It is essential that all required procedural steps are followed when commencing a claim to avoid delay and/or adverse consequences which may arise as a result of non-compliance. If a party fails to properly comply with the applicable requirements, it risks falling at the first hurdle and incurring unnecessary delay (and costs), which may ultimately jeopardize the successful prosecution of its claim. The relevant procedural requirements are often provided in the applicable laws or rules set by the government and/or the relevant authority.

Proceedings in the onshore United Arab Emirates (UAE) courts commence when the claimant files a statement of claim and pays the court fee. It is important when commencing a claim before the onshore courts to do so in the correct court, by reference to both the subject matter of the dispute and the Emirate in which the defendant is domiciled and/or the damage occurred. Articles 20 to 41 of the Civil Procedures Law (Federal Law No. 11 of 1992) set out the relevant considerations and requirements.

Statement of claim

There are no strict requirements as to the contents of the statement of claim. However, it must be in Arabic and include the following:

• details of the claimant;
• details of the defendant;
• the cause(s) of action relied upon;
• the relief(s) (ie remedy) sought; and
• documents relied on as supporting evidence. Gulf Cooperation Council countries, being civil law jurisdictions, rely heavily on documentary evidence, so it is important that all relevant documents are appended to the statement of claim and translated into Arabic by a court-certified translator.

Once the statement of claim is filed with the court office, the summons is issued and the matter is listed for a hearing.

Summons

A court officer serves the summons, the statement of claim and the documents attached to it on the defendant personally, and the defendant is asked to sign an acknowledgement. If the court officer is unable to serve the summons on the defendant before the hearing date, the court adjourns the hearing to another date. 

If the defendant cannot be served for whatever reason, service may be effected through notification, which usually involves the court officer seeking to effect notice at the defendant's last known address. If this fails, the court will serve on the defendant by publication. A notice is published in two widely circulated newspapers, one in English and the other in Arabic. Notice is deemed to be served upon the defendant after this publication, and the case may proceed.

Court Fees

• Abu Dhabi: Abu Dhabi Law No. 6 of 2013 (Civil Transactions and Procedures), together with the decision of the Chairman of the Judicial Department No. 2 dated 2 February 2016, provide the court fees applicable in the Abu Dhabi onshore courts. The filing fee for a claim is generally 3 percent of the value of the claim.
• Dubai: Dubai Law No. 21 of 2015 on Judicial fees applicable in the Dubai Courts provides the court fees applicable in Dubai onshore courts. The filing fee for a claim is generally 6 percent of the value of the claim, subject to a minimum of AED500 and a maximum of AED40,000.

Payment Orders in the UAE 

Recent amendments to the UAE Civil Procedure Law allow for a fast route for the enforcement of admitted debts. 

Pursuant to articles 62 and 63 of Cabinet Decision No. 57 of 2018 (amended by Cabinet Decision No. 33 of 2020), a party can file an ex-parte application before the UAE courts, and request the issuance of a payment order for an outstanding debt. 

Under these provisions, a payment order is a process by virtue of which a party that has strong written evidence of a quantified debt, which has been acknowledged and accepted by the debtor, may request the court to issue an order against the debtor for the payment of that debt. 

In order to obtain a payment order, the creditor is required to provide the court with sufficient evidence that the debt is correct, confirmed in writing, and is due and payable. Procedures relating to payment orders are much shorter than cases pursued under the usual civil procedures. 

Article 62 of Cabinet Decision No. 57 of 2018 and its amendment states the following conditions for obtaining a payment order: 

• a written acknowledgment of the debt by the debtor;
• the amount of the debt must be specified; and
• the debt must have arisen from a commercial contract or instrument. 

A creditor seeking a payment order should first serve a demand notice on the debtor demanding the settlement of the outstanding amount. In the event the debtor fails to settle the outstanding amount within at least five days, the creditor may then file a petition for a payment order requesting the payment of the outstanding amount. 

Examples of situations where payment orders may be an available remedy are (a) where the debtor has provided cheques for the amount(s) claimed which have been dishonoured and (b) where in correspondence, the debtor admits the debt but, for example, requests more time for payment.

The procedure for commencing a claim in the Dubai International Financial Centre (DIFC) Courts is governed by the Rules of the DIFC Courts passed by the DIFC Authority (RDC) and in the Abu Dhabi Global Market (ADGM) Courts under Part 5 of the ADGM Court Procedure Rules 2016 (the ACPR) and Practice Direction No. 2 issued on 30 May 2016. To commence a claim, the claimant has to file a claim form.

