Arbitration cases rise on introduction of new rules at ADCCAC in Abu Dhabi

There have been a surge in real estate and construction arbitration cases. Silvia Razgova / The National

New rules introduced last year by Abu Dhabi Commercial Conciliation & Arbitration Center (ADCCAC) have prompted a surge in real estate and construction arbitration cases.

The new arbitration rules were universally welcomed by the UAE’s legal community upon their introduction last October, for bringing the emirate’s arbitration regime far more into line with internationally recognised standards, and providing additional comfort for international businesses entering into contracts with Abu Dhabi companies.

The introduction of the rules resulted in the number of arbitration cases registered at Adccac rising to 137 in 2013, compared with 98 in 2012 and 94 in 2011, a spokeswoman for the centre said. ADCCAC registered just 34 arbitrations in 2010.

The majority of arbitrations registered with ADCCAC last year came in the final four months of the year, around the time of the introduction of the rules.

Only 35 arbitration cases have been registered with the centre so far this year, the spokeswoman said. However, she added that the centre’s caseload for 2014 is expected to exceed last year’s volume.

Arbitration is an alternative form of dispute resolution typically outside of the courts which can also result in a legally binding and final decision and is often used to settle commercial disputes, particularly international transactions. Ultimately, the process can be less costly and time-consuming than traditional litigation, which is subject to multiple appeals.

Real estate and construction disputes accounted for the majority of ADCCAC’s caseload, the spokeswoman said, declining to give further details.

Lawyers say the rules make Abu Dhabi a better place for conducting arbitration.

“It means that you’ve got a process for arbitration that people who are involved with arbitration are much more familiar with,” according to Justin Ede, a senior associate at Al Tamimi & Company in Dubai.

“The new rules are substantially similar to the rules of the Dubai International Arbitration Centre, and therefore not so dissimilar from the ICC rules,” he said, referring to rules used by International Court of Arbitration in Paris.

Key changes to Abu Dhabi’s arbitration rules include a provision covering confidentiality in relation to the deliberations of the arbitration tribunal and arbitration awards, according to Khalil Mechantaf, an associate at Baker & McKenzie Habib Al Mulla in Abu Dhabi.

“The main impact of the new rules was to make the Abu Dhabi arbitration centre more appealing as a dispute resolution forum and encourage those doing business in Abu Dhabi to opt for ADCCAC rules as their preferred arbitration institution,” he said.

“Given the significant growth that Abu Dhabi is currently witnessing, the main aim of the new regulations was to implement a modern set of rules that were able to cope with the latest arbitration developments and provide an efficient structure for the settlement of various types of disputes,” he said.

At the Dubai International Arbitration Centre (Diac), the largest commercial arbitration centre in the UAE, the arbitration caseload fell to 310 in 2013 from 379 in 2012. The centre has registered 90 arbitration cases so far this year.

A Diac spokeswoman attributed the declineto “the improving economic situation in Dubai with less companies seeking dispute resolution or using alternative methods available. This is also mirroring a general downward trend seen at arbitration centres around the world.”

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