An Emiri Decree (No. 6 of 2009) concerning the formation of the Sharjah International Commercial Arbitration Center has been issued by H.H. Dr. Sultan bin Mohamed Al Qassimi as a final addition to the arbitration law in the Emirate. It is legislation which is supplementary to the laws and ordinances already in place, and was issued to keep pace with the continuing legal developments in the field of international commercial arbitration.
Sharjah International Commercial Arbitration Center operates under the umbrella of the Sharjah Chamber of Commerce & Industry and attracts such financial and administrative independence to the extent required to achieve its formation.
The Center is tasked with achieving a number of objectives. These objectives are set out in Articles 3 and 4 of the Rules, and include:
Through arbitration, to resolve commercial disputes between natural or corporate persons, whether members of the Chamber or otherwise;
to spread the culture of arbitration between lawyers, professionals and businessmen at the local, regional and international levels;
to form an elite group of members interested in arbitration inform various professional, commercial and industrial levels;
to consider drafts of local and federal laws and regulations in connection with the objectives of the Center, and to provide recommendations which support the purpose and role of the Center;
to hold conferences, seminars, courses and training sessions in arbitration;
to cooperate with the local and international agencies and associations interested in arbitration; and
to carry out any other objectives consistent with the purpose behind the formation of the Center.
The Center shall exercise all required powers to achieve its objectives; in particular, to conclude all commercial disputes between natural and corporate persons in accordance with the provisions of the Rules (subject to the Constitution and local and Federal laws applicable in the Unites Arab Emirates).
A highlight of the new Rules of Sharjah International Commercial Arbitration Center (Rules) is the emphasis on the prompt consideration of applications and expedient resolution of disputes referred to the Center (stipulates as within no later than six months from the date of the first hearing).
In this regard, Article 16 of the Rules provides as follows:
"Within no later than three days from the date of receipt by the arbitral tribunal of the application referred to it by the administrative Affairs Section, the arbitral tribunal shall notify the parties to the dispute and schedule a date for them to appear before the tribunal to consider the application, provided that such date shall not exceed 15 days from the date of the notice.
If the defendant fails to appear before the arbitral tribunal after being duly notified and if the arbitral tribunal confirms the existence of the arbitration clause or the agreement on arbitration, the tribunal shall hear the case in the absence of the defendant and shall conclude such case in accordance with the statements submitted therein.
If the claimant fails to appear before the arbitral tribunal after being duly notified, the defendant may request the tribunal to hear and conclude the case in the absence of the claimant in accordance with the statements submitted therein."
As for the expedient conclusion of arbitration proceedings, Article 17 of the above Decree provides as follows:
"The arbitral tribunal shall consider and conclude the application within no later than six months from the date of the first hearing scheduled to consider the application.
On demand by the parties of the dispute, such period may be extended for any further period as applicable."
If the parties mutually agree to settle the dispute amicably, the arbitral tribunal shall issue its award according to the result of such settlement.
Awards issued by the arbitral tribunal of the Sharjah International Commercial Arbitration Center may not be appealed by any means of appeal. Any interested party may apply to the Court to ratify an award. The application for ratification can be opposed by an application to annul the award based on any of the events outlined in Article 25 of the Rules:
if the award is issued in the absence of an arbitration document, if it is based on an invalid document, if such document is time barred, or, if the arbitrator exceeds the scope of such document;
if the award is issued by arbitrators not appointed in accordance with the law of these Rules, if the award is issued by any of such arbitrators without being authorized to do so in the absence of the other arbitrators, if the award is issued on the basis of an arbitration document where the subject matter of the dispute is not identified, or if the award is issued by a person without capacity to agree on arbitration or by an arbitrator not meeting the legal conditions;
if the award is invalid or if the invalidity of the proceedings affect the award;
No party may waive the right to hold to invalidity prior to issuing the award.
It is important to note that the default language of the arbitration proceedings under the Rules shall be Arabic, although the parties can agree to conduct proceedings in English.
Article 28 of the Rules sets out the grounds for challenging the arbitral tribunal or any arbitrator. It provides that the application to recuse the tribunal or any of its arbitrators must be submitted by the concerned party to the Administrative Affairs Section, of the Center, which will in turn refer the application to the director of the Center or his deputy. A final decision, which may not be appealed in any way, will be handed down by the Executive Committee. If the application is accepted, the Executive Committee will appoint another arbitrator.
Decree No. 6 of 2009 provides for the formation of an Executive Committee of the Center, which consists of a chairman and at least 6 other members, either from the directors of the Chamber or third parties. The service term for each Committee member must be equal and simultaneous to the term of the directors of the Chamber. The Committee shall have the power to supervise the affairs of the Center and to conduct all its financial and administrative activities.
The Committee may also exercise the powers of the Center and take such resolutions and do such acts as the Chamber may deem fit to achieve the objectives of the Center. Specifically, the Committee may determine the place of arbitration if the parties to the dispute fail to agree thereto.
Further, the Committee shall also:
appoint the arbitrators if the parties fail to do so;
decide on the applications to reconsider the appointment of arbitrators;
issue the rolls of the arbitrators from inside and outside the UAE according to the standards laid by the Executive Committee;
determine the fees of the arbitrators according to the schedule attached to the Rules;
develop the internal regulations as the Committee may deem necessary for the implementation of the Rules; and issue such internal regulations under a resolution by the Board of Directors of the Chamber;
propose the amendments required to be made to the Rules at the discretion of the Committee;
approve the balance sheet of the Center in cooperation with the Chamber;
prepare the final accounts of the Center;
propose the charges concerning the activities and transactions of the Center and refer such fees to the Executive Council to issue them under a resolution ; and
to accept unconditional donations and contributions.
The Center sets the charges, fees and expenses of arbitration proceedings under three separate schedules. The first schedule sets the charges for registration of the arbitrators and experts; the second schedule sets the fees of the arbitrators and the administrative charges, and the last schedule sets the fees for arbitration proceedings involving definite and indefinite amounts.
Finally, it should be noted that the growth of international trade and the overlap of economic interests contributed to the rapid development of the UAE's economy. This created the urgent need to develop solid forums for international commercial arbitration in the UAE, in order for the UAE to develop as an effective and appropriate place to resolve both international and domestic disputes. This is especially given the prominent place international commercial arbitration now has in the realm of dispute resolution.
By Djalila Behaz - Dubai Office
© Al Tamimi & Company 2009
