REUTERS | Ralph Orlowski

The 2017 DIAC Rules or Waiting for Godot… (Part 2)

This is Part 2 of a blog that discusses the belated formal adoption of the 2017 DIAC Rules, which, at the time of writing remains pending. Part 1 discussed the positive contribution made by the 2017 Rules to the provisions on the seat and venue of the arbitration, the wide definition and the blanket use of electronic communication to facilitate the virtual conduct of the arbitration and remote service, and the novel provisions on the arbitral award deemed issued at the seat. On each of these, Part 1 also highlighted the extent to which it would assist the promotion of core provisions of the UAE Federal Arbitration Law (FAL), which entered into force with effect from 16 June 2018.

Other provisions of the 2017 DIAC Rules deserve further consideration within the context of the FAL, either because they reinforce or complement procedural notions introduced by the new law. For the avoidance of doubt, to avoid duplication, changes upon which we commented in our previous blog on the launch of the 2017 DIAC Rules will not be repeated here and should be read in conjunction.

Expedited proceedings

Unlike the current version of the 2007 DIAC Rules, which provides for the expedited formation of the tribunal only, the 2017 DIAC Rules enable the conduct of the arbitration “on an expedited basis”, introducing a mode of expedited proceedings (article 18, 2017 DIAC Rules). This is modelled on the corresponding provisions of the International Chamber of Commerce (ICC) Rules of Arbitration, albeit that the 2017 DIAC Rules are more permissive in their scope of application. The provisions on expedited proceedings may apply upon the request of a party in a number of alternative circumstances (article 18.2, 2017 DIAC Rules):

  • Where the amount in dispute (exclusive of interest and legal costs) is below AED 2 million.
  • Upon the parties’ express agreement.
  • In the event of “exceptional urgency”.
  • If considered appropriate by the DIAC Executive Committee, taking into account all the circumstances.

Unlike the position under the ICC Rules, the DIAC expedited procedure rules do not apply by default.

Under the expedited procedure rules of the 2017 DIAC Rules, the arbitration will be conducted by a sole arbitrator, who will be appointed within seven days from full payment of the DIAC advance on costs and is required to render a final award within three months of being transferred the file (article 18.3(a) and (e), 2017 DIAC Rules). In order to expedite the arbitration process, the arbitrator will proceed on a documents-only basis (article 18.3(d), 2017 DIAC Rules), with a focus on “simultaneous and succinct statements of claim and defence [submitted by the parties] within 15 days from the date the file is transferred to the tribunal” (article 18.3(c), 2017 DIAC Rules). Despite the seemingly intended efficiency of this process, it is not clear how statements of claim and defence can meaningfully be subject to a simultaneous exchange between the parties. Clarification on this point would be welcomed in a revised version of the 2017 DIAC Rules.

For the avoidance of doubt, the FAL does not make provision for an expedited procedure and as such, stands complemented by the expedited procedure regime introduced by the 2017 DIAC Rules before their formal adoption.

Multiple contracts

Unlike the FAL, the 2017 DIAC Rules expressly facilitate multi-contract arbitration. A new article 8 provides for “claims arising out of or in connection with more than one contract” to be advanced in a “single arbitration”. Reference of multi-contract claims to a single arbitration within the terms of that article is conditional upon either (article 8(a) to (c), 2017 DIAC Rules):

  • Party agreement.
  • The multiple contracts that give rise to the claims “originating from the same economic relationship” between the parties.
  • The contracts containing compatible arbitration clauses, providing for arbitration under the DIAC Rules.

In addition, the claims must arise out of “the same legal relationship(s)” or out of “the same transaction or series of related transactions”, or the contracts concerned must be “a principal contract and its ancillary contract(s)”, such as would typically be the case with respect to main and sub-contracting arrangements in the construction sector.

This provision encourages parties to consolidate multi-contract claims in one arbitration proceeding, which will evidently produce significant procedural and cost efficiencies. The provision is broad in its application and does not necessarily require party agreement to come into operation. Importantly and for the avoidance of doubt, the UAE courts have, in the past, found disputes arising between the same parties under multiple sale and purchase agreements containing identical arbitration clauses arbitrable in one (as opposed to multiple) arbitration processes absent any jurisdictional objections. See, for example, Case No 478/2017, ruling of the Dubai Court of Cassation of 22 February 2018:

“…one of the established principles is that if there are multiple contracts, each of which contains an arbitration clause, then there is nothing in the law that prevents it from considering it in one case before one arbitrator as long as the parties did not agree otherwise. Since that was the case and the sale contracts in question did not include in the arbitration agreement that each dispute must be examined by a different arbitrator…”


The 2017 DIAC Rules empower the tribunal to award “the legal representation fees and other party costs, to the extent reasonably incurred” (article 2.1, Appendix Costs of Arbitration, 2017 DIAC Rules). This dispels any concerns that exist under the 2007 DIAC Rules to the effect that DIAC tribunals lack the power to award party costs in arbitration. This is a welcome amendment, which counterbalances the stricter approach prevailing under article 46 of FAL, empowering the tribunal to award the “costs of arbitration” within the limited meaning of that term only.

Importantly, recent case law precedent confirms that the reference to “legal fees” at corresponding article 28.4 of the DIFC-LCIA Rules confers upon a DIFC-LCIA tribunal the requisite powers to award party costs (see Case No 2/2019, ruling of the Dubai Court of Appeal).

By way of conclusion, it is fair to say that the 2017 DIAC Rules, albeit not entirely beyond criticism, have a lot going for them and will add constructively to the existing provisions of the FAL. That said, the wait is not over and who knows whether, on this occasion, Godot will ever arrive?

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