Comparing Arbitration Systems: The United Kingdom and the United Arab Emirates’ Approaches to Resolving Business Disputes

Arbitration is now a key method for settling business disputes worldwide, offering an alternative to court litigation. The United Kingdom and the United Arab Emirates employ distinct arbitration methods, shaped by their unique legal systems and business environments. This article examines the arbitration systems in these two countries.

Legal Framework

The United Kingdom

Arbitration in the UK is governed by the Arbitration Act 1996, which provides a comprehensive and modern framework. The Act emphasizes party autonomy, minimal court involvement, and the finality of arbitration decisions. London is a major centre for international arbitration, supported by institutions like the London Court of International Arbitration (LCIA). In the UK, parties have significant freedom to decide on procedural rules, choose arbitrators, and determine the governing law. The courts provide supportive but limited oversight, mainly stepping in to enforce arbitration decisions or address procedural issues. Additionally, the UK is a party to the 1958 New York Convention, which ensures arbitration decisions are enforceable in over 170 countries.

Recent Trends

● In 2023, the LCIA received 377 arbitration referrals, including 327 under LCIA rules,

marking a 13% increase from 2022.

● In November 2023, the UK government introduced new legislation to modernize the

Arbitration Act for the first time in 26 years. These changes aim to make arbitration

faster, cheaper, and more efficient.

The United Arab Emirates

In the UAE, arbitration is regulated by Federal Law No. 6 of 2018 (UAE Arbitration Law),

which closely aligns with the UNCITRAL Model Law on International Commercial

Arbitration. The UAE also benefits from the Dubai International Financial Centre (DIFC) and

the Abu Dhabi Global Market (ADGM), which operate as common law jurisdictions with their

own arbitration rules and courts.

The UAE’s arbitration system has several key features, including the 2018 Arbitration Law,

which modernized the process, enhanced efficiency, and ensured the independence of

arbitration panels. The DIFC-LCIA and ADGM Arbitration Centres are popular with

international parties due to their adherence to global standards.

Recent Trends

On September 14, 2021, the Dubai Government issued Decree No. 34, abolishing the

DIFC-LCIA and Emirates Maritime Arbitration Centres, causing initial disruption. All pending

cases were moved to the Dubai International Arbitration Centre (DIAC). Nearly three years

later, arbitration in the UAE is thriving, with a notable increase in cases. In 2023, 355 cases

were registered, a 4.4% rise from 2022, with 323 administered arbitrations, an 11% increase.

Nearly two thirds of DIAC arbitrations in 2023 were based on DIAC arbitration agreements.

Conclusion

The arbitration systems in the UK and the UAE reflect their distinct legal traditions and

commercial priorities. While the UK’s arbitration framework is characterized by predictability and procedural autonomy, the UAE’s approach showcases adaptability and a focus on aligning with international standards. Both jurisdictions offer robust mechanisms for resolving disputes, making them attractive options depending on the needs of the parties involved.