Consolidation of Dubai’s arbitration centres - The impact on maritime arbitration in the region

Decree No. (34) of 2021 (“the Decree”) on the Dubai International Arbitration Centre (“DIAC”) was recently issued. Pursuant to the Decree, the Dubai International Financial Centre Arbitration Institute (“DIFC Arbitration Institute”) and Emirates Maritime Arbitration Centre (“EMAC”) shall be dissolved and their assets and operations shall be merged into the Dubai International Arbitration Centre (“DIAC”). The move is considered to be a further measure to position Dubai as a leading global centre for arbitration by increasing the efficiency of the various arbitration centres in Dubai.

We comment on the impact this has on maritime arbitration in the region.

EMAC, the specialised maritime arbitration centre was established under Decree No. (14) of 2016 to supervise the processes of mediation and arbitration of maritime related disputes as a “hybrid-form, ad hoc arbitration with a light touch case management and regulations that allow for emergency arbitration and fast tracking”. EMAC was the only arbitration centre in the region specifically with the intention of resolving disputes within the maritime sector.

The Decree calls for the transfer to DIAC of all assets belonging to EMAC, together with all financial allocation from the government of Dubai.

In terms of existing agreements which refer disputes to the DIFC Arbitration Institute and EMAC, DIAC shall be deemed to have replaced these centres and shall have the jurisdiction to consider and determine the disputes. In addition, any current ongoing arbitrations in the DIFC Arbitration Institute or EMAC will continue pursuant to the centres’ rules and procedures but will be subject to the supervision by DIAC, unless the parties agree otherwise.

The measures introduced by the Decree consolidate and centralise arbitration in Dubai. It does however mean that the specialist maritime disputes which EMAC was servicing will now be dealt with by a larger arbitration body. Whilst parties with shipping related disputes have always been free to use the DIAC or DIFC-LCIA Arbitration Centre, EMAC was the only arbitration centre in the region created specifically with the intention of resolving disputes within the maritime sector and its Rules were drafted accordingly. This had the advantage of allowing the centre to be tailored to the needs of the shipping industry. Having a UAE based specialised maritime centre for disputes instilled a confidence in parties based locally that their maritime disputes could be dealt with by expertise in the region to rival other global maritime arbitration centres such as the London Maritime Arbitrators Association (LMAA) and Singapore Chamber of Maritime Arbitration (SCMA) which have long been popular maritime arbitration centres. The Decree does however suggest that expertise involved in EMAC will be retained in the new system.

The objective of DIAC is to strengthen the position of Dubai as a reliable arbitration centre and an efficient and effective means of resolving disputes through best international practices. Dubai continues to take measures to position itself as a leading global centre in respect of alternative dispute resolution.

Parties which have agreed to disputes being governed by the DIFC Arbitration Institute or EMAC will not be able to have these centres consider their new claims going forward but will rather have any disputes governed by DIAC unless the parties agree otherwise. With this in mind, parties may wish to take a proactive step to revisit any contracts and/or standard terms which provide for disputes to be governed by the DIFC Arbitration Institute or EMAC in advance of a dispute arising where possible and expressly replace the centres with DIAC or an alternative Arbitration body.

Author

Natalie Jensen, Partner