Ministry of Economy highlights key role of amendments to arbitration law in enhancing UAE economy’s competitiveness and its global status

H.E. Al Saleh: Our goal is to support arbitration bodies and centers operating in the country, thus enhancing the national business environment

The Ministry of Economy (MoEc) held a media briefing to review the most prominent developments in legislation and policies designed to support and develop the UAE’s national economy. These include the issuance of Federal Decree Law No. 15 of 2023 amending some provisions of Federal Law No. 6 of 2018 on arbitration, which aims to boost sustainable development in light of the objectives of the ‘We the UAE 2031’ vision.

H.E. Abdullah Al Saleh, Undersecretary of the Ministry of Economy, stated that the UAE government continues its efforts to develop the country’s economic legislation through the establishment of flexible and more efficient, progressive laws that enhance the attractiveness of its business environment. Thus, these efforts contribute to increasing investor confidence in the local economy and enhancing the UAE’s position as a permanent hub for trade and investment.

H.E. Al Saleh explained that the announcement of the issuance of Federal Decree Law No. 15 of 2023 amending some provisions of the Federal Law No. 6 of 2018 on arbitration is a result of concerned efforts by all partners at the federal and local levels and partners from the various arbitration bodies in the country.

The Undersecretary said: “The Ministry of Economy recognizes that the development of the economic regulatory and legislative environment; strengthening of the business environment and its governance; and the consolidation of innovation practices based on flexibility, proactiveness and future preparedness are the basic tools for enhancing the overall competitiveness of the UAE economy and supporting its prestigious position among the strongest economies in the world.”

H.E. added: “The amendments to the Arbitration Law is one of these tools through which the Ministry aims to bring about a qualitative shift in the country’s business environment and support its knowledge-based economic model powered by new economy sectors. This will be achieved by developing an arbitration mechanism that boasts the highest levels of responsiveness, resilience, and economic and business dispute resolution in accordance with global best practices. It will support the sustainable growth of the national economy while ensuring the highest standards of transparency and fair competition.”

H.E. noted that while preparing the draft amendment to certain provisions of Federal Law No. 6 of 2018 on arbitration, the Ministry of Economy took into account the views and observations of relevant stakeholders including arbitration centres and institutions in the country, as well as arbitrators, who are key partners supporting the UAE’s development journey.

The Undersecretary of the Ministry of Economy highlighted the most prominent provisions and items addressed by the amendment, which are as follows:

• Allows all arbitration work to be conducted through modern technological means or in tech communities as compared to the previous law, which limited the handling of modern technological means to meetings only.
• Allows the appointment of an arbitrator who is a member of the Board of Directors or Trustees of the arbitration institution handling the case, in accordance with regulations guaranteeing integrity and impartiality and avoiding conflicts of interest.
• The regulations and conditions referred to therein require the arbitrator to not be a member or president of the arbitral tribunal, that the regulations of the arbitral institution concerned do not preclude this, and that the appointment, removal, recusal, and work of the arbitrator be regulated.
• Introduces legal consequences against the arbitral institution and the arbitrator if the governance conditions referred to are violated, beginning with the invalidity of the arbitral award and civil compensation for the wronged.
• Allows confidentiality of arbitral work unless otherwise agreed by the parties, as compared to the previous text, which restricted confidentiality to meetings only, and does not extend to the full coverage of arbitral works.
• Authorizes the parties' agreement to arbitral proceedings, including subjecting these proceedings to the rules of any arbitral organization or institution in or outside the country, and granting the arbitral tribunal jurisdiction to determine them in the absence of an agreement that contradicts the fundamental principles of litigation and international conventions to which the country is a party.
• Establishes arbitral institution’s discretion, which is not contrary to public order concerned with determining the rules of evidence to be followed in the absence of an agreement and the absence of evidence from the applicable law.
• Grants the arbitral tribunal greater discretion in respect of statements, whether in terms of acceptance or assessment of their association with any fact, opinion, experience, time, method, or form for the exchange of such statements between the parties and the manner in which they are submitted to the arbitral tribunal.

He added that the amendments to the Arbitration Law are in response to the request of the country’s arbitration institutions and centres to address a number of existing challenges that hinder the recruitment of competent international arbitrators and the formation of partnerships with international arbitral institutions, especially the permission to appoint the arbitrator as a member of the arbitral tribunal handling the case in the same arbitral institution or centre where the arbitrator is a member of the board of directors, board of trustees, or judgement.

In conclusion, the Undersecretary affirmed that these amendments are a new milestone in the economic legislative structure designed to boost inward domestic and foreign investment flows and keep pace with the latest international trends in the field of arbitration. He pointed out that it will promote the UAE's ranking as a leading hub in the adoption of forward-looking legislation, especially after permitting all arbitration work to be conducted via modern technological means or in tech communities. These adjustments will also contribute to accelerating the national economy’s digital transformation and will play a key role in advancing the UAE’s arbitration bodies, ultimately driving sustainable and inclusive development.