DIFC Courts

In the DIFC Courts, there are three types of claim forms:

• (a) The Small Claims Tribunal (SCT) Claim Form (Form P53/01) is used for claims:
  • where the value of the claim does not exceed AED500,000;
  • where the claim relates to the employment/former employment of a party and all parties agree for the matter to be heard by the SCT (there is no value limit for the SCT's elective jurisdiction in the context of employment claims); and
  • that do not fall in the first two categories but for which the value of the claim does not exceed AED1 million and the parties elect in writing for it to be heard by the SCT (RDC 53.2).

The parties have to request the SCT Registrar for a claim form. In the claim form, the claimant must set out reasons for the remedy sought. The court fee applicable is governed by the Amended Practice Direction 4/2015. The filing fee for employment disputes is 2 percent of the value of the claim with a minimum of USD 100, and for other disputes, 5 percent of the value of the claim with a minimum of USD 100.

• (b) The Part 7 Claim Form (Form P7/01) is used for claims that do not fall under the jurisdiction of the SCT and do not require the use of a Part 8 Claim Form. This is the most commonly used claim form.
• (c) The Part 8 Claim Form (Form P8/01) is used where the claimant seeks a decision on a question that is unlikely to involve a substantial dispute of fact or where there is a rule or practice direction which permits or requires the use of a Part 8 Claim Form. The claim form should state that Part 8 applies and identify the question that the claimant wants the court to decide or the remedy that the claimant is seeking and the legal basis for the remedy.
• (d) The Part 43 Arbitration Claim Form (Form P43/01) is used for any arbitration-related matters or when seeking relief in support of pending arbitration proceedings in the DIFC.

For Part 7 and 8 claims, the claim form and every statement of case must include the title of the proceedings, which states the number of the proceedings, the circuit or division of the court or tribunal (if any) in which they are issued, the full name of each party and whether they are a claimant or defendant. For arbitration claims, the claim form must include a concise statement of the remedy claimed and any question on which the tribunal seeks a decision from the court.

The filing fees for Part 7 and Part 8 claims are 5 percent of the value of the claim and/or property with a minimum of USD 1,500 and a maximum of USD 130,000. Where the claim is for both money and other relief, only the higher applicable fee is payable. The fee for a non-monetary Part 8 claim is USD 5,000.

ADGM Courts

The claim form must be in accordance with Form CFI 1 unless it is a small claim (ie (i) a claim for USD 100,000 or less; or (ii) an employment dispute where both parties agree it is a small claim) in which case Form CFI 2 must be used. If the claimant wishes to use a simplified (alternative) procedure under Rule 30 (in cases which do not involve substantial disputes of fact), then form CFI 3 is used.

The court fee depends on the value of the claim. It is USD 2,500 for claims including unquantified damages claims, arbitration claims and judicial review proceedings. For a claim between USD100,000 and USD 500,000, it is 2.5 percent of the value of the claim. For a claim between USD 500,000 and USD1 million, it is USD 12,500 plus 2 percent over USD 500,000. For a claim between USD1 million and USD 5 million, it is USD 22,500 plus 0.5 percent over USD1 million and finally, for claims over USD 10 million, the fee is USD 55,000 plus 0.15 percent over USD 10 million (subject to a cap of USD 65,000). For a small claim dispute, the court fee is 1.5 percent of the claim, subject to a minimum of USD 250 and a maximum of USD1,500.

Claim commencement date

In DIFC and ADGM Courts, proceedings start when the claim form is issued by the court at the request of the claimant. This is the date on the claim form.

Statements of truth

In DIFC and ADGM Courts, the claim form must be verified by a statement of truth, which confirms that the claimant believes that the facts stated in the claim form are true.

Particulars of claim

In DIFC and ADGM Courts, the particulars of claim must state:

• what final orders are sought;
• particulars of the claimant's case in summary form, and the propositions of law which the claimant relies on. If the particulars of claim are not contained in the claim form or served with it, then they must be served within 28 days of the defendant's acknowledgement of the claim form; and
• details of the claimant's lawyers (if so represented).

E-filing

In the DIFC and ADGM Courts, an electronic filing facility is available on the respective court websites. The e-filing system must be used for submitting documents to the court registry (including the submission of the claim form for issue by the court).

The procedure for commencing a claim in arbitration proceedings depends on both the law applicable to the arbitration and any applicable institutional (or other) rules. The key arbitral institutions in the UAE are the DIFC - LCIA Arbitration Centre (DIFC-LCIA) and the Dubai International Arbitration Centre (DIAC).

