International arbitration law and rules in ADGM

Parties outside of the ADGM are free to choose the ADGM as an arbitration seat. Awards made under the ADGM’s Arbitration Regulations can be enforced in other New York Convention jurisdictions, due to the UAE (including the ADGM) also being a signatory.

1.1. Located on Al Maryah Island, the Abu Dhabi Global Market (ADGM) is an international financial centre for local, regional and international institutions, established in 2013.  Generally, the ADGM is a free zone operating under its own legal system where the UAE’s federal civil and commercial laws are not applicable. 1

1.2. The ADGM has enacted legislation to govern arbitrations within its jurisdiction, in the form of the Arbitration Regulations 2015 (the Regulations) which is based on the UNICTRAL Model Law. The Regulations were amended by Amendment No 1 of 2020, which was enacted on 23 December 2020.

2.1.1The Regulations apply where the seat of the arbitration is the ADGM, or where an arbitration agreement applies the Regulations. 2  The Regulations govern the enforcement and recognition of arbitral awards in the ADGM irrespective of the state or jurisdiction in which they are made. 3

2.2.1 The following are some general principles drawn from the Regulations.

a. Party autonomy

The Regulations provide that:

• the parties are permitted to agree to arbitration disputes which have arisen between them in respect of a defined legal relationship; 4
• the parties are permitted to agree upon the procedure to be followed by the Tribunal in conducting the proceedings; 5  and
• the parties are also free to choose the substantive law to be applied to the dispute. 6

b. Fairness

The Regulations expressly state that the parties shall be treated fairly and each party shall be given a reasonable opportunity to present its case .7

c. Non-intervention by the courts

The Regulations generally provide that no court shall intervene in matters governed by the Regulations, except to the extent provided by the Regulations. 8

3.1.1 The Regulations prescribe the requirements for a valid arbitration agreement. 9  The agreement must be in writing. This requirement will be satisfied where the agreement is recorded in any written form by one or more of the parties to it, or by a third party with the authority of the parties. An agreement which has not been signed could also be made binding orally or by conduct. 10 The requirement that the arbitration agreement be in writing will be satisfied where:

• the arbitration agreement is contained in an electronic communication; 11
• the arbitration agreement is contained in an exchange of a statement of claim and a statement of defence in which the existence of the arbitration agreement is alleged by one party and is not denied by the other; 12  and
• the contract refers to another document containing an arbitration agreement, provided that the reference is such to make the arbitration agreement part of the contract. 13

3.1.2 The Regulations also provide that an arbitration agreement which gives a party a unilateral right to refer a dispute to an arbitral tribunal or a court does not contravene the Regulations, and shall not be considered invalid on the basis that it provides the right to refer the dispute either to court or to arbitration.

3.2.1 The Regulations also recognise the concept of separability of arbitration agreements. Unless otherwise agreed, an arbitration agreement which forms or was intended to form a part of another agreement will not be considered invalid because that other agreement is invalid, did not come into existence or has become ineffective. For this purpose, the arbitration agreement shall be treated as a distinct agreement. 14

4.1.1 The Regulations permit the parties to choose the number of arbitrators provided that it is an odd number. 15 Where no agreement is reached the default position is that a sole arbitrator shall be appointed. 16

4.1.2 Furthermore, under the Regulations, the parties are free to agree on a procedure for appointing the tribunal. 17 However, where no agreement has been reached:

• where a sole arbitrator is to be appointed, if the parties do not agree on the arbitrator within 30 days of one party requesting the other to do so, the arbitrator shall be appointed by the institution administering the arbitration, or if there is no institution, by the ADGM Court on the request of either party; 18  and
• where three arbitrators are to be appointed, each party shall appoint one and the two appointees shall appoint a chairperson. If a party fails to make an appointment within 30 days of a request to do so, or the two arbitrators fail to agree on the chairperson within 30 days of their appointment, the appointment shall be made by the arbitral institution 19 , or, where there is no institution, by the ADGM Court. 20

4.2.1 The Regulations provide, and set out the grounds, for challenges against arbitrators. An arbitrator may be challenged only where circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality, independence or possessing the agreed qualifications. A party may challenge an arbitrator appointed by them, or whose appointment they participated in only for reasons which became known after the appointment was made. 21

