ArbitrateAD Rules Match Pace Set in Regional Centres

The Abu Dhabi International Arbitration Centre (ArbitrateAD) replaced the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) effective 1 February 2024. ArbitrateAD’s aim is to be “the world’s leading catalyst for efficient international dispute settlement”. The ArbitrateAD Arbitration Rules 2024 (the ArbitrateAD Rules) certainly position ArbitrateAD to challenge other centres regionally and globally. The ArbitrateAD Rules incorporate international best practice throughout. Particularly noteworthy is the selection of the Abu Dhabi Global Market (the ADGM) as the default seat of arbitration; the default applicability of the expedited procedure to disputes with a value up to AED 9 million (c. USD 2.4 million) and the provisions enabling summary dismissal.

Given that many in the region will be evaluating ArbitrateAD against the arbitration rules of the ADGM Arbitration Centre, the Dubai International Arbitration Centre (DIAC) and/or the Saudi Centre for Commercial Arbitration (SCCA), we in this briefing summarise and contextualise the ArbitrateAD Rules against those of the ADGM, DIAC and the SCCA. Additionally, we provide two easy reference tables which compare the ArbitrateAD Rules against those of (i) the global “top 5” arbitration rules by case volume, i.e., the International Court of Arbitration (ICC), London Court of International Arbitration (LCIA), Singapore International Arbitration Centre (SIAC), Hong Kong International Arbitration Centre (HKIAC) and China International Economic and Trade Arbitration Commission (CIETAC) rules; and (ii) the Middle East’s most prominent arbitration rules, i.e., the ADGM, Bahrain Chamber for Dispute Resolution (BCDR), DIAC and Qatar International Centre for Conciliation and Arbitration (QICCA) rules. The two tables can be joined to allow comparison of any combination of rules.

Court of Arbitration

In January 2024, ArbitrateAD announced the appointment of its inaugural Court of Arbitration (the Court). The Court comprises 15 practitioners based in 11 jurisdictions and has supervisory authority over the Centre’s arbitration and dispute resolution services.¹  The Court’s powers include the appointment and replacement of arbitrators, the resolution of challenges to arbitrators or arbitration agreements, the disposition of requests for joinder or consolidation, and the scrutiny of awards.²

Nine-Month Time Frame for Issuing Awards

The rules of the Middle East’s major arbitral institutions now generally impose short time frames for issuing final awards, all of which may be extended upon the parties’ agreement. The ArbitrateAD Rules as a default position require Tribunals to make an award on the merits within nine months of the initial case management conference (CMC).³  The default nine-month time frame is longer than the six-month deadline under the old ADCCAC rules, which is the present position under the DIAC rules, but it remains a relatively short time frame when compared against those set by some of the international “Top 5” centres. For example, the LCIA rules impose a time frame of three months following the last submission from the parties, the HKIAC rules specify a time frame of three months from the close of the proceedings and the SIAC rules provide that a draft award is to be submitted within 45 days from the close of proceedings. Comparing the regional centres:

New Expedited Procedure Available

The expedited procedure stipulates that an award shall be issued within four months from the date the case file is submitted to the Tribunal. The ArbitrateAD Rules stipulate that the expedited procedure applies by default if the amount in dispute, i.e., the aggregate of all claims and counterclaims, does not exceed AED 9 million (c. USD 2.4 million).⁶  The Tribunal can (i) apply the expedited procedure for disputes above this value or (ii) disapply the procedure where it would apply by default if the parties agree or the Tribunal directs after affording the parties an opportunity to be heard.⁷

The introduction of an expedited procedure in the ArbitrateAD Rules reflects international best practice and brings the ArbitrateAD Rules in line with the rules of the SCCA and DIAC, both of which, like the ArbitrateAD Rules, afford parties the option of agreeing to apply expedited procedure rules irrespective of whether the stipulated maximum dispute value has been exceeded. Notably, the default ceiling under the ArbitrateAD Rules is slightly below that of the ICC (c. USD 3 million), but nine times greater than the DIAC ceiling (AED 1 million) and more than double the SCCA ceiling (SAR 4 million, c. AED 3.9 million):

