Dubai Courts have shown a strong stance on arbitration clauses, requiring early invocation before any substantial case discussion.
- Under UAE law, discussing case merits before mentioning arbitration can lead to losing the right to arbitration.
- A recent court judgment highlighted this by deeming a defendant’s verbal response as a waiver of the arbitration clause.
- This judgment emphasizes that even discussions outside the courtroom can constitute a waiver, broadening the interpretation scope.
- The case serves as a crucial reminder for parties to understand arbitration clause implications in legal proceedings.
In the legal landscape of UAE, the courts have adopted a stringent approach toward arbitration clauses, especially when it comes to their invocation timing. The necessity for this arises under Article 8 of Federal Law No. 6 of 2018 on Arbitration and Article 86 of Decree Law No. 42 of 2022 on Civil Procedures. These laws specify that before delving into any substantial discussions regarding the case, the arbitration clause must be invoked. Failure to do so is perceived as a waiver of the said clause.
A significant ruling by the Dubai Court of Cassation has reinforced this position. In a recent case, a defendant who verbally engaged in discussing the merits of the case during a hearing, albeit with a court-appointed expert, was deemed to have waived his right to arbitration. This was the case despite the defendant later submitting a written defense that referenced the arbitration clause.
Notably, the court-appointed expert’s primary role is to assess technical aspects of a case, not to delve into legal submissions. Yet, the Court interpreted any verbal or written response on the case merits, even in such a setting, as a waiver of the arbitration right. This interpretation broadens what can be considered a waiver, stressing that discussions, even those that occur outside formal courtroom settings, can lead to losing arbitration rights.
This ruling serves as a wake-up call for all parties involved in legal proceedings in Dubai. It is a clear indication that the courts expect both verbal and written communications on case merits to acknowledge arbitration clauses early on. Ignoring this can inadvertently lead to forfeiting one’s right to arbitration.
The implications of this judgment are profound, as it highlights the necessity for comprehending the depth of arbitration clauses in legal contracts. Parties must ensure these clauses are addressed upfront to safeguard their rights. While arbitration is designed to be a more efficient dispute resolution method, its benefits can only be utilized if clauses are invoked timely.
This case underscores the importance of understanding and respecting arbitration clause procedures in UAE’s legal framework.
