New arbitrateAD Rules

Following the establishment of the Abu Dhabi International Arbitration Centre (branded as “arbitrateAD”) (as reported here), arbitrateAD’s new arbitration rules were published and came into effect on 1 February 2024 (“New Rules”). The New Rules (available here) replace the existing rules of the Abu Dhabi Commercial Conciliation and Arbitration Centre (“ADCCAC”) and are anticipated to provide a more efficient and updated arbitration process, aligned with international standards.

A summary of the key points to note in the New Rules is set out below.

Transition to the New Rules

The New Rules are applicable to arbitrations commenced on or after 1 February 2024 where the parties’ arbitration agreement provides either for the New Rules or the previous ADCCAC rules to be applied.^[1] However, in respect of arbitration agreements that refer to the ADCCAC Rules, the provisions of the New Rules concerning the appointment of emergency arbitrators and expedited proceedings will only be applicable if expressly agreed by the parties.^[2] Ongoing arbitrations administered under the previous ADCCAC rules will continue to be governed by those rules.^[3]

Seat and Language

Under the New Rules, the parties are free to agree upon the seat of arbitration,^[4] failing which the default seat shall be the Abu Dhabi Global Market.^[5] However, arbitrateAD’s Court of Arbitration (the “Court”) shall have the power to finally determine the seat after considering the parties’ observations as well as any other relevant circumstances.^[6] 

The New Rules do not specify a default language, thus the case management office of the Court will initially determine the language until the tribunal is constituted.^[7] Absent any express guidance regarding what specific criteria will be applied in making such an interim determination, it leaves the question open as to how in practice the case management office will confront the scenario of an arbitral reference involving multi-state, multi-lingual disputants involved in a cross-border transaction.

Consolidation and Joinder

In a departure from the ADCCAC rules, the New Rules provide for the claimant to bring a single arbitration in respect of claims arising out of more than one contract or more than one arbitration agreement.^[8]

Similarly, a party may request the Court to consolidate two or more arbitrations pending under the New Rules into a single arbitration where certain conditions are satisfied, including (without limitation), where all parties have agreed to the consolidation being requested.^[9]

The New Rules also permit the joinder of third parties to the arbitration (as additional claimants or respondents) upon request to the Court.^[10]

Interim Measures / Emergency Arbitrators

The New Rules provide for either party to an arbitration filing an application for the appointment of an emergency arbitrator in order to obtain urgent relief prior to the constitution of the tribunal.^[11] Additionally, the New Rules contain the right for the tribunal to order preliminary (i.e. interim) measures in the form of an order or an award.^[12]

Expedited Procedure

Provisions for proceedings to be expedited have also been included in the New Rules.^[13] These provisions will apply only to arbitrations where the aggregate sums claimed and counterclaimed are less than AED 9,000,000 – unless the parties have expressly agreed otherwise.^[14] In such cases the award must be issued within four months of when the tribunal receives the file (unless the tribunal makes a request for an extension – provided that such extension shall not exceed two months).^[15] There is also a right for the tribunal (at the request of a party, or of its own volition) to request that the expedited procedures be applied to an arbitration, irrespective of whether the aggregate maximum value of the claims is exceeded.^[16]

Third Party Funding

The New Rules now expressly provide for and permit the use of third-party funding in arbitration, provided that the funded party discloses the fact, together with details of the funder’s identity. Where the funded party is the claimant, it must include the required information in its request for arbitration.^[17]

Legal costs

The New Rules provide rights for tribunals to issue awards in respect of the costs of arbitration and to apportion these – unless otherwise agreed by the parties.^[18] This touches upon one of the key (and likely most welcome) factors in the New Rules which is that the costs of arbitration are expressly stated to include the fees and expenses of the parties’ legal representatives.

Comment

The emergence of arbitrateAD and the New Rules represent a significant departure from the previous regime under the auspices of ADCCAC in Abu Dhabi. These new developments come at a time when arbitration institutions across the Middle East region are enhancing their arbitration offerings with the development of arbitration rules that can actively complete with those of the major global institutions. The New Rules introduce a raft of welcomed features that will likely improve the arbitration landscape in Abu Dhabi – and its attractiveness as an arbitral seat and will serve to promote the UAE in general as a leading arbitration hub.

This article was co-authored by Kieran MacArthur, Trainee Solicitor.
 

^[1] Article 1(1) and 1(2)

^[2] Article 1(2)

^[3] Article 53

^[4] Article 22(1)

^[5] Article 22(2)

^[6] Ibid.

^[7] Article 23

^[8] Article 10(1)

^[9] Article 12(1)

^[10] Article 11(1)

^[11] Article 35(1)

^[12] Article 34(1)

^[13] Article 36

^[14] Article 36(1)

^[15] Article 36(2)(viii)

^[16] Article 36(4)

^[17] Article 48(1)

^[18] Article 50(6)