Commencing a claim with the DIFC-LCIA or DIAC involves sending a request for arbitration to:

• the DIFC-LCIA Registrar and the respondent(s) to the arbitration (under the DIFC-LCIA Arbitration Rules of 2008 or 2016 (as applicable)). The request must comply with Article 1 of the rules; and
• the DIAC (under the DIAC Arbitration Rules of 2007). The request must comply with articles 3 and 4 of the rules.

The date of receipt of the request for arbitration by the DIFC-LCIA Registrar or the DIAC is the date of commencement of arbitration proceedings.

For ad hoc onshore arbitrations in the UAE, the UAE Arbitration Law (Federal Law No. 6 of 2018) is the key legislation on arbitration. However, it is generally accepted practice among parties to adopt institutional rules as they are more comprehensive and sophisticated. If the arbitration agreement is silent on procedural rules and the parties cannot agree on the procedural rules to apply, the arbitrator(s) must decide on the applicable rules.

Jurisdiction

Jurisdiction is the authority granted to a formally constituted legal body or forum (ie court or arbitral tribunal) to administer and decide legal matters. Jurisdiction clauses in contracts usually specify the court or tribunal which will have (exclusive or non-exclusive) jurisdiction to determine the disputes that may arise out of, or in connection with, the contract.

Jurisdictional challenges can play a significant role in the progress made by parties in resolving their disputes. They can be costly and time-consuming to resolve, which can lead to delays in dealing with the substantive dispute, and increase the acrimony in an already contentious setting. It is therefore vital that parties give proper thought at the point of entering into an agreement as to the forum in which they wish disputes to be heard. Any contractual provisions should accurately reflect their wishes, ensuring that any jurisdictional challenges which may be brought are quickly and easily dismissed - allowing the parties to focus their efforts on resolving the substantive claims.

Challenging jurisdiction

Jurisdictional challenges can be raised by any of the parties. Challenges are sometimes used in an attempt to delay and/or to frustrate the proceedings. If the basis for challenge is inconsistent with a party's previous position, the court or tribunal should decide whether the party making the challenge is deemed to have waived its right to challenge (because there is no good reason for its delay in bringing the challenge). Where a court or arbitral tribunal itself identifies a jurisdictional issue which the parties have not raised, in some situations it may be appropriate for the court or tribunal to do so on its own initiative. 

Grounds for jurisdictional challenges

Generally, parties may challenge the jurisdiction of a particular court or tribunal on the ground that the jurisdiction clause in their contract was invalid. The technical basis for claiming such invalidity will depend upon the provisions of the relevant laws.

Introduction

In the United Emirates (UAE), Article 20 of the UAE Federal Law No. 11 of 1992 ("the Civil Procedure Law") states that "With the exception of actions in rem relating to real property abroad, the courts shall have jurisdiction to hear actions brought against nationals and claims brought against foreigners having a domicile or place of residence in the State." Claims will usually be brought in the courts of the Emirate in which the relevant defendant resides. Article 21 then sets out the circumstances in which the UAE onshore courts have jurisdiction to hear actions against foreigners who do not have a domicile or residency in the state.

The UAE onshore courts will not generally uphold an agreement which gives jurisdiction to a foreign court in circumstances where they would otherwise have jurisdiction. This would include, for example, disputes involving the ownership of property situated within the UAE, a contract that was executed and/or largely performed in the UAE, and/or a dispute in which a UAE national or resident  is a defendant.  In circumstances where there is a dispute between the parties as to the competent UAE court, the Union Supreme Court rules on any conflict – often staying ongoing proceedings pending its decision.

Jurisdiction within the UAE (and challenging a particular Emirate's jurisdiction)

The starting point is that (unless the contract contains an exclusive jurisdiction clause in favor of a particular Emirate's court) the place of residence of a defendant will dictate which Emirate's court has jurisdiction over a dispute in the UAE. There are certain circumstances which may cause this general rule to be varied. For example, in real estate disputes, the court of the Emirate where the property is situated can take jurisdiction. A litigant filing a claim in a particular court may be met by a counterparty challenging the jurisdiction of that court, arguing that the court of a different Emirate should have jurisdiction over the dispute (for example, where a contract has been executed in another Emirate).

