March 18th, 2024 Legal Updates

Navigating New Horizons: the Abu Dhabi Arbitration Centre’s new Arbitration Rules

The Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”) marks a significant transformation in Abu Dhabi’s arbitration landscape.

Effective from February 1, 2024, the Arbitration Rules (“Arbitration Rules 2024”) sets the ground for a new era, replacing the 2013 ADCCAC Arbitration Rules. Our article delves into key facets of the Arbitration Rules 2024 (“Rules”), shedding light on their implications for dispute resolution in the region.

The Abu Dhabi Arbitration Centre, established to facilitate arbitration in the Emirate of Abu Dhabi, plays a crucial role in providing a platform for parties to resolve their disputes in a neutral and impartial environment.

Digitalization and Efficiency

One notable aspect of the updated rules is the emphasis on digitalization. The use of technology in arbitration has become increasingly important, especially considering the global shift towards remote proceedings. The new rules outline procedures for electronic submissions, virtual hearings, and the use of online platforms for case management.

Case Management Techniques

Efficient case management is vital for the success of any arbitration process. The new Rules introduce innovative case management techniques, providing the arbitral tribunal with more tools to streamline proceedings and avoid unnecessary delays.

Confidentiality and Transparency

Balancing confidentiality and transparency is often a delicate task in arbitration. The updated Rules clarify the scope and limits of confidentiality while also promoting transparency in certain aspects of the arbitration process to enhance public trust in the system.

Role of the Court of Arbitration

The arbitration Rules address the process of appointing arbitrators, ensuring impartiality and independence. They also specify the qualifications and expertise required for individuals to serve as arbitrators, reflecting the diverse nature of disputes that may arise.

A notable feature of ADCCAC is the establishment of an independent Court of Arbitration. Tasked with supervising arbitrations under the Arbitration Rules 2024, this Court plays a pivotal role in appointing arbitrators, handling challenges, and scrutinizing arbitral awards. Article 8(1) underscores the Court’s authority in resolving challenges to arbitration agreements pre-constitution of the Tribunal, ensuring a preliminary determination of jurisdiction.

The proceedings

Further, Article 7 of the Arbitration Rules 2024, governs the initiation of proceedings. The claimant files a Request for Arbitration, triggering a 21-day window for the respondent to submit an answer. Counterclaims, if any, prompt a 21-day period for the claimant to respond.

Arbitral Proceedings

It is noteworthy to highlight that Articles 20 to 33 govern proceedings, aligning with international rules. Further, Article 30 restricts new claims or counterclaims after the submission of Statements of Claim and Defence, ensuring procedural efficiency.

On another hand, Articles 34 to 36 empower the Tribunal to order preliminary measures, facilitate expedited proceedings, and enable emergency arbitration for urgent relief. Notably, expedited proceedings apply to claims exceeding AED 9,000,000.

The inclusion of provisions related to emergency arbitrator proceedings is another significant development. This allows parties to seek urgent interim relief even before the constitution of the arbitral tribunal, ensuring that critical issues can be addressed promptly.

Award and Scrutiny

We note that Article 38 imposes a nine-month deadline for the issuance of final awards, with potential extensions. Furthermore, Article 40 introduces scrutiny by the Court, enhancing award quality. As for Articles 42 and 43 they outline timelines for correction, interpretation, and additional awards.

Multiple Parties, Multiple Contracts, Joinder, and Consolidation

Diverging from ADCCAC Rules, the Arbitration Rules 2024 explicitly permit multi-party and multi-contract arbitrations, joinder, and consolidation. Article 10 facilitates a single arbitration claim stemming from multiple contracts, with the Court deciding on efficiency and expeditiousness. Joinder (Article 11) and consolidation (Article 12) provisions empower the Court to admit additional parties and consolidate arbitrations for enhanced efficiency.

The Arbitral Tribunal

We note that the Rules insist on the principle of maintaining party autonomy, whereas we examined that Article 13 addresses arbitrator appointments. The Court may appoint arbitrators when parties only fail to nominate within the stipulated time. Further, in order to emphasize diversity, Article 13(9) mandates a sole arbitrator or tribunal president of a different nationality, unless agreed otherwise. Nonetheless, Article 15 underscores arbitrators’ duty of independence, disclosure, and availability confirmation.

Secretary of the Arbitral Tribunal

As part of welcomed changes and new developments, the Rules set under Article 19 explicitly the appointment of arbitral secretaries, clarifying their duties. This provision enhances clarity compared to old rules, where ambiguity often surrounded the appointment authority for arbitral secretaries.

Seat and Language of Arbitration

Article 22 designates Abu Dhabi Global Market (“ADGM”) as the default seat, emphasizing that the reference to the place of arbitration equates to the seat. However, the absence of a default language (Article 23) raises questions about the factors influencing the Case Management Office’s initial language determination.

Implications for the Business Community

The changes are designed to make arbitration in Abu Dhabi more attractive and user-friendly, potentially leading to increased confidence in the resolution process and making the Emirate a preferred seat for arbitration.

Other takeaways

The Arbitration Rules 2024 incorporate provisions for:

  • Summarily dismissing claims with no legal merit (Article 45).
  • Disclosure of third-party funding (Article 48).
  • Tribunal’s power to decide costs, including lawyer-client fees (Article 50(6)).

The Arbitration Rules 2024 signify a monumental leap forward for Abu Dhabi’s arbitration landscape. Aligned with UNCITRAL model rules, they address gaps in previous rules, ensuring fairness, efficiency, and enforceability.

Authors: Youssef Al Amly, Partner and Rana Moustafa, Associate.