4.2.2 The Regulations also permit the parties to agree upon the procedure for challenging an arbitrator. 22  Where no agreement is reached, the party who intends to challenge an arbitrator shall (within 30 days of becoming aware of the constitution of the tribunal or the grounds for challenge) send a written statement of the reasons for the challenge to the tribunal. Unless the challenged arbitrator withdraws, or the other party agrees with the challenge, that challenge shall be decided by the arbitral institution, or the ADGM Court where there is no institution. Whilst the challenge is pending before the arbitral institution or ADGM Court, the arbitral tribunal may continue with the proceedings and issue an award. 23

4.3.1 Where an arbitrator becomes unable to perform their functions or otherwise fails to act without undue delay, their mandate shall terminate if they withdraw from their office or if the parties agree. If no agreement is reached or if there is any controversy as to the failure by the arbitrator to perform their function, then either party may request the arbitral institution (or where there is none, the ADGM Court), to decide on the termination of the mandate. Such a decision shall not be appealable. 24 Appointment of substitute arbitrators

4.4.1 When an arbitrator’s mandate ends (either for the reasons set out above or for any other reason),  a substitute arbitrator shall be appointed according to the rules that governed the appointment of the arbitrator being replaced. 25

4.5.1 The Regulations stipulate that arbitrators, arbitral institutions or appointing authorities shall not be liable for any act or omission in connection with the arbitration unless they are shown to have caused damage by conscious and/or deliberate wrongdoing. 26

5.1.1 Unless otherwise agreed, the Regulations specifically permit the arbitral tribunal to determine its own substantive jurisdiction in terms of the validity of the arbitration agreement, whether the tribunal has been properly appointed and what matters have been submitted to arbitration in accordance with the arbitration agreement. 27  The tribunal’s ruling may be challenged by any available arbitral process of appeal or review that the parties have agreed in the arbitration agreement or in accordance with the Regulations. 28

5.1.2 A jurisdictional challenge must be raised by a party no later than the time that party takes the first step in the proceedings to contest the merits of any matter in relation to which it challenges the tribunal’s jurisdiction. However, a party shall not be precluded from raising an objection because they have appointed, or participated in the appointment of an arbitrator. 29  Furthermore, where the objection relates to the arbitral tribunal exceeding its jurisdiction, the objection must be made as soon as possible after the matter alleged to be beyond the tribunal’s jurisdiction is raised. 30  The arbitral tribunal is empowered to permit late objections in either case if it considers the delay to be justified. 31

5.1.3 The arbitral tribunal’s ruling on its own jurisdiction may be dealt with as a preliminary question or in an award on the merits. If the parties have agreed upon a particular course in this regard, the tribunal must proceed in accordance with that course. 32

5.1.4 Where the arbitral tribunal has ruled on its own jurisdiction as a preliminary question, the ADGM Court may determine any question as to the substantive jurisdiction of the tribunal. 33  An application in this regard shall not be considered unless it is made with the written agreement of all parties or it is made with the permission of the tribunal and the ADGM Court is satisfied that the determination of the question is likely to result in substantial cost savings, that the application was not delayed and that there is a good reason why the matter should be decided by the ADGM Court. 34  Any decision issued by the ADGM Court shall not be subject to appeal. 35

5.2.1 Unless otherwise agreed by the parties, the arbitral tribunal (at the request of a party) may order interim measures provided that any such request by a party is made upon notice to the other parties in the proceedings. 36

5.2.2 An interim measure may be in the form of an award or another form and may include an order for a party to: 37

• maintain or restore the status quo pending determination of the dispute; 38
• take action that would prevent or refrain from taking action that is likely to cause harm or prejudice to a party or the arbitral process; 39
• provide a means of preserving assets out of which an award may be satisfied; 40  or
• preserve evidence that may be relevant to the resolution of the dispute. 41

5.2.3 The Regulations permit the arbitral tribunal to require that an applicant for interim measures provide appropriate security in connection with the application. 42  The party requesting the interim measure shall be liable for costs/damages caused by that measure if the arbitral tribunal later decides it should not have been granted. 43

