A new landscape for commercial and maritime arbitration in Dubai

A new landscape for commercial and maritime arbitration in Dubai

Ruler announces a new decree anointing the Dubai International Arbitration Centre

Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum recently announced the merger of Dubai International Financial Centre (DIFC) Arbitration Institute, the centre that administers the DIFC–London Court of International Arbitration (LCIA) arbitrations, and the Emirates Maritime Arbitration Centre (EMAC).

The move has paved the way for the Dubai International Arbitration Center (DIAC) to act as the sole dispute-resolution seat in the emirate.

The consolidation of the three centres into one is aimed at reinforcing Dubai's status as an international arbitration hub for Africa and the Middle East and at attracting foreign investments. 

Enrico Vergani, a partner at Italian law firm BonelliErede and leader of the shipping and transport focus team; and Lorenzo Melchionda, a Dubai-based local partner and member of the international arbitration focus team, will assess the impact of the decision to consolidate the EMAC into a new overarching arbitral body.

The first step in the implementation of this consolidation is to transfer the DIFC–LCIA and EMAC assets and experienced personnel to the DIAC, headquartered in Dubai. With a branch in the DIFC, it will be operated by a board that will oversee its activities. 

A court will assist the board by elaborating rules and policies and will act as appointing and administering body in arbitration and conciliation proceedings.

The creation of a separate body akin to the International Criminal Court (ICC) Court is an important development, as it will allow the DIAC's board and court to focus on their respective tasks. The members of these bodies will be chosen among experienced and highly qualified local and international professionals.

With the new changes, arbitration hearings can be held anywhere, including remotely by way of modern technology. The new DIAC rules will include 'emergency arbitration' (a fast-track procedure to obtain urgent interim relief before an arbitral tribunal is constituted) and award scrutiny, both under the DIAC court's supervision.

If the parties do not agree on the seat of the arbitration, the DIFC will be the seat by default and the English-language, specialized business courts in the free zone will oversee and support DIAC arbitrations.

Meanwhile, the ongoing arbitrations will continue under the supervision of the new DIAC, which will apply the DIFC–LCIA or EMAC rules. Thus, the applicable rules will remain the same, but the administering authority will change.

The DIAC had proposed that the DIFC–LCIA arbitrations be administered by their former staff. Hence, agreements providing for arbitration under the auspices of DIFC–LCIA or EMAC will remain effective, but the new DIAC will replace the three centres in administering future cases.