Challenges seeking to assert the jurisdiction of the DIFC Courts

Generally, choosing the "Dubai Courts" in a dispute resolution clause will mean that the Dubai onshore courts are intended to take jurisdiction over any dispute under the relevant agreement. However, this wording will not preclude an argument being raised that it was intended that the Dubai International Financial Centre (DIFC) courts could have jurisdiction. Therefore, particularly in circumstances where one or more of the parties are based in the DIFC; hold assets in the DIFC; or where the contract is executed or performed (in whole or part) in the DIFC, the parties should ensure (assuming that this is what they wish) that they make clear that it is the Dubai onshore courts, and not the DIFC courts, which have jurisdiction over their dispute.   In 2016, a Joint Judicial Committee was established by the Government of Dubai to resolve conflicts of jurisdiction between the Dubai onshore courts and the DIFC courts.

Challenges seeking to assert the validity of an arbitration agreement

As mentioned above, the UAE onshore courts are often reluctant to cede jurisdiction over a dispute which has a connection with the UAE to a foreign court. Historically, the UAE onshore courts have dealt with many cases by exercising jurisdiction, notwithstanding attempts by the parties to "contract out" of the national courts by agreeing to submit exclusively to the courts of another jurisdiction. The UAE onshore courts have ignored such agreements as a matter of public policy, and relied on the jurisdiction conferred by Articles 20 and 21 of the Civil Procedure Law. As a result, parties should be aware that the only effective method permitted by UAE law to "contract out" of the jurisdiction of the UAE onshore courts is for the parties to execute a valid arbitration agreement. They will, however, need to ensure that they fully comply with all technical requirements under the relevant law in drafting such an agreement, to avoid the jurisdictional challenges set out below.

In 2011, the jurisdiction of the DIFC courts was significantly expanded through the promulgation of Dubai Law No. 16 of 2011, which permitted contracting parties to refer their civil and commercial disputes to the DIFC courts irrespective of whether their contract had any nexus to the DIFC (as long as that agreement was clear and in writing).

Under Rule 12.1 of the Rules of the DIFC Courts (RDC), a defendant who wishes to dispute the court's jurisdiction "may apply to the Court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have." A defendant wishing to exercise this right must file an acknowledgement of service in accordance with Part 11 (which will not waive their right to dispute the Court's jurisdiction (see RDC 12.2-3)). Unless jurisdiction is disputed within 14 days of filing the acknowledgement, the defendant will be treated as having accepted the court's jurisdiction (see RDC 12.5). By way of example as to the possible grounds on which jurisdiction may be challenged, a party may seek to rely on an arbitration agreement, or may claim that another court has jurisdiction over the dispute.

The Abu Dhabi Global Market (ADGM) is an international financial free zone in Abu Dhabi.  The ADGM Courts were established in 2015, and became fully operational in 2016, offering an independent common law framework which is broadly modelled on the English judicial system. Rule 38.1 of the ADGM Court Procedure Rules largely mirrors that of Rule 12.1 of the RDC mentioned above.  Under Rule 38(1) of the ADGM Court Procedure Rules, a defendant wishing to dispute the court's jurisdiction "may apply to the Court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have." A defendant wishing to do so must first file and serve an acknowledgement of service.  Any application disputing jurisdiction must be made within 28 days after filing and serving the acknowledgement of service, and be supported by written evidence (Rule 38 (4)).

Introduction

An arbitral tribunal's jurisdiction to determine the merits of a dispute arises out of a valid and enforceable arbitration agreement, which must be broad enough in scope to encompass the claims made by the parties. Once arbitrators have been appointed to determine a given dispute, their jurisdiction usually subsists until they render a final arbitral award. However, should one or more of the parties challenge the arbitral tribunal's jurisdiction during the course of the proceedings, their authority may become an issue.

The fact that a party has challenged the arbitral tribunal's jurisdiction does not prevent it from determining whether it has jurisdiction. Kompetenz-Kompetenz is a universally accepted principle in modern international arbitration (which is recognized under Article 19 of the Federal Law No. 6 of 2018 on Arbitration (the "Arbitration Law")). This principle recognizes that arbitrators have the inherent power to determine the nature and scope of their own jurisdiction.

Challenges to an arbitral tribunal's jurisdiction can sometimes be used for purely tactical reasons – to delay proceedings and/or cause the opposing party to incur greater costs through defending the application. Although such challenges are usually made at the beginning of the arbitral process, they can arise at any time throughout the arbitration, and even after an arbitral award has been rendered. The majority of national laws and arbitration rules, however, provide that a party seeking to challenge the arbitrators' jurisdiction should raise their objection at the outset or as soon as they are aware of the grounds for challenge.

Types of jurisdictional challenges

A jurisdictional challenge can be made:

• in respect of a party - eg a party is not a party to the relevant contract or clause;
• in respect of the arbitration agreement itself - eg the clause is void or invalid; or
• in respect of a claim - eg the claim does not fall within the scope of the dispute resolution clause/is not arbitrable.

