Arbitration and Dispute Resolution in the UAE

Arbitration in the UAE is a way of resolving a dispute outside the courts. The parties agree to it in their contract or after the dispute arises, and it ends in a binding award that can only be enforced once the competent court has ratified it. Alongside it, mediation and conciliation lead to a settlement signed by both parties that can then be enforced. The question most people with a dispute ask is not what arbitration is, but: is the arbitration clause in my contract valid? Where will my dispute be heard? And how do I enforce or challenge the arbitral award?

This guide answers those questions in the order a dispute unfolds: drafting the arbitration clause, raising it before the courts, forming the tribunal and running the proceedings, then ratifying or annulling the award, enforcing foreign arbitral awards, and mediation and conciliation. The arbitration lawyers at AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS in Dubai act for companies and individuals at every one of these stages, in Dubai and across the other emirates.

All our specialist articles in this field are gathered on the Arbitration and Alternative Dispute Resolution category page.

What is arbitration in the UAE, and when is it the right choice?

Arbitration in the UAE is governed by a dedicated federal law and rests on three pillars: a written arbitration agreement, an independent tribunal chosen by the parties or appointed as agreed, and a binding award with the force of res judicata. Businesses choose commercial arbitration for practical reasons: confidentiality, an arbitrator who specialises in construction, finance or trade, control over the language of the proceedings, and an award that is easier to enforce outside the country.

On the other hand, arbitration can cost more in small disputes, and there is no appeal on the merits: the award is final and can only be challenged through an annulment action on limited grounds. An arbitration lawyer therefore weighs the value and nature of the dispute before advising for arbitration or for the courts.

The arbitration clause: what should it include?

Most arbitration disputes begin with a clause written in a hurry. A good arbitration clause names the institution or rules, the number of arbitrators, the seat, the language and the governing law. The arbitration agreement must be in writing, and it counts as written if it appears in exchanged correspondence or in an express reference to a document that contains it.

Common mistakes include a clause that gives jurisdiction to both the courts and arbitration, a clause naming an institution that no longer exists, and a clause signed for a company by someone without authority to agree to arbitration. Any of these can turn into a separate fight over jurisdiction before the real claim is even heard.

I have been sued in court, but the contract has an arbitration clause. What now?

An arbitration clause does not stop the other side from filing a court case, but it gives you an important defence: if you rely on the clause before making any request or defence on the merits, the court will rule the case inadmissible. If you argue the merits first, that may be treated as a waiver of arbitration. The first written submission in the case is therefore the most critical moment in any arbitration file.

The reverse is also true: if you believe the arbitration clause is invalid or does not cover your dispute, an arbitration lawyer can assess your chances of staying in court before the case is filed.

Arbitration centres in the UAE: institutional and ad hoc arbitration

Institutional arbitration is run by an arbitration centre under its rules. The main centres in the UAE are the Dubai International Arbitration Centre (DIAC), the Abu Dhabi International Arbitration Centre (arbitrateAD) and the Sharjah International Commercial Arbitration Centre (Tahkeem). In ad hoc arbitration, the parties and the tribunal run the case themselves under the law, without an institution.

Since 2021, disputes referred to the Emirates Maritime Arbitration Centre or the DIFC-LCIA Arbitration Centre have passed to DIAC after both were abolished, so anyone holding an older contract that names either of them should have the clause reviewed before filing a request for arbitration. Arbitrations seated in the DIFC or ADGM have their own category: DIFC and ADGM.

Forming the tribunal and challenging an arbitrator

The tribunal consists of a sole arbitrator or an odd number of arbitrators; usually each party appoints one and the two appoint the chair. If the parties cannot agree, the institution or the competent court makes the appointment. Every arbitrator must disclose any circumstance that may raise doubts about their impartiality or independence, and a party may apply to challenge an arbitrator within a short period after learning of the ground, or the right is lost.

How the arbitration proceeds: from the request to the hearings

Arbitration begins with a request setting out the dispute and the claims, followed by the answer and then a timetable for submissions, documents, witnesses and technical expertise, which is decisive in construction disputes. Hearings may be held in person or remotely, since the latest amendment to the Arbitration Law expressly allows electronic hearings.

