REUTERS | Lucy Nicholson

2022 DIAC Rules: Out at Last! (Part 1)

Following a gestation period of well over five years (predecessors of the 2022 version of the Rules having surfaced for the first time in 2017, reported in Part 1 and Part 2 of a previous blog), the new Rules of Arbitration of the Dubai International Arbitration Centre (DIAC) have, at long last, been published in their 2022 version. This, no doubt, has been facilitated by the reinvention of the DIAC following the adoption of Dubai Government Decree No. 34 of 2021 concerning the Dubai International Arbitration Centre (Decree No. 34/2021).

Decree No. 34/2021 sought to elevate a re-constituted DIAC, a DIAC 2.0 or a grand DIAC, to an institutionally superior level by converting it into Dubai’s only leading arbitral institution (while dispensing with the Dubai International Financial Centre (DIFC)–London Court of International Arbitration (LCIA) and the Emirates Maritime Arbitration Centre (EMAC)). Part of this masterplan was to:

  • Establish a DIAC Board of Directors and a DIAC Court, this latter modeled on the LCIA Court and the International Chamber of Commerce (ICC) International Court of Arbitration.
  • Adopt a new set of DIAC Rules within six months from the date of entry into effect of Decree No. 34/2021, that is, by 20 March 2022.

Following the establishment of the new DIAC Board of Directors and of the DIAC Court by earlier this year, the DIAC Rules 2022 were adopted by the DIAC Board of Directors on 25 February 2022 and came into force on 21 March 2022. The Rules “apply to arbitrations which commence after the date on which the Rules came into force” (article 2.3, DIAC Rules 2022), that is, arbitrations commenced on 22 March 2022 or after, irrespective of the date of the underlying arbitration agreement (the commencement of a DIAC arbitration being defined by reference to the “date of receipt by the Centre of the […] Request [for arbitration]” (article 4.6, DIAC Rules 2022). Importantly, in the interpretation of the new Rules, it must be borne in mind that these were originally drafted in the English language (and in a second instance only translated into Arabic).

The new Rules take after other leading institutional sets of arbitration rules, such as the LCIA and the ICC Rules of Arbitration. In this sense, they pursue DIAC’s pronounced ambition to grow into a globally leading arbitral institution over the next five years.

Some of the notable changes introduced by the 2022 DIAC Rules are summarised for an initial taster in this blog, which is published in two parts.

Virtual conduct of DIAC arbitration

 Alerted, no doubt, by the ongoing COVID-19 pandemic, the new DIAC Rules take care to facilitate the virtual conduct of an arbitration (thus echoing the approach taken by the 2018 UAE Federal Arbitration Law (FAL)). To that end, communications may be made “by email or any other means of telecommunication agreed by the parties that provides a record of its sending” (article 3.4, DIAC Rules 2022). The DIAC request for arbitration and the answer thereto, including all accompanying documents, are, by contrast, required to be filed with the DIAC “by email or in accordance with the terms of use of any electronic case management system implemented by the Centre” (articles 4.3 and 5.3, DIAC Rules 2022) This provision is mandatory (note the use of the modal auxiliary “shall”) and essentially does not allow the filing of paper copies, neither of the request nor of the answer. For the avoidance of doubt, at the time of writing, the creation of an electronic case management system remains under process.

Hearings, including for purposes of oral testimony, may be held, at the tribunal’s directions, “by telephone or through any other appropriate means of virtual communication including video conferencing” (article 26.1, DIAC Rules 2022). To that end, the tribunal will also have the power “to accept oaths […] and conduct examinations […] by telephone or through any other appropriate means of virtual communication including video conferencing, provided it has first satisfied itself of the identity of the witness” (article 27.6, DIAC Rules 2022). The preliminary meeting (in the terms set out below) may be held “by telephone or through any other appropriate means of virtual communication including video conferencing, as may be agreed by the parties or determined by the Tribunal in consultation with the parties” (article 23.2, DIAC Rules 2022).

The Rules authorise the electronic signing of awards (articles 20.3 and 34.6, DIAC Rules 2022), which requires a “certified electronic software or service, which allows the digital verification of the signatory’s identity and their intent to sign the document”. Ink signature, by contrast, will still require each page of the hard copy document to be signed, as used to be the case under the old Rules.

Time-limits and expedited proceedings

To safeguard the procedural efficiency of DIAC proceedings, the time-limits under the new Rules have been significantly reduced. For example, the DIAC will only grant a maximum of ten days’ extension for service of an answer to a Request for Arbitration (article 5.7, DIAC Rules 2022), compared to 14 days under the old Rules. A preliminary meeting is due within ten days from transmission of the case file to the tribunal (article 23.1, DIAC Rules 2022), as opposed to 30 days under the old Rules. Importantly in this context, the computation of time-limits under the new Rules is based on calendar (as opposed to business) days (article 3.7, DIAC Rules 2022). The final award remains due within six months from the date of transmission of the case file to the tribunal albeit that in digression from the old Rules, the extension of that time-limit is subject to party agreement or a reasoned application by the tribunal to the DIAC Court (should the DIAC Court not decide to extend ex officio) (article 35.3, DIAC Rules 2022). Regrettably, unlike the position under the old Rules, the Tribunal is no longer empowered to extend the time-limit for rendering the final award by six months e proprio motu (of its own motion).

A new article 32 introduces a regime for expedited proceedings, similar to the one in use under the ICC Rules. The proceedings are principally dealt with on an expedited basis provided that the aggregate amount in dispute (excluding interest and costs of legal representation) does not exceed AED 1 million or if agreed by the parties in writing. An expedited procedure is conducted by a sole arbitrator, typically on a documents-only basis, with the award being due within three months from transmission of the case file to the sole arbitrator.

Party representation

Under the new DIAC Rules 2022, in terms similar to those of the LCIA Rules, albeit that a party has freedom of choice with respect to its party representatives, appointment of new counsel requires approval from an already constituted tribunal in order to avoid conflicts of interest (article 7.5, DIAC Rules 2022).

A party is also under an obligation, insofar as possible and again in terms similar to those of the LCIA Rules, to ensure the ethical and professional conduct of its party representatives and that they have sufficient time available to conduct the arbitration process efficiently and with due expedition (article 7.2, DIAC Rules 2022).

To be continued…

 

 

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