Dealing with jurisdictional challenges

Tribunals have broad discretion as to the timing and process by which they deal with a jurisdictional challenge. If they decide to reject the challenge, and confirm that they do have jurisdiction, they can either issue their decision as an award or a procedural order. Tribunals can either determine such challenges as a preliminary matter or deal with it as part of their final award on the merits. If they consider that they do not have jurisdiction, the tribunal should issue a final arbitral award or (depending on the circumstances) a decision declining to decide the case for lack of jurisdiction.

Offshore arbitration

The UAE currently has one offshore arbitral institution in Dubai, the DIFC-LCIA Arbitration Centre (DIFC-LCIA), which is a joint venture between the DIFC and the London Court of International Arbitration. Under Article 23.1 of the DIFC-LCIA Rules, the arbitral tribunal "shall have the power to rule on its own jurisdiction, including any objection to the initial or continuing existence, validity or effectiveness of the Arbitration Agreement". The article makes clear that, for this purpose, an arbitration clause is to be treated as an independent agreement to the agreement it is contained within.

Article 23.2 of the DIFC-LCIA Rules provides that any challenge to the arbitrators' jurisdiction should be raised as soon as possible, but not later than the service of the Statement of Defence (if the respondent is submitting the challenge) or service of the Defence to Counterclaim (if the claimant is submitting the challenge). Otherwise, a party is deemed to waive their right to challenge jurisdiction. However, the arbitral tribunal may admit an untimely plea if it considers the delay to be justified in the particular circumstances.

Article 23.3 of the DIFC-LCIA Rules provides that the arbitral tribunal may rule on any jurisdictional challenge in an award on jurisdiction or later in an award on the merits, as it considers appropriate.

Further, Chapter 4 of the DIFC Arbitration Law (2008) contains provisions as to the jurisdiction of the arbitral tribunal. These provisions support the DIFC-LCIA Rules above, and confirm (in Article 23 of the law) that: (i) the arbitral tribunal may rule on its own jurisdiction, including any objections relating to the arbitration agreement itself (which for this purpose is deemed to be independent of the other terms of the contract it is contained within); (ii) any plea must be raised before the submission of the Defence (with the fact that a party has participated in appointing an arbitrator not precluding them from raising any plea); (iii) a plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings (a later plea may be considered if the delay is justified); and (iv) the arbitral tribunal may rule on a plea either as a preliminary question or in an award on the merits.

RDC 43.47 provides that "an arbitration claim for the determination of a preliminary question as to the substantive jurisdiction of the Arbitral Tribunal under Article 23(3) of the Arbitration Law must be made within 30 days after receipt of notice of the ruling by the Arbitral Tribunal as a preliminary question that it has jurisdiction."

The other offshore arbitration centre based in the UAE is in Abu Dhabi, in the ADGM. This is a hearing centre rather than an arbitral institution. The ADGM has agreed with the International Court of Arbitration of the International Chamber of Commerce (ICC Court) to launch a Middle East representative office in the ADGM, but any arbitrations conducted in the ADGM using the ICC Rules will be administered from the ICC's Paris base. This is in contrast with the joint venture set up in the DIFC between the DIFC and LCIA.

Parties can agree to apply the rules of any arbitral institution to arbitrations conducted in the ADGM. In considering jurisdiction challenges, parties should look to the rules governing their proceedings, as well as the ADGM Arbitration Regulations 2015. Under those regulations, the tribunal has the power to rule on their own jurisdiction (see Article 24 (1)). Under Article 25, an objection that the tribunal lacks jurisdiction "must be raised by a party not later than the time he takes the first step in the proceedings to contest the merits of any matter in relation to which he challenges the tribunal’s jurisdiction". Any objection during the course of the proceedings that the tribunal is exceeding its substantive jurisdiction must be made as soon as possible after the matter alleged to be beyond its jurisdiction is raised.

In either case, the tribunal may rule on an objection as a preliminary question or in an award on the merits (Aritlcle 25 (3)).

Onshore arbitration

There are various "technical" grounds on which an arbitration clause can be declared invalid under UAE law, thereby denying the arbitral tribunal jurisdiction over a particular dispute. While such arguments may be raised in arbitrations seated in the DIFC, they are more likely to find traction in an arbitration seated in onshore Dubai (whether under the rules of the Dubai International Arbitration Centre (DIAC), another arbitral institution or in an ad hoc arbitration). Jurisdictional challenges typically address whether:

• the arbitration agreement exists (ie whether the relevant contract entered into by the parties contained an agreement to arbitrate);
• the arbitration agreement is pathological (ie whether an arbitration agreement is incomplete, ambiguous, incoherent or contradictory – for example, where a clause erroneously described a non-existent arbitral institution or named a deceased arbitrator); and
• the arbitration agreement was made in the required form (ie whether the arbitration agreement satisfies the requirements which arise from the law governing the arbitration agreement or the law applicable to the relevant party). For example, in onshore Dubai, among other things, the arbitration agreement must be in writing (Article 7(1) of the UAE Arbitration Law) and signed by a person capable of binding the party in question to arbitration.