5.2.4 The Regulations provide that these interim measures shall be recognised as binding and, unless otherwise provided by the arbitral tribunal, shall be enforced through an application to the ADGM Court. 44   Again, the ADGM Court may order the requesting party to provide security in respect of the measure if the arbitral tribunal has not already done so, or where such a decision is necessary to protect third party rights. 45  Finally, the recognition and enforcement of an interim measure may be refused on the grounds set forth in the Regulations for refusing the recognition and enforcement of an award (see section 9 below). 46

6.1.1 The Regulations permit the parties to agree on the procedure for the conduct of the proceedings. 47  The parties are free to agree to adopt in whole or part the ADGM Arbitration Centre Arbitration Guidelines, regardless of the seat or the applicable rules of procedure. 48  Where there is no agreement, the tribunal may conduct the arbitration in such a manner that it considers appropriate. 49  In all cases, the tribunal must adopt procedures which:

1. are suited to the circumstances of the particular case;
2. prevent unnecessary delay and expense; and
3. facilitate fair, efficient and expeditious conduct of the arbitration. 50

6.1.2 In exercising its discretion as to the adoption of procedures, the arbitral tribunal shall consider the use of technology to enhance the efficient and expeditious conduct of the arbitration, 51  including in relation to:

• the submission, exchange or communication of documents via electronic means;
• the use of electronic signature;
• documents being searchable; and
• conducting hearings by video conference, telephone or other communication technology, in whole or part. 52

6.2.1 Unless otherwise agreed, the arbitral  tribunal has the power to order a claimant to provide security for costs in the arbitration. However, this power shall not be exercised on the grounds that the claimant is an individual ordinarily resident outside of the ADGM or an entity incorporated outside of the ADGM or whose management and control is exercised outside of the ADGM. 53

6.3.1Unless otherwise agreed, the arbitration shall commence on the date the respondent receives the request for the dispute to be referred to arbitration. 54

6.4.1 The Regulations stipulate that the parties are free to agree on the seat of arbitration. 55  If the AGDM is the agreed seat, no other connection to the ADGM is required for the Regulation to apply. 56  Failing an agreement, the arbitral institution or the tribunal shall decide the seat of arbitration, having regard to the circumstances of the case including the convenience of the parties. 57  Unless otherwise agreed, the Regulations also permit the arbitral tribunal to hold meetings at any place it considers appropriate, 58 including via video conference, telephone or other communications technology in one or more geographical places. 59

6.4.2 The parties are free to agree on the language of the proceedings and, in the absence of such agreement, the arbitral tribunal shall determine the language or languages to be used. 60  The arbitral tribunal is also empowered to order the translation of evidence into the language of the arbitration. 61

6.5.1 The parties are free to agree on the procedure for joining an additional party to an arbitration provided that the party to be joined is a party to the arbitration agreement or has consented to the joinder. 62

6.5.2 Where the parties have not agreed to any procedure and before the appointment of any arbitrator, the arbitral institution or the ADGM Court (where no institution is acting) may allow third parties to be joined to the arbitration upon the request of a party where it is considered in the interests of justice to do so. 63  The request may be refused where the arbitral institution or the ADGM Court considers that the joinder should not be permitted because of prejudice to the parties. 64  The third party must be a party to the arbitration agreement or have consented to the joinder in writing. 65

6.5.3 No additional party may be joined after the confirmation or appointment of any arbitrator, unless the parties (including the joined party) agree. 66

6.6.1 The parties may decide on the requirement for, and form of, written statements of claim and defence, when these should be filed and the extent to which such statements can be later amended. In the absence of an agreement these requirements/procedures shall be determined by the arbitral tribunal. 67

6.7.1 Under the Regulations and subject to the parties’ contrary agreement, the arbitral tribunal shall decide on whether to hold oral hearings or whether the proceedings shall be conducted on a documentary basis. However, unless the parties have agreed that no hearing will be held, the arbitral tribunal must convene hearings at an appropriate stage of the proceedings after consulting the parties. 68

