Abu Dhabi arbitration centre opens with modern arbitration rules

Seema Bono and Melissa McLaren of Pinsent Masons in Dubai were commenting after arbitrateAD held its launch event on 29 January and its new arbitration rules took effect on 1 February.

“The launch of arbitrateAD and the release of a modern and sophisticated set of institutional rules will be greatly welcomed and strengthen the region’s dispute resolution landscape,” said Seema Bono. “This significant step provides end users with greater choice when selecting their arbitral rules and administering institution and reinforces Abu Dhabi’s commitment to enhancing its arbitration offering.”

The rules apply to arbitrations commenced on or after 1 February 2024 where parties agree to refer their disputes to arbitration under the rules, to the centre, or to the Abu Dhabi Chamber of Commerce. The rules also apply where the parties have agreed to submit their disputes to arbitration under the ADCCAC rules, i.e. the rules of the Abu Dhabi Commercial Conciliation and Arbitration Centre, with the exclusion of provisions dealing with emergency arbitrators and expedited proceedings. The 2013 ADCCAC arbitration rules continue to apply to any pending arbitrations being administered under those rules.

The implementation of the rules is overseen by the Court of Arbitration – the centre’s independent administrative body. The court has supervisory authority over the arbitration and dispute resolution services offered by the centre. The court does not adjudicate or resolve disputes; it facilitates the resolution of disputes by the tribunal under the rules.

The court’s functions include, among other things, the appointment and replacement of arbitrators, the resolution of challenges to arbitrators or arbitration agreements, the disposition of requests for joinder and requests for consolidation, and the scrutiny of awards. The decisions of the court are final, and their underlying reasoning is not required to be communicated to the parties except where the decision relates to a challenge to an arbitrator’s appointment.

The Abu Dhabi Global Market (the ADGM) is the default seat of proceedings under the rules.

“The decision by arbitrateAD to align its default seat with the ADGM will come as no surprise to arbitration users in the region, particularly in light of the growing popularity of the ADGM and its underlying arbitration law,” said Melissa McLaren.

The rules also provide that requests for joinder – requests made by a party to add other parties to the case – are to be decided by the court, in the event they are filed prior to the constitution of the arbitral tribunal, and by the tribunal afterwards. On the other hand, requests for consolidation – requests to bring multiple similar cases together to be heard under a single process – will be decided exclusively by the court, though the parties and the tribunals will have an opportunity to be heard.

The rules are tech-friendly, stipulating that the default mode of communication be digital, that hearings can be conducted remotely, and that awards may be signed electronically.

Article 36 of the rules sets out a scheme for expedited proceedings. These proceedings, under which an award must be made within four months from the appointment of the tribunal, apply by default where the amount in dispute does not exceed AED9 million ($2.45m), though parties may request that the procedure is applied to disputes that exceed this threshold. There is no right to request joinder or consolidation in expedited proceedings.

The rules also empower the tribunal to, at the request of a party, order any preliminary measures it considers appropriate under the applicable law, in the form of an order or an award. The tribunal may, if it deems it appropriate, reconsider, modify, or vacate any such order or award.

If the tribunal is yet to be constituted, a party can still seek emergency preliminary measures under the rules’ framework for the appointment of an emergency arbitrator – even before filing its request for arbitration. If the court is satisfied that the centre has jurisdiction to administer the arbitration, it will aim to appoint an emergency arbitrator within one day, provided that the requisite fee has been paid. Emergency arbitrators enjoy the same powers vested in the tribunal, and may order the preliminary measures they deem appropriate on an interim basis. The appointment of the emergency arbitrator is revoked upon the constitution of the tribunal, which is not bound by an emergency arbitrator’s awards and/or orders.

What parties have to pay by way of arbitrator fees will be determined by the centre with reference to the value of the claims, meaning arbitrators will not be remunerated on an hourly basis as is the model under some other institutional rules.