Arbitration in business disputes in UAE is increasingly becoming preferred over traditional litigation.
As a growing international trade hub, the UAE provides businesses with a legal environment that fosters quick, fair, and effective dispute resolution.
This article examines the workings of arbitration in the UAE, offers insights into key institutions, and explains how our law firm can support businesses involved in arbitration in 2025.
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What is Arbitration in Business Disputes in UAE?
Arbitration is a form of alternative dispute resolution (ADR) where parties in a dispute agree to submit their case to one or more impartial arbitrators instead of going through the court system.
The arbitrator(s) hear the evidence and make a binding decision, known as an arbitral award.
The process is typically faster, more flexible, and often less expensive than traditional litigation.
Arbitration can take place in the UAE or internationally, depending on the agreement of the parties involved.
Arbitration offers several advantages over traditional court litigation, particularly for international business disputes. Let’s look at a few examples:
Faster and More Cost-Effective
Consider a scenario where two international companies have a commercial dispute over a contract in the UAE.
If they opt for arbitration, the process could be completed in months, as opposed to the prolonged court procedures that can take years.
Arbitration eliminates the need for long court delays, offering quicker resolutions.
Confidentiality in Arbitration
Let’s say a technology company in the UAE has a dispute with a supplier regarding a non-disclosure agreement.
Through arbitration, the case details, including sensitive business information, remain confidential, unlike court cases, which are typically public.
Avoiding Complexities with International Law
International businesses often face challenges with differing legal systems.
For example, a European company in the UAE might face complications if it were to litigate in a local court, where legal processes are in Arabic.
Arbitration, however, allows the parties to choose a common language (like English) for proceedings, making the process smoother.
Predictability of Outcomes
In the UAE, court judgments are not based on precedents, which can make outcomes uncertain.
A company in the construction industry, for instance, might prefer arbitration because the decision will be made by an experienced arbitrator specialized in construction law, offering more certainty about the outcome.
Arbitration Legal Framework in UAE
Arbitration in the UAE is governed by Federal Law No. 6 of 2018, which replaces parts of the older Civil Procedures Law No. 11 of 1992.
For example, a construction dispute between two firms in the UAE, both governed by UAE law, would fall under the 2018 arbitration law.
This law applies to arbitrations conducted within the UAE unless the parties agree otherwise.
If the businesses involved choose to arbitrate abroad, the law still applies if they decide to use it as the governing law, ensuring consistency and legal clarity.
Additionally, specific parts of the Civil Procedure Code, such as Articles 235-243, handle issues like the execution of foreign judgments.
This becomes relevant when an international company wins an arbitration case in the UAE and needs to enforce the award in another country.
The UAE boasts several well-established institutions for arbitration, offering businesses reliable venues for resolving disputes.
Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC)
Established in 1993, ADCCAC specializes in handling commercial trade disputes.
For example, a foreign business may choose ADCCAC for resolving a dispute over contract terms with a local UAE supplier.
If the parties agree, the arbitration can be conducted in English, even though Arabic is the default language.
Dubai International Arbitration Centre (DIAC)
DIAC is known for its efficient handling of arbitration cases.
For instance, if an international shipping company faces a contractual dispute with a UAE-based port operator, DIAC would be a suitable forum for resolving the matter.
The DIAC Arbitration Rules, 2022 ensure that cases are resolved quickly and fairly.
International Islamic Centre for Reconciliation and Arbitration (IICRA)
IICRA specializes in disputes involving Islamic law, making it a suitable choice for businesses involved in Islamic finance.
For example, if a UAE-based bank is in dispute with a client over a Sharia-compliant loan, IICRA would provide a platform for resolving the matter according to Islamic principles.
The parties must agree to IICRA’s jurisdiction beforehand.
Sharjah International Commercial Arbitration Centre (Tahkeem)
Tahkeem offers a range of arbitration services, including tools like fee calculators and arbitrator registration.
A construction firm in Sharjah might use Tahkeem to settle a dispute over a construction contract, benefiting from the center’s streamlined arbitration process.
Legal Services for Commercial Disagreement Arbitration in UAE
Our law firm offers a comprehensive range of legal services to assist clients involved in arbitration in business disputes in UAE.
Here are some examples of how we can help:
Drafting and Reviewing Arbitration Clauses
For example, suppose a real estate developer in the UAE enters into a contract with an international investor.
In that case, our law firm in UAE can help ensure that the contract includes a drafted arbitration clause.
This clause will specify both the arbitration institution and the applicable governing laws.
Representing Clients in Arbitration
Suppose a multinational company faces a commercial dispute with a local supplier over a breach of contract.
In that case, we represent them in proceedings at institutions like DIAC or ADCCAC, ensuring their interests are effectively advocated for.
Advising on the Applicability of UAE Arbitration Laws
A foreign investor might need guidance on whether arbitration in business disputes in UAE applies to international contracts.
We provide detailed legal advice on how the law impacts their situation.
Enforcing Arbitral Awards
When a UAE-based manufacturer wins an arbitration case and needs to enforce the award in another jurisdiction, our law firm ensures smooth enforcement across borders.
Challenging or Defending Arbitration Awards
If a company wishes to challenge an arbitral award due to procedural errors or other reasons, we offer expert advice and representation.
For instance, we can help a company contest an award if they believe the arbitrator made an error in interpreting the law.
Assisting with Mediation and Conciliation
We also guide businesses through mediation, which might be the first step before formal arbitration.
A company in the UAE might prefer mediation for smaller disputes, where a conciliator helps them reach a non-binding resolution before opting for formal arbitration.
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FAQs about UAE Arbitration for Corporate Disputes
Arbitration in business disputes in UAE provides a faster, more efficient alternative to traditional court proceedings.
With strong legal frameworks and world-class arbitration institutions, businesses can confidently resolve their issues in a fair and private manner.
Our law firm specializes in providing expert legal services related to arbitration, ensuring that your business interests are fully protected throughout the arbitration process.
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A law graduate and legal writer focusing on UAE law, he became known for his ability to clarify complex legal concepts through his writings. His work simplifies the intricacies of the legal landscape in the Emirates, helping both locals and expatriates navigate their legal concerns.