6.8.1The Regulations provide that, unless otherwise agreed, the arbitral tribunal may (after consultation with the parties) appoint an expert to report on specific issues, require a party to give any relevant information to the expert, or to produce and provide access to any relevant documents, goods or property for inspection. 69  Such expert report or evidentiary document upon which the arbitral tribunal relies in making its decision shall be communicated to the parties 70  (and which may unless otherwise agreed be communicated electronically). 71

6.8.2 Further, unless otherwise agreed, if a party requests, or if the arbitral tribunal considers it necessary, the expert shall (after the delivery of their report) participate in a hearing where the parties will be able to examine them on the points in issue. 72  

6.8.3 The expenses and costs of the expert(s) appointed by the tribunal shall be borne by the parties in accordance with the arbitral award. 73

6.9.1 The Regulations clearly set out the conduct that is expected of the parties and their representatives. 74  This includes, but is not limited to ensuring that the parties’ representatives do not engage in activities intended to obstruct or delay the proceedings, or jeopardise the integrity of the proceedings, or the finality of any award; 75  do not knowingly or recklessly make a false statement to the arbitral tribunal; 76  and ensure that relevant documents are preserved. 77

6.9.2 In addition, the Regulations provide a right for the arbitral tribunal to sanction the party representatives should they breach their section 44(1) obligations by:

1. issuing a written reprimand or caution to the party representative;
2. drawing adverse inferences when assessing the evidence relied upon, or legal submissions made;
3. making an order or award on costs against the party instructing the party representative; and
4. granting any other appropriate measure the arbitral tribunal considers necessary in order to preserve the fairness and integrity of the proceedings. 78

6.9.3 Such decisions of the arbitral tribunal must be in writing, provide reasons, and be communicated to all parties. 79

6.10.1 The arbitral tribunal or a party (with the approval of the tribunal), may request assistance from the ADGM Court (or any competent court) in taking evidence, 80  including assistance with:

1. the examination of witnesses (orally or in writing);
2. the production of documents;
3. the inspection, photographing, recording, preservation, custody or detention of any property; and
4. the taking of samples of any property and the carrying out of any experiment on or with any property. 81

6.11.1 The Regulations stipulate that (unless otherwise agreed), no party may publish, disclose or communicate any confidential information to any third party. 82 Confidential information is defined as any information relating to the proceedings under the arbitration agreement or an award made in those proceedings. 83

6.11.2 The Regulations make clear that they do not prevent the publication of confidential information in certain circumstances, including (by way of example and without limitation) where the publication is made to protect or pursue a legal right or interest of a party or to enforce or challenge the arbitral award. 84

6.11.3 Subject to any contrary agreement, the confidentiality obligations also do not prevent a party from disclosing or communicating confidential information to a third party who has a substantive legal or pecuniary interest in the outcome of the proceedings. 85

7.1.1 The arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the parties. Any law so chosen shall be construed, unless otherwise expressed, as directly referring to the substantive law of that jurisdiction and not to its conflict of laws rules. 86

7.1.2  In the absence of any designation by the parties, the tribunal shall decide the dispute in accordance with the rules of law it considers appropriate 87  and, in either case, the tribunal shall take trade usages into account. 88

7.2.1 The Regulations permit the tribunal to make more than one award at different times and in respect of different matters to be determined. 89

7.3.1If the parties settle the dispute during the course of the proceedings, the tribunal shall terminate the arbitration and, (if requested by the parties and agreed to by the tribunal), record the settlement in the form of an award on agreed terms. 90  Such an award shall state that it is an agreed award and will have the same effect as any award made on the merits of the case. 91

7.4.1 The arbitral proceedings are terminated by the arbitral tribunal’s award (or where there is more than one, by its final award), or by an order of the arbitral tribunal. 92  Such an order shall be given for the termination of the proceedings in the circumstances prescribed by the Regulations, for example where the parties agree to terminate the proceedings.  93

7.5.1 The Regulations dictate the form and contents of an award, specifying that:

• the award must be made in writing; 94
• the award must state the reasons upon which it is based, unless otherwise agreed or the award is being issued on agreed terms; 95  and
• the award must state its date and the seat of arbitration. The award will be deemed to have been made at the seat, irrespective of where it was written or signed, regardless of the method by which is it signed (i.e. in person or electronically). 96