Other points to note include:

• Article 8 of the UAE Arbitration Law provides that, if a dispute (regarding which there is a valid arbitration agreement) is brought before the UAE courts, as long as one party to the dispute pleads the existence of an arbitration agreement in relation to that dispute prior to filing any demand or defence before the court, that court must reject the court case.
• Article 43 of the UAE Arbitration Law provides that if, during the course of an arbitration, a preliminary issue which is outside the jurisdiction of the arbitrators arises; a challenge has been filed that a document is forged; or criminal proceedings have been taken regarding such forgery (or for any other criminal incident), the arbitrator may continue with the arbitration if it finds that disposing of the matter or forgery or criminal act is not necessary for settling the subject matter of the dispute (otherwise the arbitrator shall suspend the proceedings until a final judgment on the issue has been issued).

The DIAC is the principal arbitral institution in onshore Dubai. In terms of the DIAC's rules relating to jurisdictional challenges, Article 6.3 provides that a party's jurisdictional challenge "…shall be raised not later than in the statement of defence or, with respect to the counterclaim, in any reply to the counterclaim." Article 6.4 states that "In general, the Tribunal should rule on a plea concerning its jurisdiction as a preliminary question. However, the Tribunal may proceed with the arbitration and rule on such a plea in the arbitral award."

This volume focuses on how settlement of a dispute can be achieved through Alternative Dispute Resolution (ADR) mechanisms in both the onshore and offshore jurisdictions of the United Arab Emirates (UAE).  ADR is a collective term for the various means by which a dispute between parties may be amicably resolved without recourse to the determination of a court or, in the case of arbitration, an arbitral tribunal.

The use of formal ADR is a relatively new concept in the Gulf Cooperation Council (GCC) region. Nonetheless, there appears to be a growing willingness to engage in ADR, as well as an increase in the number of dispute resolution centres which offer ADR services, such as mediation.

A settlement is an agreement between parties to resolve a dispute in accordance with the terms agreed between them. There are a number of reasons why a party should consider settling a dispute.  These include, (without limitation) the following:

• settlement allows parties to avoid the uncertainty of waiting for a judgment from a court (or arbitral award from a tribunal). In addition, an agreed outcome represents a solution acceptable to both parties, as opposed to an outcome from a court or arbitral tribunal (which will often be unfavorable to at least one party);
• reaching a settlement saves costs (including legal, expert, disbursements) and management time;
• in some instances, a settlement allows the parties to continue their commercial relationship; and
• the parties are likely to avoid any negative publicity or reputational damage by ensuring that their settlement agreement includes a confidentiality clause (whereas a court judgment may be publicly available).

A number of legal jurisdictions allow the concept of "without prejudice" communication. "Without prejudice" communication allows parties involved in settlement discussions to make concessions or settlement offers in the interest of resolving their dispute, without prejudicing their position before the court. The concept of "without prejudice" communications is recognized before the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) courts. However, the concept of "without prejudice" communications is not recognized by the onshore courts of the Middle East. Consequently, communications and documents used for the purpose of the settlement process can be submitted before the onshore courts and relied on during court proceedings, if a settlement is not reached.

ADR in the onshore courts

The UAE Civil Code, unlike the civil procedure rules in England and Wales, does not contain provisions relating to pre-action conduct, by which settlement is encouraged before commencing court proceedings.

The main institutions which offer ADR services in onshore UAE are the following:

• The Centre for Amicable Settlement of Disputes;
• The Reconciliation and Settlement Committee; and
• The Mediation Centre.

Centre for Amicable Settlement of Disputes

In Dubai, Law No. 16 of 2009 establishes a Centre for Amicable Settlement of Disputes ("Centre") which can hear the following:

• disputes which concern the partition of common property;
• disputes relating to debts (up to a maximum value of AED50,000);
• disputes where one of the parties is a bank; and
• disputes where the parties have agreed to refer the matter to the Centre in ongoing litigation, regardless of the value of the dispute.

