The updated DIFC-LCIA Arbitration Rules have now come into effect and apply to all arbitrations commenced in the DIFC since 1 January 2021.
The amended rules generally reflect the recent changes to the LCIA Arbitration Rules and aim to make the DIFC-LCIA arbitration process more streamlined, and respond to the rapid pace of change within the international dispute resolution community, partly a result of the obstacles presented by the Covid-19 pandemic.
The DIFC-LCIA Arbitration Centre was established in 2008 as a joint venture between the Dubai International Financial Centre (DIFC) and the London Centre of International Arbitration (LCIA). In the course of its establishment, the LCIA agreed to assist the DIFC in managing arbitrations under the DIFC-LCIA Rules.
The DIFC has since become a popular neutral forum for managing arbitrations between commercial parties across MENA, particularly Gulf states. The involvement of a trusted forum such as the LCIA serves to reinforce the legitimacy and defensibility of the arbitration process in the DIFC.
This has led to the DIFC-LCIA Arbitration Centre becoming a leading regional hub for arbitration, not least because an award issued from a DIFC-seated arbitration will be treated as an award made in a contracting state, as the DIFC Courts are treated as Courts of the UAE for the purposes of the New York Convention.
This means that awards made in the course of DIFC-LCIA arbitration are recognised as valid and binding by the New York Convention and so are readily enforceable in other jurisdictions.
Summary of some of the key changes
The changes are intended to make the arbitration process more efficient and user-friendly, as well as making more formal provision for virtual hearings.
A summary of some of the key changes is as follows:
- Early determination (Art. 22.1)
- Concurrent/consolidated arbitrations (Arts. 1.2, 2.2 and 22.7)
If a Request is not consolidated at the time it is made, on application by a party to the arbitration, the Arbitral Tribunal now has the power to order consolidation or concurrent conduct of separate arbitral proceedings, provided that:
- All parties to the proposed consolidated arbitrations agree to the consolidation in writing; and
- More than one arbitration is commenced under the same arbitration agreement or any compatible arbitration agreement, under the DIFC-LCIA Rules, either between the same disputing parties or concerning the same transaction/series of transactions. Additionally, either the Arbitral Tribunal may not have been formed, or if formed, it must consist of the same Arbitral Tribunal for each case intended for consolidated/concurrent management.
- Time for providing final award (Art.15.9)
- Default electronic working (Arts. 1.4, 4.1 and 19)
While the previous Rules provisioned for the use of video hearings, the new Rules explain unambiguously the manner in which remote hearings may be held, making the use of video hearings a more straightforward prospect.
- Clarification of Emergency Arbitrator's powers (Art. 9B)
- Clarification of Arbitral Tribunal's powers (Art. 14.6)
- Limit the length or content, or dispense with any written submissions including Statements of Case;
- Limit the written and oral testimony of any witness;
- Decide at what stage of the arbitration at which any issue or issues shall be determined;
- Dispense with any hearing; and
- Exercise its powers of Early Determination as explained above.
- Clarification of compliance powers (Art. 24A)
The DIFC-LCIA Arbitration Centre has the right to refuse any instruction where it has doubts about a party's compliance with such rules and may demand information and documents from any prospective party for the purposes of assessing compliance.
The previous edition of the DIFC-LCIA Rules was considered "light-touch", enabling parties to arbitration to maximise flexibility and efficiency.
While slightly more prescriptive in nature, the amendments in the new Rules are clearly intended to preserve and enhance that flexibility. Quite apart from the challenges of restricted travel and remote working caused by the pandemic, these amendments go some way to modernising the arbitral process generally, bringing the DIFC-LCIA in line with recent updates to other institutional rules.
Further, the provisions enabling consolidation and concurrent management of several arbitrations that arise from related disputes or transactions will lead to significant time and costs savings for parties involved in multiple disputes.
While tribunals arguably had wide powers of case management already, the new Rules are more explicit about some of the tools available. The addition of express powers and the increased focus on efficiency will encourage tribunals to enhance their role in the active management of a case.
This should, ultimately, assist in focusing the minds of the parties in dispute and help dispense with issues more quickly.
This article was authored by Fieldfisher dispute resolution partner Aymen Khoury and solicitor Suzanne Loding. For further information regarding dispute resolution in the DIFC please contact either Aymen or Suzanne.
Sign up to our email digest
Click to subscribe or manage your email preferences.