7.5.2 Once the award is made, an electronic copy must be delivered to each party, with an original hard copy being delivered on request of a party. 97

7.6.1 Unless otherwise agreed in proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of its members. If there is no majority, the award shall be made by the president alone. 98

7.7.1 The tribunal shall fix the costs of the arbitration in the award. 99  The Regulations set out examples of what the term  “costs” includes:

• the tribunal’s fees and expenses;
• the costs associated with experts and of other assistance required by the tribunal;
• the travel and other expenses of witnesses;
• disbursements;
• costs of legal representation (if claimed in the arbitration);
• the costs of any party-appointed experts (if claimed in the arbitration); and
• the fees and expenses of the arbitral institution or appointing authority. 100

7.7.2 In deciding the costs of the arbitration, the arbitral tribunal may direct which party bears responsibility for such costs. 101

7.7.3  Where the arbitral tribunal does not fix the costs of the arbitration in its award, either party may, (within 30 days of receiving the award) apply to the tribunal for a further award on costs, which shall be made after the tribunal has heard the parties. 102

7.8.1 The parties to the arbitration may agree upon the tribunal’s powers with regard to the awarding of interest. 103  Furthermore, and subject to any contrary agreement, the tribunal’s powers shall be in accordance with the substantive law governing the claim. 104

7.8.2 Moreover, unless otherwise agreed and subject to any contrary provision in the substantive law applicable to the claim, the tribunal’s powers to award interest shall include (without limitation) the power to award simple or compound interest:

• from such dates, at such rates and with such rests as are required by the justice of the case, on the whole or part of the amount awarded or on the whole or part of any amount claimed in the arbitration and outstanding when it commenced, but paid prior to the making of the award; and
• from the date of the award (or a later date) until payment, at such rates and with such rests as are required by the justice of the case, on the outstanding amount of any award (including any award of interest or costs). 105

7.8.3 Any reference to an amount awarded by the tribunal in the context of interest includes an amount payable as a result of a declaratory award by the tribunal. 106

7.9.1 The parties are free to agree on the powers of the arbitral tribunal to correct or interpret an award or make an additional award. 107

7.9.2 If, or to the extent there is no such agreement 108 , under the Regulations, , a party may make a request for the correction of errors in or the interpretation of a specific point or part of the award within 30 days of receipt of the award (unless another period is agreed). 109  If the tribunal considers the request to be justified, it shall make the correction or give the interpretation within 30 days of receipt of the request and any modification shall form part of the award. 110  Furthermore, the tribunal may also make corrections using its own initiative within 30 days of the date of the award. 111

7.9.3 Additionally, unless otherwise agreed, either of the parties (upon notice to the other) may request an additional award in respect of any claims made in the arbitration but omitted from the award. Such requests must be made within 30 days and, if accepted, the supplemental award must be issued within 60 days. 112

7.9.4 Furthermore, the arbitral tribunal (where necessary) may extend the period of time within which it shall make a correction, interpretation or an additional award. 113

8.1.1 In matters governed by the Regulations, the courts have a supervisory function and shall not intervene except as provided for in the Regulations. 114

8.1.2 The instances of the courts’ involvement envisaged by the Regulations include (without limitation) appointing arbitrators, 115  determining challenges against arbitrators,  116  taking evidence, 117  and enforcing any injunctive relief awarded. 118

8.2.1 The Regulations stipulate that where a matter subject to an arbitration agreement is brought before the ADGM Court, the other party may apply (with notice to the other parties) for a stay of the ADGM Court proceedings. 119  The application must be made before any action has been taken to answer the substantive claim in those proceedings. 120

8.2.2 In such circumstances, the court shall stay the proceedings unless the arbitration agreement is null and void, inoperative, or incapable of being performed. 121  Moreover, where an application for the stay of proceedings has been made, an arbitration may nevertheless be commenced or continued and an award may be made whilst the issue is pending before the ADGM Court. 122

