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17 Jan 2024
Insight
Global
2023 saw a number of developments in the legal landscape of the Middle East, with shifts in commercial law and the rise of arbitration among the key developments. Read our recap of these major themes and much more below.
New UAE Commercial Agencies Law
The new UAE Commercial Agencies law came into force in June 2023 and introduced several amendments, including allowing public joint-stock companies with a majority of shares owned by UAE nationals to register as commercial agents. It emphasises mutual benefit in commercial agency contracts, provides for more flexibility in termination rights, safeguards commercial agents' right to claim commission, and allows for disputes to be referred to arbitration.
UAE: Failure to pay advance on costs does not invalidate arbitration agreement
In October 2023, the General Assembly of the Dubai Court of Cassation issued Decision No. 10 of 2023, overruling a previous principle that deemed an arbitration agreement abandoned if an arbitration file was closed due to non-payment of advance costs. The Assembly's decision ensures that an arbitration agreement remains valid even in such circumstances.
ArbitrateAD to replace ADCCAC
The Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) is being replaced with the Abu Dhabi International Arbitration Centre (arbitrateAD) in early 2024. Existing ADCCAC arbitrations will continue, while new cases from February 2024 will be under arbitrateAD. The rules for arbitrateAD, led by His Excellency Abdulla Mohamed Al Mazuri, are yet to be published.
UAE: Growing reciprocity between the English and UAE Courts
In the case of Invest Bank PSC v Ahmad Mohammed El-Husseini and Ors, the English High Court ruled that there is no significant risk of obstacles to enforcing English Court judgments in the UAE. The court found no reason to believe that UAE Courts would not enforce an English costs order, whether through the offshore DIFC route or the onshore UAE route. The decision adds to a growing number of examples of reciprocity between the English and UAE Courts.
The undeniable rise of arbitration in Saudi Arabia
To facilitate the tremendous growth in the Kingdom, and in a bid to modernise the Kingdom's legal systems, Saudi Arabia issued the Civil Transactions Law, which came into force in December 2023, and has the effect of codifying the laws governing contracts and torts for the first time. The law includes provisions applicable to specific types of transactions, such as muqawala contracts for construction and related work. The law also introduces rules for the formation of contracts, additional obligations, contractual interpretation, termination, tort claims, damages, non-performance, and time bars.
In addition to these legal reforms, the Saudi Centre for Commercial Arbitration (SCCA) has published its revised SCCA Arbitration Rules. With the aim to become a major arbitration centre and the preferred choice in the region by 2030, the changes aim to strengthen the governance and efficiency of SCCA arbitration, including wider discretionary powers for the arbitral tribunal, the use of technology, and the establishment of the SCCA Court.
Key contacts
Stuart Paterson
Managing Partner, Middle East and Head of Middle East Dispute Resolution, Dubai
Legal Notice
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2024