Arbitration is widely used for resolving commercial, construction, investment and cross-border disputes in the UAE and the wider Middle East. It allows parties to refer their dispute to an arbitral tribunal rather than resolving it through ordinary court proceedings.
Under the UAE Arbitration Law, an arbitration agreement must be in writing. The requirement may be satisfied through a signed contract, written correspondence, email or a clear contractual reference incorporating another document that contains an arbitration clause.
What should an arbitration clause include?
A properly drafted clause should ordinarily address:
- The institution administering the arbitration
- The applicable arbitration rules
- The legal seat of arbitration
- The number of arbitrators
- The language of the proceedings
- The governing law of the contract
- The scope of disputes covered
- Procedures for urgent or interim relief
Using a clause copied from another contract can create uncertainty. For example, the chosen institution may not exist, the clause may refer to conflicting rules or the seat may not match the parties’ commercial intentions.
Arbitration is not always the right solution
Arbitration can offer confidentiality, procedural flexibility and access to specialist decision-makers. However, it may also involve significant costs, particularly where three arbitrators, expert evidence and international enforcement are required.
Businesses should therefore consider the likely value and nature of future disputes before choosing arbitration.
The dispute-resolution clause should be reviewed before the agreement is signed—not after a conflict has arisen. A carefully drafted clause can reduce procedural disputes and help the substantive case proceed more efficiently.
Our lawyers advise on arbitration agreements, arbitral proceedings and the recognition and enforcement of awards in the UAE.