REUTERS | Juan Carlos Ulate

ADGM and EMAC on course for co-operation

Earlier last month, the ADGM Arbitration Centre (ADGMAC) and the Emirates Maritime Arbitration Centre (EMAC) signed a co-operation agreement (see Cooperation Agreement between the Abu Dhabi Global Market Arbitration Centre and Emirates Maritime Arbitration Centre, dated 8 September 2019) in an ambitious move to unite forces in the development and promotion of international commercial and maritime arbitration and mediation across the Middle East. Behind this ambition lies the idea that the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC), the home jurisdiction of the EMAC, serve both as attractive free zone seats and venues in their own right.

The measures of co-operation contemplated by the ADGMAC-EMAC Cooperation Agreement are all soft in nature. This is hardly surprising given that unlike the EMAC, the ADGMAC, which opened to the public in October 2018, is not an arbitration institution that administers cases under a set of rules of its own, but only a state-of-the-art hearing facility that offers its premises and logistics for arbitration hearings both domestically and internationally. As such, it is the only hearing centre of its kind in the Middle East today. Apart from serving as a venue for domestic and international arbitrations, the ADGMAC is dedicated to the promotion of arbitration and mediation in the Middle East. To that end, the ADGMAC has more recently published the ADGMAC Arbitration Guidelines, which endeavour to provide arbitration users, counsel and arbitrators with best practice guidance on the conduct of arbitrations seated in the ADGM or elsewhere in the world. In a similar vein, the ADGMAC entertains close ties with a number of worldwide leading arbitration institutions, including in particular the International Chamber of Commerce (ICC) International Court of Arbitration, which opened a UAE representative office in the ADGM in the first quarter last year.

The EMAC, by contrast, is a fully-fledged arbitration centre that administers arbitration proceedings in maritime disputes under its own set of rules, the 2016 EMAC Arbitration Rules. It operates out of the DIFC and its rules provide for the DIFC as a default seat of arbitration. DIFC-seated EMAC arbitrations are governed by the 2008 DIFC Arbitration Law and receive curial support from the DIFC courts. That said, the DIFC does not presently provide institutional hearing facilities for EMAC or any other arbitrations. For EMAC, therefore, a closer collaborative relationship with the ADGMAC makes accessible the ADGMAC’s state-of-the-art hearing facilities, which, in turn, will assist EMAC in promoting arbitrations under its own rules in a 21st century venue. This will also allow the EMAC to offer so-called “smart arbitration” services, a term adopted by the ADGMAC to describe the interactive electronic and telecommunications platforms it makes available to users of its facilities.

That said, the collaborative objectives pursued by the ADGMAC-EMAC Cooperation Agreement are cast in much wider terms and, as such, go beyond simple venue facilitation. Pursuant to Clause 4 of that Agreement, by entering into collaboration with each other, the ADGMAC and the EMAC seek to “promote the use of commercial and maritime arbitration and mediation”, to “enhance the accessibility, efficiency and effectiveness of commercial and maritime arbitration and mediation” and finally, in order to assist with the aforementioned objectives, to “provide a framework for the mutual sharing of information between them”. With a view to achieving these objectives, Clause 5 of the ADGMAC-EMAC Cooperation Agreement lists a number of obligations that the parties have agreed to undertake towards each other:

  • To “cooperate in the promotion and advancement of arbitration and mediation as a means of settling disputes arising out of commercial and maritime transactions” (see Clause 5(a)).
  • To “make available and provide [, upon request from the respectively other party,] hearing and meeting room facilities to assist with the conduct of any arbitration or mediation” (see Clause 5(b)).
  • To “provide such information and technical assistance in relation to such matters as hearing and meeting room facilities, hotels, translation, teleconference and transcription services, catering and any other matter as may be required to facilitate the effective and efficient conduct of the arbitration or mediation” (see Clause 5(c)).
  • To “exchange [, as appropriate,] information and publications on commercial and maritime arbitration and mediation” (see Clause 5(d)).
  • To “facilitate [, wherever possible,] lectures and associated learning opportunities of mutual interest in the areas of commercial and maritime arbitration and mediation” (see Clause 5 (e)).
  • To “recommend to the other [, upon request,] suitable individuals to serve as arbitrators or mediators on a particular matter or, as applicable, on their respective panels of arbitrators or mediators” (see Clause 5(f)).

These obligations of collaboration comprise both practical measures of co-operation that focus on the logistical management of an arbitration process, and in particular procedural meetings/hearings (see Clause 5(a) – (c)) and assistance in the constitution of arbitral tribunals and in particular the identification of suitable arbitrators (see Clause 5(f)). This latter obligation raises the question as to what role the ADGMAC is able to play in recommending arbitrator candidates, or requesting recommendations of arbitrator candidates, when it does not operate as an arbitration institution and, as such, does not have any appointment function or powers. The ADGMAC might be contemplating expanding the scope of its arbitration-relevant services on the basis of the ADGMAC-EMAC Cooperation Agreement, but if so, no public announcement to that effect has been made to date. It is also regrettable that the Agreement does not contain a mutual confidentiality undertaking with respect to the performance of the aforementioned obligations, which might involve the exchange of sensitive data and information on a case-by-case basis.

The remaining two obligations (see Clause 5(d) – (e)) are of educational import. They tend to promote the theory and practice of maritime and commercial dispute resolution by arbitration locally and internationally. Importantly in this context, a majority of maritime disputes raise questions of wider commercial scope that are not unique to the maritime industry, and the resolution of which do not require maritime industry expertise. This, in turn, explains EMAC’s wider interest in international commercial arbitration.

To conclude, the ADGMAC-EMAC Cooperation Agreement is an important step in consolidating institutional efforts in promoting the use of arbitration and alternative dispute resolution for the resolution of disputes and differences arising from maritime transactions, and from commercial transactions in the maritime industry, across the Middle East. Given the sheer number of arbitration-relevant institutions that have formed in the UAE over the past three decades, it is time to create synergies through institutional co-operation, both onshore and offshore, that will ultimately increase and maximise returns of individual institutional players in a fully integrated institutional environment.

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