Emirates Maritime Arbitration Centre: a new forum for resolution of maritime disputes in the UAE
The Chairman of the Emirates Maritime Arbitration Centre (EMAC), Sir Anthony Colman, has said that “The primary function of EMAC is to provide flexible and neutral mechanisms to effortlessly settle disputes within the maritime sector in UAE.” Situated in Dubai, EMAC began operating in September 2016 and was officially launched in November 2016. With the establishment of EMAC, the UAE now has a specific set of rules and a forum for those in the maritime industry wishing to resolve their disputes in the Middle East region.
EMAC has been established to cater specifically for disputes in the maritime industry and is the first arbitration institution of its kind in the Middle East region. It has drawn from the knowledge and experience of well-established maritime arbitration institutions in other jurisdictions, as well as from practitioners in the region, and has tailored its Rules to enable the quick and efficient resolution of international and domestic maritime disputes through arbitration and mediation.
One of the key features by which EMAC seeks to distinguish itself is a less heavy-handed approach to case management and less onerous requirements on the parties in this regard. The intention is to be flexible and respect the parties’ intentions. Further features include the appointment of a sole arbitrator by default, provision for emergency arbitrations and an expedited or “fast track” arbitration procedure. The EMAC model clause provides for DIFC (Dubai International Financial Centre) as the seat of the arbitration unless parties agree otherwise. DIFC is also a default seat in the absence of the parties’ agreement on another seat.
Notably, stipulation of a DIFC seat is significant because it gives parties access to the DIFC legal system, which includes an arbitration friendly DIFC Arbitration Law, and the DIFC Courts, which are English speaking common law courts, as a supervisory jurisdiction. The arbitral awards issued in the DIFC can be enforced both in the DIFC and outside the DIFC via the mechanism provided for in the Dubai Judicial Authority Law.
Any final award delivered by EMAC in the UAE will also be enforceable outside the UAE in any New York Convention signatory state as the UAE is a signatory to the New York Convention.
The EMAC Arbitration Rules (“the Rules”) were drafted based on the UNCITRAL Arbitration Rules 2010, as adapted to conform to EMAC’s objectives.
The Rules permit electronic service of the notice of arbitration (Article 3) and response to notice of arbitration (Article 4), which is intended to make the process more efficient. The parties will be able to serve these documents using electronic forms via the EMAC website.
In addition, recognising the often urgent nature of maritime disputes, the Rules allow for the appointment of an emergency arbitrator (Article 12) to deal with the situations where urgent consideration of aspects of the dispute are required, such as where interim relief is being sought by one of the parties, or there is an emergency issue that needs to be dealt with in the interests of justice.
In such cases, prior to the formation of the tribunal, a party may apply to the EMAC registrar for immediate appointment of an emergency arbitrator. He/she may hold a hearing and decide on any claim for interim relief, order and award and will do so within 14 days of his/her appointment. Such an order or award from the emergency arbitrator can later be confirmed, varied or revoked, once the tribunal is properly constituted.
The costs and calculation of the Tribunal’s fees are four fold. These include: (1) the registration fee based on the value of the dispute; (2) the Arbitral Tribunal appointment fee (excluding administrative supervision) fixed at AED 4,000 (approximately USD 1,087); (3) the EMAC administration fees based on the value of the dispute; and (4) the Tribunal’s fees determined on an hourly basis. Full details of costs can be found on the EMAC website.
Delays in the arbitration process are often an issue encountered by parties seeking to resolve their disputes. To address this, the Rules stipulate a time limit for issuing an award (Article 36). The Arbitral Tribunal is required to issue a final award 90 days from the date when all hearings/submission of documents are deemed closed.
The Rules are also clear that transparency is an important factor. In particular, the Rules impose a specific requirement on the arbitrators to disclose all circumstances that may potentially create doubt as to their impartiality or independence as arbitrators when their appointment is sought. The same can be said of EMAC’s approach to making the costs of the arbitration and tribunal fees clear from the outset.
In addition, EMAC has created a set of Mediation Rules and a model mediation clause for parties to adopt. The Mediation Rules comply with international best practice in mediation and allow parties to make a written request for mediation whether or not the model clause is adopted.
Notably, Article 11 of the Mediation Rules provides that if amicable settlement is reached, the parties may agree for this to be registered in writing in the form of an arbitration award made by consent. In that case, the mediator will act as a sole arbitrator. This greatly simplifies the enforcement of any settlement, which would be enforced by way of the agreed arbitration award, in the event that one party breaches the settlement agreement.
The establishment of EMAC is testament to Dubai’s commitment to promoting and developing Dubai as an international maritime centre.
Inevitably, it will take time before we can truly assess whether EMAC is going to be successful. However, all the current signs point to this being a positive development for the maritime industry in the region. Further details of the EMAC Arbitration and Mediation Rules can be found on the EMAC website.
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