Dispute Resolution in the UAE: Litigation and Alternative Dispute Resolution

Introduction:

In the UAE, disputes can be settled by two different methods. This method includes traditional court litigation and alternative dispute resolution (ADR) methods, such as arbitration and mediation. Each dispute resolution method has its benefits and challenges based on the dispute’s nature, the claim amount, and the desired outcome.

To resolve the legal disputes in the UAE, litigation remained the most popular choice. But recently alternative dispute resolution methods have become more popular due to the increased focus on flexibility and efficiency. Additionally, alternative dispute resolution methods can offer cost-effective and time-saving benefits under the right circumstances. Litigation is a traditional dispute resolution procedure based on the UAE court system. The plaintiff may initiate it by submitting a statement of claim that details both parties’ information, subject matter, and grounds for the legal dispute. The court then notifies the defendant and they may respond within a specified timeframe. Both parties present their evidence and arguments during hearings, after which the court issues a judgment. There are three levels of the court system in the UAE. These levels include the courts of first instance, courts of appeal, and courts of cassation. The well-structured court system in the UAE aims to ensure a fair and efficient resolution of disputes through this structured process. Many individuals and companies seek advice from experienced legal consultants in UAE to evaluate the most effective dispute resolution method based on the circumstances of their case.

Arbitration is a popular alternative dispute settlement procedure in the UAE. UAE arbitration law and regulations provide clear rules on how arbitration works. And parties may have the option to resolve disputes outside of the courts. Due to its quick resolution and confidentiality, arbitration is preferred by commercial disputes. Many multinational companies operating in the UAE commonly choose arbitration over traditional court proceedings. Under the framework of UAE arbitration law, parties enjoy a high level of procedural autonomy, which contributes to the growing preference for arbitration among global business entities.

The arbitration proceedings in the UAE are regulated by the federal law No. (6) of 2018 on Arbitration. Dubai International Arbitration Centre (DIAC), and the Abu Dhabi International Arbitration Centre (arbitrateAD) are the important arbitration institutions in the UAE. When parties decided to choose arbitration as dispute resolution, they must either include an arbitration clause in their contracts or agree to arbitration when a dispute occurs. The arbitration clauses should be included to avoid long court battles. Under this clause, parties may have to choose the number of arbitrators, the seat of arbitration, the language to be used in the arbitration and the governing law of the contract. Compared to court proceedings, the arbitration proceedings are confidential and which makes it perfect for businesses. Furthermore, the parties may have the option of appointing arbitrators with industry knowledge.

Another alternative dispute resolution method is mediation. This method focuses on amicable resolution through negotiation between disputing parties, as guided by a natural third-party mediator. Mediation can also decrease cost and time, as well as preserve business relationships, confidentiality, and flexibility in process and results. The Dubai International Financial Centre (DIFC) Dispute Resolution Authority and the Dubai Chamber of Commerce and Industry are the important mediation centres. If parties wish to include a mediation clause in contracts or enter into a mediation agreement after a dispute arises, they may be permitted to discuss and participate in mediation as dispute resolution. Choosing the most appropriate dispute resolution method depends on several factors, such as the nature of the dispute, parties involved, costs, time, and the desired outcome. Consulting the best lawyer in Dubai can provide strategic insight into whether to pursue mediation, arbitration, or court litigation depending on the legal and commercial priorities of the parties involved.

Conclusion:

Deciding between arbitration and litigation depends on the priorities and the nature of the case. If you are looking for a cost-effective, quick and confidential resolution, arbitration may be the better choice. If you are focusing on legal enforcement and the right to appeal, then litigation might be more advisable.