UAE Arbitration Law No. 6 of 2018 matters to any business that resolves disputes outside court. This federal law modernised arbitration in the UAE. It follows international standards like the UNCITRAL Model Law. This guide explains the law in plain terms. It also covers how the law connects to Federal Decree-Law No. 32 of 2021 on Commercial Companies.
What Is UAE Federal Law No. 6 of 2018?
Federal Law No. 6 of 2018 governs arbitration seated in the UAE. It replaced the old arbitration chapter in the Civil Procedure Code. The new law sets clear rules for tribunals, procedure, interim relief, and enforcement. As a result, arbitration in the UAE now runs on a modern, dedicated framework. The law covers domestic and international disputes alike, as long as the parties agreed to arbitrate.
Scope and Application of the Arbitration Law
The law covers civil and commercial disputes where parties chose arbitration. This includes onshore arbitrations in Dubai, Abu Dhabi, and other emirates. However, DIFC and ADGM arbitrations usually follow their own free-zone rules instead. Therefore, always check which seat and framework apply before you draft an arbitration clause.
Key Definitions and Principles
The law defines key terms clearly. These include “arbitration agreement,” “arbitral tribunal,” “seat of arbitration,” and “award.” It also protects core principles. These include party autonomy and the separability of the arbitration clause from the main contract. The law also confirms competence-competence: a tribunal can rule on its own jurisdiction. These principles give businesses more certainty when they add arbitration clauses to contracts.
The Arbitration Agreement Requirements
An arbitration agreement must meet two basic tests. First, it must be in writing. Second, a person with proper authority must sign it. UAE courts have long required specific board authorisation for this step. Law No. 6 of 2018 keeps this same level of formality. So, always check that your signatory holds the correct corporate authority. A defect here can let a party challenge the arbitration clause later.
Composition and Appointment of the Arbitral Tribunal
Parties can agree freely on the number of arbitrators and how to appoint them. If they cannot agree, the law provides a default option. Either party can ask the competent UAE court to appoint an arbitrator instead. The law also lists valid grounds to challenge an arbitrator. Justifiable doubts about independence or impartiality count as valid grounds. The law also explains how to replace an arbitrator who cannot continue.
Arbitration Proceedings and Procedural Rules
Once formed, the tribunal controls its own procedure. It can set the rules, choose the language, and pick the hearing venue. This applies unless the parties already agreed otherwise. The law also treats arbitration as confidential by default. Both the proceedings and the award stay private. This is a real advantage for firms that want to keep disputes out of public view.
Interim Measures and Court Assistance
Arbitral tribunals can order interim measures during a live dispute. For example, they can preserve evidence or protect assets. Parties can also go straight to UAE courts for urgent relief, such as a freezing order. This step does not waive the arbitration agreement. As a result, parties get two paths to protect their position while arbitration continues.
Arbitral Awards: Issuance, Recognition and Enforcement
An award must be in writing and signed by the arbitrators. It must also state its reasons, unless the parties agreed otherwise. After the tribunal issues the award, a party can ask the UAE court to ratify it. Once ratified, the award works just like a normal court judgment. The UAE also belongs to the New York Convention. This means UAE courts can recognise and enforce foreign awards from other member states. In turn, other Convention states can enforce UAE-seated awards too.
Related Framework: Federal Decree-Law No. 32 of 2021 on Commercial Companies
Many arbitration cases start as corporate or shareholder disputes. Federal Decree-Law No. 32 of 2021 governs company formation, governance, and dissolution in the UAE mainland. It also sets out shareholder rights and board duties. More companies now send these disputes to arbitration instead of court. So, it helps to understand how this law interacts with an arbitration clause in a shareholders’ agreement. Our team regularly helps clients draft clauses that work well alongside their corporate documents.
Frequently Asked Questions on UAE Arbitration Law 6 of 2018
General Questions on UAE Arbitration Law
What is UAE Arbitration Law No. 6 of 2018?
It is the federal law for arbitration seated in the UAE. It replaced the old rules in the Civil Procedure Code.
Does the law apply to DIFC or ADGM arbitrations?