8.3.1 Irrespective of the existence of an arbitration agreement, the parties may still apply to the ADGM Court prior to or during the arbitration for measures relating to the taking of evidence or provisional or conservatory measures. 123  The ADGM Court shall have the same powers in issuing interim relief in relation to arbitration proceedings that it would have if the proceedings had been filed in Court. In any case, the ADGM Court shall act only if, or to the extent that, the tribunal or the arbitral institution has no power or is unable at that time to act effectively. 124

8.3.2 The powers conferred upon the ADGM Court by the Regulations apply even if: the seat of the arbitration is outside the ADGM; no seat has been designated or determined; or, the interim measure is sought against a non-party to the arbitration agreement. 125

8.3.3\ Should the case be urgent, the ADGM Court may (on the application of a party) make such orders as it thinks necessary for the purpose of preserving evidence or assets. 126  Alternatively, where there is no urgency, the ADGM Court shall act only on the application of a party to the arbitral proceedings upon notice to the other parties and the arbitral tribunal itself. 127

9.1 The Regulations stipulate that recourse to the ADGM Court against an award issued from an ADGM seat may only be made by an application for setting aside in accordance with section 58(2) of the Regulations. 128  The grounds upon which an award can be set aside are:

• the incapacity of a party; 129
• the invalidity of the arbitration agreement under the law to which the parties have subjected it, or failing any indication in this regard, the law of the ADGM; 130
• improper notice being given to the party against which the award is invoked of the appointment of an arbitrator or the proceedings, or where such party was prevented from presenting their case; 131
• the award dealing with a matter not contemplated or not within the terms of the submission to arbitration, or if it contains matters beyond the scope of the submission to arbitration; 132  or
• a failure to adhere to the parties' agreement and or the Regulations in appointing the tribunal or the procedure in general. 133

9.2  The Regulations also permit the court to set aside an award where the subject matter could not be arbitrated under the law of the ADGM or where the enforcement of the award would be contrary to the public policy of the UAE. 134

9.3 Any application to set aside an award may not be made after three months have elapsed from:

• the date upon which the applicant received the award;
• where the parties have agreed to any other arbitral process of appeal or review, the date when the application or appellant was notified of the result of that process;
• the date upon which any request for the correction or interpretation of an award or the issuance of a supplemental award was disposed of by the tribunal; or
• such a period of time as the parties have agreed in writing. 135

9.4 The Regulations specifically dictate that the ADGM Court must not undertake any review of the merits of the award either on a factual or legal basis. 136

10.1 The recognition and enforcement of an award under the Regulations can be undertaken in respect of:

• awards made in ADGM-seated arbitrations;
• awards issued under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention); and
• all other awards in respect of which recognition and enforcement is sought in the ADGM, irrespective of the state of jurisdiction in which they were made. 137

10.2 The party seeking enforcement shall provide to the ADGM Court the original or duly certified copy of the award in respect of which enforcement is sought and a copy of the arbitration agreement. If the award is not made in English, the ADGM Court may request the provision of a translation.  138

10.3 The Regulations set out that the recognition and enforcement of an award may only be refused by the ADGM Court where the party making the application provides proof that:

• a party to the arbitration agreement was incapacitated; 139
• the arbitration agreement was not valid under the law to which the parties subjected it, or failing any indication thereon, the law of the country where the award was made; 140
• proper notice of the appointment of an arbitrator or the proceedings was not given to the party against whom the award is invoked, or that party were otherwise unable to present their case  141
• the award deals with issues not contemplated by, or falling within the terms of the submission to arbitration, or it contained decisions on matters which were beyond the scope of the submission to arbitration; 142
• the composition of the tribunal or the arbitral procedure was not in accordance with the parties’ agreement or failing such agreement, was not in accordance with the law of the country where the arbitration took place; 143  or
• the award has not become binding or has been suspended or set aside by a competent authority in the country in which, or under the law of which, the award was made. 144

10.4 Further, the ADGM Court may refuse to recognise or enforce an award if the subject matter is incapable of being settled under the laws of the ADGM, 145  or because the award would be contrary to the public policy of the United Arab Emirates. 146

10.5 Importantly, any party seeking recourse against an award made in the ADGM shall not be permitted to make an application for the refusal of recognition or enforcement if it has made, or could have made, an application to set the award aside. 147