply a strict, formal test that leaves lit- tle room for drafting errors or signature irregularities. Article 958 (4) of the updated UAE Civil Transactions Law (Federal Decree-Law No 25 of 2025) renders an arbitration clause in an insurance policy void unless it appears in a special agreement separate from the policy’s general printed conditions, a rule the Dubai Court of Cassation reaffirmed in 2024, striking down a clause found only in a policy’s standard terms. Separately, under Article 4 of Federal Law No 6 of 2018 on Arbitration, whoever signs an arbitration clause, whether representing the insured or the insurer, must have express authority to bind that party to arbitra- tion. A signature by someone lacking demonstrable authority, such as a broker acting outside its man- date or a company representative without the power to conclude arbitration agreements, is an independ- ent ground on which onshore courts have invalidated such clauses. Similarly, the Dubai International Financial Centre (DIFC) courts generally uphold arbitration clauses in insurance policies, provided they are valid under the governing law, satisfy the UAE Arbitration Law’s for- mal requirements, and do not breach any mandatory provisions of UAE law. Where these conditions are met, the DIFC courts will ordinarily uphold arbitration clauses. 3.2 Enforcement of Arbitral Awards Enforcement follows different tracks depending on the seat and nationality of the award. Domestic awards are confirmed under Article 55 of Federal Law No 6 of 2018: a party applies to the Court of Appeal, and enforcement generally proceeds even amid a pend- ing set-aside challenge, in the absence of a stay for good cause.
Foreign awards, including from New York Convention states, are enforced through the execution-judge pro- cedure under Articles 222–223 of the Civil Procedure Law (Federal Decree-Law No 42 of 2022 – as amend- ed), read with the UAE’s obligations under the 1958 New York Convention, applied since 2006. In both tracks, review is deliberately narrow. The Abu Dhabi Court of Cassation confirmed in 2024 that grounds under Article 53 are exhaustive and exclude reconsidering the tribunal’s evidentiary findings. Barriers therefore arise not from merits review, but from limited statutory grounds: • the absence, invalidity or expiry of the arbitration agreement; • the lack of capacity or authority to conclude it; • denial of due process; • failure to apply the agreed governing law; • improper tribunal constitution; • serious procedural irregularities or late award issu- ance; • the tribunal exceeding its mandate; and • the non-arbitrability or breach of public order, raised by the court itself. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration is most often used in commercial and spe- ciality lines – marine, aviation, energy, construction, and reinsurance – where technical complexity favours arbitrators with sector expertise, and confidentiality is genuinely valued. It is less commonly used in retail or consumer-facing lines, which are instead channelled through Sanadak, the independent ombudsman for certain consumer complaints against insurers and financial institutions, rather than arbitration or the ordinary courts. On confidentiality, the UAE Arbitration Law provides that hearings are held in private unless otherwise agreed, and awards are confidential and may not be published without written consent – a protection extended to the proceedings themselves following amendments introduced by Federal Decree-Law No 15 of 2023.
272 I NSURANCE L I T IGATI O N 2026
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