Arbitration of Disputes in the United Arab Emirates

The foregoing preamble, found in the dispute resolution clauses of many contracts in the UAE and the Arabian Gulf region, seems singularly optimistic to most Western attorneys, but it nevertheless expresses the regional cultural preference for a negotiated settlement. Unfortunately, even the best of intentions cannot resolve all disputes, and so such clauses inevitably move on, at the urging of counsel, to specify the chosen method for compulsory resolution of disputes. As often as not, where foreign companies are concerned, such clauses in business agreements in the UAE provide for arbitration. The reasons for this are the customary ones: lack of familiarity with the local judicial system; a suspicion of pro-national bias in the courts (particularly when, as is often the case in the Arabian Gulf, one of the contracting parties may be the local government); a desire to eliminate the perceived formality of judicial proceedings; the possibility of English language proceedings; and the expectation of savings in time and expense. Arbitration under Islamic law is said to have its origins in the hearing and resolution of disputes by the prophet Mohammed at a time when, owing to the absence of an organised judicial system, all disputes were resolved on an ad hoc basis and there was no formal distinction between conciliators, arbitrators and judges. The jurisprudence of arbitration under Shari'a principles has since been developed and elaborated by Muslim legal scholars and judicial authorities as an adjunct to the jurisdiction of the Shan'a courts, but its religious orientation (e.g., the requirement that arbitrators must have the qualifications of Muslim qadis or judges), has limited the appeal of such Shan'a-based arbitration in the international commercial context of more recent times. Thus in most countries of the Arab world there has existed for some time a tradition of legally sanctioned private arbitration outside the scope of strict Shan'a principles, in many cases based on legislation adapted ultimately from Western legal