Successfully Arbitrating Disputes

Most international corporations in the region choose Dubai as the main seat of arbitration.
November 21, 2023 by
Eduard Nedelcu

While the UAE provides some of the best and the most lucrative business opportunities to entrepreneurs all over the world, such opportunities come with their own set of disputes between employees, competitors and other corporate entities. Usually, mediation and negotiation techniques help in such matters. However, in disputes where mediation and negotiation techniques do not work, arbitration is often the most effective option being one of the less expensive ways to settle a dispute between parties.

A good legal team has to analyse the arbitration clause, which is part of the contract, and present all possible options to their clients, explaining what each option entails.

Eduard P. Nedelcu, Head of Arbitration, Al Safar and Partners

Arbitration is used as the major platform in settling real estate disputes. Depending on the jurisdiction, the disputes could be ventured either under DIAC following the UAE laws or DIFC-LCIA, following the English laws. The language of the proceedings can be at the choice of the parties, with English as the preferred language of arbitration. Many centres at the request of the parties are also able to provide arbitrators that speak the native language of the parties involved.

Due to COVID-19, there have been a lot of disputes between contractors and subcontractors with mediation and arbitration being used as a peaceful means of settlement.

The oil sector and its related activities, the parties usually prefer arbitration in their agreements to maintain the confidentiality and settle the disputes out of courts as the arbitral awards are final and binding and they are not to be contested in the court.

The financial institutions including currency trading and financial instruments opt to include in their contracts all ADR mechanisms: negotiations, mediation and arbitration, the latter being ideal due to the enforceability and confidentiality at the same time.

The investors and the investment-related agreements, whether the investment takes place in the corporate world or the real estate sector, arbitration is the favourite form of dispute resolution to ensure the confidentiality of the investors, while the proceedings are in compliance with the IBA guidelines.

It is worth mentioning that ADCAC (Abu Dhabi Arbitration Centre) is the pioneer, being not just cost effective but delivering the awards in a timely fashion, thereby concluding the disputes between the parties faster than expected.

Considering Dubai as the hub of the Middle East, most of the international corporations are choosing Dubai as the main seat of arbitration, showing a lot of trust in the UAE legal system and its practices, aimed at making investors feel at home.

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