Arbitration is the most popular formal dispute mechanism to resolve construction and engineering disputes
The benefits of arbitration when compared with litigation can include speed, cost, procedural flexibility, sector specific expertise, confidentiality, neutrality and finality. However, obtaining an arbitral award in your favour is seldom the end of the process in obtaining the relief to which you are entitled.
In the MENA region, the losing party will rarely comply with an arbitral award against it. As a result, the successful party, or award creditor ("Award Creditor"), will have to proceed to enforce the arbitral award against the losing party, or award debtor ("Award Debtor"), in order to obtain the relief to which it is entitled.
The enforceability of arbitral awards in jurisdictions other than the one in which the award was rendered is governed by international treaties, the most prevalent being the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention").
This article sets out some of the difficulties an Award Creditor may face when attempting to enforce an arbitral award in the GCC with particular focus on the United Arab Emirates, Qatar and Oman.
Practical Points:
- Check that signatories to Contracts, Amendment Agreements, Addenda and Settlement Agreements have a Power of Attorney on behalf of the company which they represent that specifically entitles them to agree to arbitration.
- When drafting Arbitration Agreements, consider where the assets which you are likely to enforce against are based and whether injunctive relief, which is more readily available in the DIFC Courts, may be required.
- The certainty offered by the DIFC Courts on the issue of enforcement of arbitral awards in the UAE merits strong consideration when considering the seat of arbitration.
- Whilst Qatar has been historically negative towards arbitration, and particularly the enforcement of foreign arbitral awards, there have been some significant positive judgments by the Qatar Court of Cassation in recent years.
- Oman remains a relatively pro-arbitration jurisdiction and maintains a positive stance with regard to the enforcement of both domestic and foreign arbitral awards.
[1] Article 215 UAE Federal Law No. 11 of 1992 (the "UAE Civil Procedure Code")
[2] Article 159 UAE Civil Procedure Code
[3] Article 216 UAE Civil Procedure Code
[4] Article 44 of DIFC Law No. 1 of 2008
[5] Dubai Law No. 12 of 2004 as amended by Dubai Law No. 16 of 2011
[6] Macsteel International v Airmech (Dubai) LLC 132/2012 Al Reyami Group LLC v BTI Befestigungstechnik GmbH & Co KG 434/2014
[7] CCI v. Ministry of Irrigation of the Democratic Republic of the Sudan 156/2013
[8] Case No. 384 of 2016
[9] The DIFC is a Common Law English language jurisdiction within Dubai whose court system is largely modelled on the English Commercial Court
[10] CA 007/2015, DNB Bank ASA -v- (1) Gulf Eyadah Corporation (2) Gulf Navigation Holdings Pjsc
[11] ARB 002/2013, case details formerly redacted as (1) X1, (2) X2 -v- (1) Y1, (2) Y2, 29 July 2015
[12] Case No. 631 / 2006
[13] Case No. 2216 / 2013
[14] No. 173 / 2016
[15] No. 45 and 49 of 2014