Emirates City Forum

By

Karen Remo-Listana on Monday, June 15, 2009

The value of arbitration cases in Dubai has more than doubled to Dh65 billion this year over the past year, and about 80 per cent of them are real estate and construction-related, said a top official from the Dubai International Arbitration Centre (Diac).

"Under the arbitration mechanism, we have for this year alone 140 cases in addition to the 100 cases we had last year. As of March, active cases under examination is worth Dh65bn but I think the number has already increased and the amount of disputes can reach Dh70bn this year," Dr Hussam Talhuni, Director of Diac, told Emirates Business.

He expects the number of such cases to continue to increase "dramatically" due to the current adverse economic climate.

Disputes under the Diac is different from those lodged in Dubai Courts. Arbitration – a form of alternative dispute resolution (ADR) – involves resolution of disputes outside the courts, in which a third party reviews the case and imposes a decision that is legally binding for both sides.

"We are not related to Dubai Courts, we are helping the ministry on a federal level to adopt modern systems for the courts… The increase in the awareness of the importance of arbitration has led to the more than double increase in the number of cases, 75-79 per cent of which are related to property and construction," Talhuni said.

Unlike litigation cases, arbitration takes shorter period. "We usually finalise more than 60 per cent of the cases by the end of the year," he said.

Dubai is now looking at speeding up the procedure further to be able to cut down the resolution period in one to three weeks, Talhuni said, adding that the centre is hoping to finalise the ADR mechanism by the end of the year.

Talhuni said the current economic situation requires quick and fast action from all parties to accelerate the process of economic reforms and one of the mechanisms to resolve trade disputes is by providing quick solutions which will lead to the reduction of the number of court cases.

He said the ADR mechanism will create an atmosphere of trust in the business community and will provide the investors, both local and international, the confidence about the efficiency of the UAE courts in resolving commercial disputes quickly and at a lower cost.

"The current system involves litigation, which involved the courts and all the rigid procedures, according to the national law, where a judge will hear the parties and give them years and years of procedures. Whereas in alternative dispute resolution, since they are alternative they aim to provide quicker solutions, in a less expensive process and more peaceful climate for the parties," he said.

The centre is studying on whether to introduce this "new legal layer of mediation/reconciliation" in the courts. "Under the courts, they have this amicable settlement mechanism but if you compare that to the modern application of ADR, you cannot consider it as part of the modern applications."

Legal experts say more than 90 per cent of the cases are resolved even before they come to court anywhere in the world. Despite this, Talhuni said, ADR is still much more needed in today's times. "Mediation is the mechanism that will help parties settle the disputes… wherein maybe each party may give up some part of their rights and accordingly sign a settlement," he said.

http://www.business24-7.ae/Articles/2009/6/Pages/14062009/06152009_d4bb2...