Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, has confirmed the combining of the DIFC Arbitration Institute (DAI) with the Emirates Maritime Arbitration Centre (EMAC). The unified entity will be called the Dubai International Arbitration Centre (DIAC), an autonomous, permanent, non-profit institution that provides regional and international business communities a high caliber of arbitration services.

The announcement follows the issuance of Decree 34 of 2021 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai. The consolidation of DAI and EMAC will enhance Dubai’s capabilities to compete on the international stage with other global arbitration centres. The objectives of DIAC include strengthening the position of Dubai as a reliable global centre for settlement of disputes by way of alternative dispute resolution. Additionally, it will ensure that DIAC is one of the best choices globally for resolving disputes efficiently and effectively by applying international best practice.

Current arbitration services will continue without interruption for users. All agreements entered into by DAI and EMAC will be valid and effective with DIAC.

In line with the provisions of Article 9 of the Decree, and to ensure continuity of proceedings referred to the DIFC-LCIA Arbitration Centre (DIFC-LCIA) – operated by DAI pursuant to a joint venture with the London Court of International Arbitration (LCIA) – it has been proposed that LCIA will directly administer all ongoing arbitrations, mediations and other ADR proceedings referred to the DIFC-LCIA. Under this proposal, the DIFC-LCIA Registrar and Secretariat will administer all ongoing proceedings for and on behalf of the LCIA on a secondment basis from DIAC until such proceedings are concluded. There will be no change or interruption to the services provided to parties and arbitrators to proceedings referred to the DIFC-LCIA.

From the date of the enactment of the Decree, parties to contracts should not include arbitration agreements which provide for the resolution of disputes in accordance with the DIFC-LCIA Rules or for the DIFC-LCIA to administer, or to act as appointing authority in arbitrations, mediations or other ADR proceedings, pursuant to other, ad hoc, rules or procedures. All arbitrations, mediations and other ADR proceedings arising out of agreements referencing the DIFC-LCIA and referred for resolution after the date of the enactment of the Decree will be administered by DIAC in accordance with the DIAC Rules, unless the parties thereto agree otherwise.

The Decree also provides for a key role to be played by the DIFC in that it shall be the default seat in circumstances where parties fail to agree on a seat or legal place of arbitration with the consequence that the arbitration agreement shall be governed by the provisions of DIFC Law 1 of 2008 and the DIFC Courts shall have jurisdiction over any case, request or challenge concerning any arbitration award or procedure issued by the DIAC arbitration tribunal. Otherwise, where Dubai has been selected as the seat or legal place of arbitration, the provisions of Federal Law 6 of 2018 will apply to the arbitration and the Dubai Courts shall have jurisdiction over any case, request or challenge concerning any arbitration award or procedure issued by the DIAC arbitration tribunal. These provisions are subject to what parties to the arbitration may agree.

The Decree also provides DIAC with a new Statute that introduces a new organisational structure into the unified body in the form of a Board of Directors, Court of Arbitration and an Administrative Body. Clear and comprehensive principles and requirements for DIAC have been set out in the decree that align with international best practice.

Commenting on the merger, H.E. Essa Kazim, Governor of DIFC, said: “The decision to unify the efforts of the arbitration centres will greatly contribute to consolidating Dubai's position as a global hub for resolving disputes. DIFC is fully supportive of the approach which enhances the position of the Centre as a preferred option for resolving disputes efficiently and effectively by following international best practices, in a manner that serves the financial and business community.”

Essam Al Tamimi, the former Chairman of the Board of Trustees of DAI, said: “The DIFC-LCIA has contributed tremendously to the progress of arbitration in the UAE.  With the enactment of the UAE Arbitration law, the existing modern DIFC Arbitration law and the position that Dubai currently plays in commerce and trade in the region and worldwide, it was natural to unify Dubai’s efforts to create a renowned international arbitration centre. I am certain that the legal community and practitioners in a few years will look back at this decision and will certainly be convinced that this is the best thing that happened to the progress of arbitration in Dubai and the United Arab Emirates. It will be an excellent service to the region and beyond.”

H.E. Ahmed Bin Meshar, Secretary General of the Supreme Legislation Committee of the Government of Dubai added: “The arrangements agreed with LCIA in the above regard are fully within the remit of the Decree and fully supported by us.”