In a welcome move, the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) recently announced its new Procedural Regulations of Arbitration, which take effect from September 1, 2013.
Few will mourn the passing of the old regulations and the good news is that the regulations represent a significant improvement, drawing on various sources including the UNCITRAL Rules, but with some distinct features.
The change is significant for any business that has entered into or will enter into a contract, where the dispute resolution mechanism is the ADCCAC regulations, often the case where one party is an Abu Dhabi company.
Below we briefly consider some of the key amendments and also highlight some of the potential issues that we foresee with the regulations.
STREAMLINED PROCEDURES
The regulations represent a clear intention to streamline the ADCCAC procedures. In particular:
- What constitutes proper notice of arbitration has now been clearly set out and the regulations deal with how to proceed if it is impossible to give notice.
- The provisions dealing with the request for arbitration represent a significant improvement the regulations set out exactly what is required and the list is comprehensive. Parties must now properly consider their claim and relief prior to commencement.
- Power has been expressly delegated to the director of ADCCAC to impose fixed deadlines if, for example, a respondent fails to submit a response to the Request for Arbitration.
- In the event the parties do not each nominate their party appointed arbitrator (or the parties are not able to agree a sole arbitrator) within a maximum of 14 days from the date of the Request for Arbitration the director shall "take charge of the matter" and in the case of a sole arbitrator appoint that arbitrator.
- There is no longer a requirement for a meeting to commence the arbitration and "pleading sessions" are not mandatory. It is conceivable that arbitration before ADCCAC can now be run entirely on papers.
All these modifications potentially offer a more efficient and streamlined service to users of ADCCAC.
PROVISIONAL AND PRECAUTIONARY MEASURES
The regulations introduce provisional and precautionary measures. They allow a panel to order that goods that are at risk of being disposed of by one party are entrusted to a third party for safe keeping, or perishable items be sold and the sums from the sale be deposited with ADCCAC pending settlement of the dispute. Further the new regulations specifically permit the panel to make provisional (interim) awards. This is a welcome change.
Confidentiality
The old regulations were silent on the matter of confidentiality. The regulations expressly provide that the award, all materials and documents, expert reports and witness statements, records and all procedures will be held confidential unless agreed upon in writing by the parties or required by law.
Arbitration panel fees
In a move that is likely to be welcomed by arbitrators the new regulations contain a table of fees similar to that of the ICC rules.
Exclusion of responsibility
Another change that will be welcomed by arbitrators is the express provision that arbitrators, ADCCAC and its staff and tribunal appointed experts shall not be held responsible towards any of the parties (or third parties) and for any action, act or inadvertence in relation to the arbitration taken in good faith.
Language of the proceedings
The regulations require the panel to deliver its award in Arabic in addition to any other language adopted in the conduct of the arbitration proceeding. We are aware of issues caused by the similar provision in the previous regulations where panels had produced their awards in English and the award was only subsequently translated into Arabic prior to enforcement. The regulations make it clear, as was the case with the old regulations, that the panel must produce an Arabic award in addition to the award in any other language.
Settlement
The regulations allow for the terms of a settlement reached between the parties to be issued as an award by the panel. Such an award will have the same binding force as awards adjudicated on by the panel.
Waiver of rights
If a party is aware that a provision of the regulations has not been complied with and yet continues the arbitration without objecting he will deemed to have waived his right to object. This is a sensible addition as, in the past, it was not uncommon for a party to choose not to raise procedural errors in order to retain grounds to apply for nullification at the enforcement stage. Whether this will reduce nullification applications in practice remains to be seen.
Transitional provisions
The regulations will become effective from September 1, 2013. They will apply to all arbitrations after that date, even where arbitration is currently in process. It remains to be seen what challenges will arise as a result.
CONCLUSIONS
In summary, the changes to the rules are extensive, welcome and in many cases represent modern best practice. In combination with the fact that Abu Dhabi government contracts often contain ADCCAC as their dispute resolution mechanism, this should help to boost confidence in ADCCAC among users.
We will be producing a more detailed update in time for our forthcoming Middle East Arbitration Roadshow in Doha, Abu Dhabi and Dubai on September 30 to October 2, 2013.
Richard Bell is a partner in Clyde & Co's Middle East Dispute Resolution team. His main areas of practice are commercial litigation, arbitration and alternative dispute resolution. He has acted for clients in a wide variety of commercial arbitration claims and court proceedings both in the UAE and in foreign jurisdictions.
James Fox is a senior associate in Clyde & Co's Middle East Dispute Resolution Group based in the Abu Dhabi office. He has extensive experience in resolving complex, high value disputes under the auspices of the Abu Dhabi Commercial Arbitration Centre, London Court of International Arbitration and the International Chamber of Commerce and before the Abu Dhabi and English courts.
Zawya 2013