You do not have to wait for the award to protect your position: interim or precautionary measures can be requested from the tribunal or from the competent court, such as a precautionary attachment over the other party’s assets, even before the arbitration starts.

The award is in my favour: how do I enforce it?

An arbitral award is not enforceable on its own. An application to ratify the award and append the enforcement formula is filed with the competent Court of Appeal, and an enforcement file is then opened before the execution judge with the usual tools: attachment of bank accounts, property and vehicles, and a travel ban where the conditions are met.

The award is against me: the annulment action

An arbitral award cannot be appealed on its merits; the only route is an action to annul the award, filed within a short period set by law from notification of the award. The grounds for annulment are exhaustive, chief among them: no arbitration agreement, or an agreement that is void or has expired; lack of capacity of a party; breach of the right of defence or improper notice; exclusion of the law the parties chose; irregular composition of the tribunal; the award going beyond the scope of the arbitration agreement; and breach of public order.

A tribunal’s error in assessing the facts or the evidence is not, in itself, a ground for annulment. Many overlook this and build annulment actions on arguments the court will not accept.

Enforcing a foreign arbitral award in the UAE

The UAE acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 2006. A foreign award is enforced by application to the execution judge, together with the original award, the arbitration agreement and a certified translation, and enforcement can only be refused on the limited grounds set out in the Convention. The same framework allows awards made in the UAE to be enforced in other member states.

Mediation and conciliation: settling without an award

A dedicated federal law regulates mediation and conciliation in civil and commercial disputes in two forms: judicial mediation referred by the court, and non-judicial mediation agreed by the parties before an accredited mediator. The settlement agreement is signed by both parties and the mediator, then ratified by the court, at which point it becomes an enforceable instrument.

Conciliation and settlement centres attached to the courts, including the Centre for Amicable Settlement of Disputes in Dubai, also handle many claims before they are registered. Successful mediation saves time and cost and preserves the business relationship between the parties.

Which disputes most often go to arbitration?

Arbitration is common in construction and contracting agreements and FIDIC forms, in disputes between partners and in family businesses, in supply, import and distribution contracts, and in real estate development projects. Each calls for different technical expertise and documents.

What cannot be referred to arbitration?

Arbitration is not permitted in matters that cannot be settled by compromise, such as personal status matters relating to parentage and divorce, criminal matters, and anything touching public order. Disputes that the law assigns to a specific body, such as certain tenancy and labour disputes, also need careful review before arbitration is agreed.

Arbitration before the Dubai Courts and DIAC

If the seat of arbitration is in Dubai outside the DIFC, the Dubai Courts have jurisdiction to ratify the award, hear annulment actions and enforce it, and most institutional arbitration there takes place before the Dubai International Arbitration Centre. An arbitration lawyer in Dubai follows the file from drafting the clause and filing the request with the centre, through ratification or annulment before the Dubai Courts, to enforcement.

What should you prepare before speaking to an arbitration lawyer?

How can you check that a lawyer is licensed?

Before instructing any lawyer in an arbitration matter, check their registration and licence in the Lawyers and Legal Consultants Directory of the Government of Dubai Legal Affairs Department. The legal profession is regulated by Federal Decree-Law No. 34 of 2022 regulating the Legal Profession and Legal Consultancy.

Legal references

• Federal Law No. 6 of 2018 on Arbitration, as amended by Federal Decree-Law No. 15 of 2023

• Federal Decree-Law No. 40 of 2023 on Mediation and Conciliation in Civil and Commercial Disputes

• Federal Decree-Law No. 42 of 2022 promulgating the Civil Procedure Law

• Federal Decree No. 43 of 2006 on the UAE’s accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

• Decree No. 34 of 2021 of the Ruler of Dubai concerning the Dubai International Arbitration Centre

• Federal Decree-Law No. 34 of 2022 regulating the Legal Profession and Legal Consultancy

Frequently asked questions about arbitration in the UAE