Usually not directly. DIFC and ADGM arbitrations follow their own free-zone rules, though the core ideas match.
Why did the UAE pass a standalone arbitration law?
Lawmakers wanted a modern framework. It matches international standards and builds confidence for cross-border disputes.
Is arbitration confidential under UAE law?
Yes. Proceedings and awards stay confidential by default, unless parties agree otherwise or the law requires disclosure.
Can individuals use arbitration, or only companies?
Both can use it. The agreement just needs a valid signature and an arbitrable subject matter.
Questions on Arbitration Agreements and Tribunals
What makes an arbitration agreement valid?
It needs to be in writing. A person with real authority must sign it too.
Who appoints arbitrators if parties disagree?
Either party can ask the competent UAE court to appoint the arbitrator for them.
Can someone challenge or remove an arbitrator?
Yes. Valid grounds include doubts about independence, impartiality, or missing qualifications.
Can a manager bind a company to arbitration without board approval?
Usually not safely. UAE practice expects proper authorisation, or the clause can be challenged later.
What does competence-competence mean?
It means the tribunal can decide its own jurisdiction, including challenges to the arbitration agreement itself.
Questions on Awards and Enforcement
How does the UAE enforce an arbitral award?
A party asks the competent court to ratify it. After that, it works like a normal court judgment.
Can a foreign award be enforced in the UAE?
Yes. The UAE belongs to the New York Convention, so foreign awards from member states are usually enforceable.
Can a party challenge or set aside an award?
Yes, but only on limited grounds. These include serious procedural errors or an award that exceeds its scope.
Must a tribunal explain its award?
Yes, unless the parties agreed otherwise. The award must state its reasons.
What interim relief can a tribunal or court grant?
Both can order steps like preserving evidence or freezing assets while the case continues.
Questions on Commercial Companies Law 32 of 2021
What is Federal Decree-Law No. 32 of 2021?
It is the UAE Commercial Companies Law. It governs company formation, governance, and closure on the mainland.
How does this law connect to arbitration?
Many shareholder and corporate disputes under this law now go to arbitration through a valid clause.
Should a shareholders’ agreement include an arbitration clause?
Many businesses add one. It offers a private, internationally enforceable way to settle disputes.
Multilanguage Overviews
This section gives a short summary for an international audience. The full legal detail sits in the English text above.
العربية: يشرح هذا القانون الاتحادي رقم 6 لسنة 2018 إطار التحكيم في دولة الإمارات العربية المتحدة.
Français: Cette loi fédérale n° 6 de 2018 régit l’arbitrage commercial aux Émirats Arabes Unis.
Deutsch: Dieses Bundesgesetz Nr. 6 von 2018 regelt die Schiedsgerichtsbarkeit in den Vereinigten Arabischen Emiraten.
Español: Esta ley federal n.º 6 de 2018 regula el arbitraje comercial en los Emiratos Árabes Unidos.
Italiano: Questa legge federale n. 6 del 2018 disciplina l’arbitrato commerciale negli Emirati Arabi Uniti.
Čeština: Tento federální zákon č. 6 z roku 2018 upravuje rozhodčí řízení ve Spojených arabských emirátech.
Русский: Этот федеральный закон № 6 от 2018 года регулирует арбитраж в ОАЭ.
中文: 该2018年第6号联邦法律规范了阿联酋的仲裁程序。
עברית: חוק פדרלי זה מס’ 6 לשנת 2018 מסדיר את הבוררות באיחוד האמירויות הערביות.
Filipino: Ang pederal na batas na ito Blg. 6 ng 2018 ay namamahala sa arbitrasyon sa UAE.
हिन्दी: यह संघीय कानून संख्या 6, 2018 यूएई में मध्यस्थता को नियंत्रित करता है।
Disclaimer: This page gives general legal information about UAE Arbitration Law No. 6 of 2018. It does not count as legal advice. Laws and their interpretation can change. Please consult a qualified UAE lawyer for advice on your specific matter. For official legal texts, see the UAE Ministry of Justice. You may also find our Commercial Law in Abu Dhabi page helpful.