Disputes which fall within the first three categories must be reviewed by the Centre before they may be filed at the relevant onshore Dubai courts. Disputes which are referred to the Centre are handled by a number of mediators (who review the facts) under the supervision of the concerned judge. While the Centre is handling the case, all limitation and prescription periods are put on hold.

There are numerous cost and time advantages to settling a dispute through the Centre. Disputes referred to the Centre are typically settled within one month from the date on which the parties appear before the Centre. This is significantly faster than the three tier process before the onshore Dubai courts, which takes 18 to 24 months (or longer on occasion). If a settlement is reached then a signed settlement agreement must be attested by a Dubai court judge. This can then be enforced immediately.

The Reconciliation and Settlement Committee

In the UAE, commercial disputes in the Federal Courts (this procedure does not apply for Dubai and Ras Al Khaimah) must be referred to a Reconciliation and Settlement Committee (Committee).  The Committee facilitates settlement by way of a preliminary hearing whose purpose is to attempt to settle the dispute amicably.  During the settlement hearing, documents can be filed, but as the purpose of the hearing is to settle the case, the filing of documents is unusual. The hearing before the Committee is not private and takes place in a room to which the public has access. Any documents or admissions made in the hearings before the Committee are not privileged and any agreement reached before the Committee is binding and enforceable (and often recorded in the minutes of the hearing, which are signed by the parties). If a settlement is not reached after the hearing, then the claimant can file a claim in the Court of First Instance.

The Mediation Centre

The Mediation Centre opened in Dubai in May 2016. The Mediation Centre offers traditional Middle Eastern conciliation practices as well as modern mediation, as well as facilitating accredited mediation courses. The advisory board of the Mediation Centre consists of leading international and local lawyers, and representatives of prominent businesses.

DIFC Courts

Proceedings before the DIFC courts are conducted in accordance with the Rules of the DIFC courts (RDC). The RDC operate to promote an "overriding objective" which requires the DIFC courts to deal with cases justly, with a view to saving costs and dealing with cases in a proportionate manner and the litigating parties to assist the courts to achieve the overriding objective.

In contrast to the English High Court, there are no formal pre-action protocol procedures before the DIFC courts. However, the DIFC courts are required to further the overriding objective, which includes encouraging parties to use ADR procedures to settle their dispute before the commencement of litigation.

One way in which the DIFC courts encourage parties to settle their disputes is through Part 32 of the RDC. A Part 32 offer is an option under the RDC which permits parties to attempt to settle substantive claims (excluding costs) which has potential advantages and are explained below.

Parties may make a Part 32 offer at any stage before the commencement of proceedings and up to 21 days prior to the trial date. A Part 32 offer is made when it is served on the offeree and is accepted by serving the written notice of acceptance on the offeror and filing the notice with the court.

Form of Part 32 offer

An offer to settle which is made in accordance with Part 32 of the RDC must include the following form and content. It must:

• be in writing;
• state on its face that it is intended to have the consequences of Part 32;
• specify a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with RDC 32.28 to 32.33 if the offer is accepted;
• state whether it relates to the whole of the claim or to part of it, or to an issue that arises in it and, if so, to which part or issue; and
• state whether it takes into account any counterclaim.

Terms of the Settlement

The terms of a Part 32 offer must comply with the criteria listed above. All other terms of the offer depend on the facts of the case. A Part 32 offer should be carefully drafted to deal with every detail of the proposed offer. Key issues which should be considered during negotiations and the drafting stage of any settlement agreement are the following:

• the scope of the claims to be settled;
• confidentiality clause stating that the terms of the settlement should be kept confidential between the parties;
• payment arrangements;
• legal costs; and
• disposal of court proceedings.

Cost consequences of acceptance/rejection of a Part 32 offer

A Part 32 offer is an offer to pay a certain sum of money in settlement of the claim, which may be accepted by the claimant within 14 days from the date of the offer.  If the Part 32 offer is not accepted and the claimant fails to obtain a judgment "more advantageous" than the Part 32 offer, the claimant will be liable for the legal costs (plus interest) of the proceedings from the date the offer was rejected.

A Part 32 offer is treated as "without prejudice except as to costs".  This means that, if the offer is not accepted, it cannot be used or referred to during legal proceedings in relation to the claim, save as to the issue of costs.