Default Seat

Mirroring the DIAC rules’ default stipulation in favour of the Dubai International Financial Centre (DIFC), the default seat of arbitration under the ArbitrateAD Rules is the ADGM.¹¹  By way of background for readers unfamiliar with the landscape: the ADGM and the DIFC are financial free zones with independent jurisdictions exempted from the United Arab Emirates’ civil and commercial laws. The free zones’ legal and regulatory frameworks are based on international standards and principles of English common law. In broad terms, the point of distinction between the financial centres is that the ADGM has chosen to reflect English common law on an “evergreen basis” by giving English caselaw direct precedential status,¹²  whilst in the DIFC - as was made clear in the recent DIFC Court’s decision in Industrial Group - English law principles cannot be imported to “fill” any gaps in DIFC statutes.¹³ 

Early Determination of Cases

Article 45 of the ArbitrateAD Rules allows for the early (or summary) dismissal of claims or defences that are manifestly without legal merit or manifestly inadmissible or outside of the tribunal’s jurisdiction.¹⁴  Any application for early dismissal shall be granted or denied within 30 days of its filing unless the Tribunal deems it necessary to extend the deadline by a maximum of 15 days. This effectively mirrors the SCCA position. The ADGM regulations likewise make provision for summary dismissal, albeit without a time limit on determination. The DIAC rules are silent on summary dismissal; however, the authors are aware of instances where summary dismissal applications have been considered and granted. For context:

In addition, emergency arbitrators can be appointed pursuant to Article 35 of the ArbitrateAD Rules. Once appointed, the emergency arbitrator shall have the same powers as vested in the Tribunal, including authority to decide any issues as to their own jurisdiction and to order any interim measures they deem appropriate.¹⁸  Often, especially in the region, parties are seeking interim measures as a matter of urgency; the ArbitrateAD Rules’ provision of quick routes for at-risk parties to better secure and enforce their rights will be welcomed. Comparing the regional rules:

Joinder and Consolidation

A request to join an additional party to an arbitration can be submitted to the Case Management Office and must be made no later than the time the Answer is filed.²³  No party may be joined unless all parties agree (including the additional party), or the Tribunal determines that the additional party is subject to the jurisdiction of the centre.²⁴ The comparative position on joinder:

In terms of consolidation, the ArbitrateAD Rules sensibly allow for claims arising from more than one contract to be brought in a single arbitration, which was not the case in the previous ADCCAC Rules.²⁶  If the responding party objects, the Court in determining whether to allow the multi-contract arbitration shall consider if the various arbitration agreements are compatible, the nature of the relief sought, and the likely efficiency and expeditiousness of the proceedings. The comparative position on consolidation:

Harnessing Technology

Initiatives such as the campaign for greener arbitrations have inspired many centres, including the SCCA and DIAC, to introduce provisions encouraging electronic communications and remote hearings. The ArbitrateAD Rules give the Tribunal discretion as to the mode of hearings, for instance the technology adopted,²⁸  but the ArbitrateAD Rules do not—unlike the SCCA rules—include environmental impact as a consideration for the Tribunal or parties to consider in respect of the conduct of the arbitration. Some commentators may regard this as a missed opportunity; however, the ArbitrateAD Rules grant Tribunals the “broadest of powers” in the conduct of proceedings, and there is consequently sufficient latitude for the adoption of new technology and for environmental factors to be considered. The comparative position:

New Disclosure Requirements for Third-Party Funding

Reflecting the increasing use of third-party funding in the region, the ArbitrateAD Rules feature similar requirements to those of the ADGM, SCCA and DIAC rules: Parties must promptly disclose any third-party funding arrangements, and if an arrangement is in place prior to the initiation of proceedings, then a claimant must disclose this in the Request for Arbitration.³²

Robust Confidentiality Provisions

The ArbitrateAD Rules introduce a comprehensive confidentiality regime which aligns with international standards.³³  Whilst retaining the pre-existing obligation on parties to maintain the confidentiality of awards, the ArbitrateAD Rules expressly give the tribunal power to enforce confidentiality obligations, take measures to protect confidentiality and trade secrets, and to issue an order or award for sanctions or damages in relation to wrongful disclosures.³⁴

