DUBAI — Fast and reliable resolution of commercial disputes via arbitration outside the court system can attract more foreign investment into Dubai, according to a senior UAE judge.
The economic boom recently witnessed by the UAE in general, and Dubai in particular, makes arbitration one of the basic necessities to cater to the needs of complex commercial transactions between major international companies and local enterprises, says Counsel Hussein Mohamad Al Jehazi, Chief Justice of the Sharjah Federal Court of Appeal and head of the Court's First Civil and Commercial Department.
The significant increase in maritime contractual relationships and disputes arising from multilateral construction and banking contracts, require an arbitration process.
'Disputes that may arise from such transactions require the facilitation and streamlining of regulations instead of complex, time-consuming court proceedings. By doing this, we can attract more foreign businessmen and investors, who would otherwise refrain from investing in Dubai,' Dubai International Arbitration Centre (DIAC) journal quoted him as saying.
Arbitration has become an important method of resolving commercial disputes and its significance has increased in the UAE. When investing in foreign trade there should be no international commercial contract that lacks an arbitration clause.
These clauses are often used to resolve disputes quickly outside the court system and avoid expensive and lengthy litigation proceedings, according to Al Jehazi. Arbitration has gained momentum as a result of a legislative boom that has manifested itself in the enactment of laws, statutes and regulations that govern commercial arbitration. Additionally, the accession to regional and international conventions on commercial arbitration has prompted enhancements to procedures.
The UAE established arbitration centres to provide reliable arbitration services both for local and international clients. Arbitration has become the major tool for businessmen worldwide when it comes to resolving commercial disputes.
One of the most prominent centres in the region dealing in arbitration is DIAC. As an international entity, it has been selected as a centre used as an alternative to court litigation in several prominent cases both globally and domestically.
DIAC, which boasts specialised arbitrators, with rich experience in the resolution of commercial disputes doubled its dispute solving capacity in 2004 and tripled it last year, according to Dr Hussam Al Talhuni, director of the DIAC.