On Sept. 14, 2021, the Dubai government issued a decree that essentially combines the three main arbitration centers that had previously been operating in Dubai, namely the Dubai International Arbitration Center (DIAC), the Emirates Maritime Arbitration Center (EMAC) and the DIFC Arbitration Institution (DAI), which operated a joint venture with the London Court of International Arbitration (LCIA). Per the decree, DIAC remains as the surviving entity while the two other entities are dissolved. While the decree offers some guidance on post combination arbitration process, this restructuring will likely be scrutinized by courts in the enforcement of awards issued by the DIAC going forward. Of particular interest will be court interpretations of Article V(1)d of the New York Convention in cases where parties seek enforcement of arbitration awards issued by the surviving DIAC when their arbitration agreements were entered into prior to the consolidation and provided for arbitration in either EMAC or DAI/DIFC-LCIA. More specifically, courts will most certainly be asked to determine whether Article V(1)d of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention, would impede enforcement of any such awards.

The Dubai decree came into effect on Sept. 20, 2021 but gave the DIAC six months to comply with the provisions of the Decree and the DIAC statute it attaches. Discussions are also ongoing between the LCIA and the Dubai government for the transition of DIFC-LCIA matters and affairs. We should therefore expect some additional guidance to be issued in the near future. However, as part of the decree, the Dubai government has already laid out the path for the combined entity by repealing the prior decrees approving the arbitration venues and adopting a new DIAC statute which contemplates a consolidated Dubai arbitration center with international undertones and aspirations. One of the most noteworthy elements of the new DIAC statute is in its organizational structure, which provides for the establishment of an Arbitration Court (with functions similar to those of established international arbitration centers such as the ICC). This, in itself, is a key indicator of Dubai’s global outlook and ambitions. Another significant provision of the new DIAC statute relates to the place and seat of arbitration: Whereas the decree provides that the head office of the DIAC will be located onshore in Dubai, it also states that it will have a branch in the DIFC, Dubai’s offshore financial center. Further, Article 4(b) of the new DIAC statute provides that the DIFC branch will be the default place and seat of arbitration when parties don’t specify, or agree on, place or seat. With this provision, the decree attempts to ensure that the international stature, and appeal, of the DIFC and Dubai are maintained.