Court Review of Awards & Waiver of Right to Appeal

Consistent with DIAC and the SCCA, ArbitrateAD’s Court will undertake the procedural review of awards. The ArbitrateAD Rules require Tribunals to consult the Centre’s Award Checklist when issuing an award.³⁵  The checklist is designed to assist arbitrators in their drafting and ensure the enforceability of awards rendered. The checklist will be published and amended periodically by the Centre. In scrutinising awards, the Court may suggest non-substantive modifications to the Tribunal, including drawing the Tribunal’s attention to any required changes to the form of the award, apparent clerical errors, inconsistencies or omissions in the Award, or to matters addressed in the Award Checklist.³⁶  The role of the Court in this respect is consistent with DIAC and the SCCA but more limited than that of the ICC Court, which has the power and regularly does comment and draw the attention of Tribunals to points of substance.³⁷

The ArbitrateAD Rules state that the parties are deemed to have waived all rights to appeal an award, including before any state court.³⁸  The only exemptions expressly provided for under the ArbitrateAD Rules are where a correction or interpretation of an award is required,³⁹  or where the award has failed to adjudicate on claims asserted during the arbitration.⁴⁰  Comparatively: the DIAC rules are silent on appeal, while the SCCA rules are aligned with the ArbitrateAD position.⁴¹

Transitional Position

The ArbitrateAD Rules will apply to arbitrations commenced on or after 1 February 2024 where the parties have agreed to submit their disputes to arbitration under the ADCCAC rules. Cases still pending at the ADCCAC will continue to be administered in accordance with the 2013 ADCCAC Rules.

If you would like to discuss and/or receive training on the ArbitrateAD and/or any other arbitral rules, please contact Senior Counsel Ryan Whelan on rwhelan@akingump.com.

A special thank you to Alyazya AlQubaisi for her contributions to this alert.

^{1 Article 3(2).}

^{2 Article 3(3).}

^{3 Article 38(1).}

^{4 Article 35 of the DIAC Rules.}

^{5 Article 33 of the SCCA Rules.}

^{6 Article 36(1).}

^{7 Article 36(3) and 36(4).}

^{8 Article 36.}

^{9 Article 32 of the DIAC Rules.}

^{10 Appendix II of the SCCA Rules.}

^{11 Article 22.}

^{12 English Law in ADGM – Guidance Notes, para 2.3.}

^{13 The Industrial Group Limited v Abdelazim EL Shikh EL Fadil Hamid [2022] DIFC CA 005 and CA 006.}

^{14 Article 45(1).}

^{15 Article 42 of the ADGM Arbitration Regulations.}

^{16 Article 17.2 of the DIAC Rules.}

^{17 Article 26 of the SCCA Rules.}

^{18 Article 35(10) and (12).}

^{19 Articles 28 and 31 of the ADGM Arbitration Regulations.}

^{20 Articles 25 and 34 of the ADCCAC Regulations.}

^{21 Appendix 11 – Article 2 of the DIAC Rules.}

^{22 Article 7 of the SCCA Rules.}

^{23 Article 11(2).}

^{24 Article 11(4).}

^{25 Articles 8 and 9 of the DIAC Rules.}

^{26 Article 10.}

^{27 Articles 12 and 13 of the SCCA Rules.}

^{28 Article 33(2).}

^{29 Articles 34 & 55.}

^{30 Articles 26 & 34.}

^{31 Articles 25 & 36.}

^{32 Article 48.}

^{33 Article 47.}

^{34 Article 47(4).}

^{35 Article 41(7).}

^{36 Article 40(2).}

^{37 Article 34 of the ICC Rules.}

^{38 Article 41(12).}

^{39 Article 42. The right of a party to request the Tribunal to correct or interpret the award is provided for under the rules of each of the Middle East’s most prominent arbitration centres as well as the “top 5” arbitration centres.}

^{40 Article 43. A party may request the Tribunal to issue an additional award on this basis under the SCCA rules (Article 39), the DIAC rules (Article 37), the BCDR rules (Article 37) and the QICCA rules (Article 40) as well as under the rules of each of the “top 5” arbitration centres.}

^{41 Article 3(2) of the SCCA Rules.}