An arbitration case comes to the end with the issuance of an arbitration award to each party. If the losing party does not honour the arbitral award, the enforcement institutions of the state in which the assets of the losing party are located, need to be called.
What the winning party needs to do
In the UAE, the enforcement of an arbitral award requires the submission of request regarding issuance of both – the confirmation of the award and the order to enforce the award (the ‘Enforcement Order’). With the new Arbitration Law, the enforcement proceedings now commence directly before the UAE federal or local Court of Appeal and not before the Courts of First Instance as earlier. With by-passing of the Court of First Instance, the time and cost consuming procedures to challenge the Enforcement Order have been reduced. This is a very positive development.
Said Request for enforcement must be accompanied by the original award or a certified true copy thereof, a copy of the arbitration agreement, a certified Arabic translation of the arbitral award, and a copy of the transcript of filing the judgment with the court.
Within 60 days, the court shall confirm and enforce the arbitral award unless, it finds that one or several reasons for annulment of the arbitral award, as mentioned in Art. 53 of the new Arbitration Law, exist.
The Grievance to challenge the Enforcement Order or the rejection thereof must be filed within 30 days following the date of being notified thereof.
It is important to mention that, besides submitting the request regarding issuance of Enforcement Order, the winning party may and shall seek a freezing order from the civil court to preserve the losing party’s assets until the arbitral award can be enforced.
The losing party’s options
Within 30 days following the notification of the arbitral award, the losing party can file a so called ‘Action for Annulment’ and prove the existence of one or several reasons for annulment as mentioned in Art. 53 of the new Arbitration Law, like the absence of an arbitration agreement, lack of capacity of one of the parties, no proper notice of the appointment of an arbitrator, and/or the violation of the litigation principles, etc.
The judgment rendered by the court upon the Action for Annulment is not subject to appeals. However, the court from which the annulment of arbitral award is sought may – upon request – suspend the annulment proceedings for a period not exceeding 60 days and give the Arbitral Tribunal the opportunity to take any action that may eliminate the causes of annulment without affecting the content of the arbitral award.
We think that the new Arbitration Law achieves a very welcomed shortening of the enforcement procedure. Apart from this, it remains to be seen how the new Arbitration Law will be implemented by concerned enforcement bodies.