Arbitration in the UAE – keep calm and carry on (in Dubai), December 2017
The UAE Ministry of Justice recently released Ministerial Resolution No. 972 of 2017 on the Executive Regulations of the Federal Law No. 23 of 1991 on the Regulation of the Legal Profession and its Amendments (the Resolution), calling into question the ability of parties to choose their counsel in arbitration proceedings (see our earlier briefing here).
The Dubai Legal Affairs Department (DLAD) has now moved to reassure parties and practitioners that parties will be free to choose their counsel in Dubai-seated arbitrations.
What is happening?
The Resolution caused some alarm across the UAE. On its face, it appeared to prohibit tribunals from allowing parties in arbitration to be represented by counsel other than UAE nationals registered on the Roll of Practising Solicitors.
As we noted in our earlier briefing and advised our clients, our view was that the Resolution would be subordinate to conflicting Emirate-level law, notably the laws in Dubai (which retains jurisdiction to establish its own court system and civil procedural laws). This view now appears to have been confirmed by the DLAD.
In a letter recently issued by the DLAD, it has sought to clarify that:
- "Legal Consultants" (i.e. non-UAE-national lawyers practising in Dubai) are allowed to "plead and represent others before arbitration and conciliation bodies...in the Emirate".
- There are no conditions or restrictions in Dubai preventing legal consultants visiting from outside the Emirate from attending or representing clients before arbitral tribunals in Dubai.
Why is this important?
As we noted in our earlier briefing, a fundamental principle of any contentious proceedings is that a party should be free to choose counsel that will best represent their interests.
Of similar concern was the potential for recalcitrant parties to seek to frustrate or delay arbitrations and enforcement of awards on the basis of alleged failures to comply with the Resolution.
The Resolution therefore caused unease amongst parties and practitioners alike and not entirely unduly: following the publication of the Resolution, we are aware of at least one case in which a party in a Dubai-seated arbitration raised a procedural challenge regarding the right of the opposing party to be represented by non-UAE counsel who was not registered on the Roll of Practising Solicitors.
The swift and proactive intervention by the DLAD – the Dubai Government body charged with supervising and managing all "legal matters" and regulating the advocacy and legal consultancy profession within the Emirate – is therefore an extremely positive step to reassure the market in Dubai and further afield. Given the considerable weight likely to be afforded to the DLAD's clarification, it is hoped that it will be sufficient to prevent opportunistic procedural challenges altogether, or at the very least ensure their swift dismissal.
What is next?
For now, parties' freedom to choose legal counsel in Dubai-seated arbitrations remains largely unfettered, but there are two issues to bear in mind:
- First, the DLAD's clarification does not mention representation by non-lawyers. While such instances are likely to be comparatively rare, it remains to be seen how this will be addressed. In the interim, and in line with the DLAD's position on visiting legal consultants (not to mention specific provisions of various institutions' arbitration rules), we would not expect this representation to be restricted.
- Second, the clarification only concerns arbitration proceedings in Dubai. Other Emirates (notably Abu Dhabi and Ras Al Khaimah) have also opted out of the UAE's federal judicial structure and, as such, the Resolution should similarly not automatically apply in those jurisdictions. However, similar clarification in those Emirates would no doubt be welcomed. For the remaining Emirates, we wait to see how the Resolution will be applied or interpreted by tribunals and in the courts.
For arbitration in Dubai, however, the proactive steps taken by the DLAD will ensure Dubai's continuing success as a regional arbitration hub.