Advantages of a Part 32 offer

The main advantages of a Part 32 offer are as follows:

• a Part 32 offer is a formal offer registered with the DIFC courts and must strictly follow the procedures laid down in the RDC;
• a Part 32 offer can be used to save costs and time in avoiding a full trial;
• the offeror of a Part 32 offer can exert pressure on the offeree to consider settling the dispute, as a rejection of a Part 32 offer may have serious cost implications for the offeree;
• a Part 32 offer does not prejudice a party's right to pursue litigation;
• a Part 32 offer can be made in whole or in part of the claimed amount and, if accepted, will result in a strike-out of the whole or part of the claim in accordance with the terms of the offer; and
• there is no limit to the number of Part 32 offers which can be made by either party before the commencement of the trial.

Part 18 offer - ADGM Courts

Like the DIFC, the ADGM is a financial free zone which is not subject to onshore UAE civil and commercial law. The ADGM has its own court system and the ADGM Court Procedure Rules 2016 make provision, in Part 18, for settlement offers. A Part 18 offer is similar to the Part 32 offer in the RDC. A Part 18 offer is treated as "without prejudice save as to costs" and "may be made by a claimant or a defendant in respect of the whole, or part of, or any issue that arises in a claim, counterclaim or other additional claim or an appeal or cross-appeal from a decision made at a trial."  A Part 18 offer must be made in accordance with the prescribed form stated in the ADGM Court Procedure Rules 2016.

Further, each of the DIFC and ADGM Courts will, at the stage of the proceeding at which a Case Management Conference is convened (see Volume 8 "Case Management"), ask the parties if they would like to stay the proceedings for a short period of time in which they can attempt to settle the dispute.

DIFC-LCIA

The DIFC-LCIA facilitates mediation under the DIFC-LCIA Mediation Rules (dated 1 August 2012).  DIFC-LCIA mediation can be used where the parties have agreed to mediate existing or future disputes under the rules, or upon request by the parties. Once DIFC-LCIA mediation is agreed, the court appoints a mediator, having due regard for any nomination or criteria of selection agreed in writing by the parties. The commencement of mediation does not preclude the parties from initiating or continuing any arbitration or judicial proceedings in respect of the dispute which is subject to mediation.

International Chamber of Commerce (ICC)

The ICC has its own mediation rules (dated 1 January 2014) which contain comprehensive provisions for the appointment of a mediator and the mediation process. In an arbitration under the ICC Rules, the arbitral tribunal has various case management powers which it may use to assist with the settlement of a dispute. Appendix IV of the ICC Rules states that the arbitral tribunal may at any point in the proceedings inform or remind the parties that they are free to settle all or part of the dispute either by negotiation or through any form of amicable dispute resolution methods such as, for example, mediation under the ICC Mediation Rules. Where agreed between the parties and the arbitral tribunal, the arbitral tribunal may take steps to facilitate settlement of the dispute, provided that every effort is made to ensure that any subsequent award is enforceable by law.

If a settlement is agreed before the arbitration has fully commenced, the settlement agreement will be documented. However, if a settlement is agreed after the file has been transmitted to the arbitral tribunal, the parties may request that the arbitral tribunal records the settlement agreement in the form of a consent award.

Dubai International Arbitration Centre (DIAC)

DIAC does not provide mediation services. The DIAC Arbitration Rules state that the arbitral tribunal shall terminate the arbitration once a settlement has been agreed. If requested jointly by the parties, the arbitral tribunal shall record the settlement in the form of a written consent award, which will contain a statement clarifying that it is an award made by the parties' consent. Each party to the arbitration, including the tribunal, shall receive an original copy of the consent award.

This volume aims to set out some of the final steps that should be undertaken in preparation for trial. After months, or years, of dedicating time and resources to the dispute resolution process, the final stages of preparing for trial can often be a stressful time because the end is in sight, yet a number of uncertainties remain. Careful management of practical considerations will ensure that you are as well prepared for trial as possible and can focus on the substance of the hearing and other important matters, such as strategy.

The final preparatory steps that must be taken into consideration when preparing for an onshore litigation hearing differ substantially from those that are necessary when preparing for an offshore litigation hearing or arbitration hearing.

Venue

Civil proceedings in the onshore United Arab Emirates (UAE) Courts are conducted in Arabic and are predominantly based on written pleadings, rather than oral testimony, so the format of the hearing is very different to an offshore litigation or arbitration hearing. In onshore litigation, the court will set a deadline for filing memoranda, and will adjourn proceedings for intervals of up to (approximately) four weeks in between these dates, with little involvement from the parties beyond their compliance with the filing deadlines. There is therefore no need to carry out the sort of logistical arrangements involving attendees and venue bookings that are often necessary for offshore litigation and arbitration hearings. Whilst it is possible for representatives from either side to attend the hearings, as these occasions involve little more than submitting written memoranda and obtaining the date for the next hearing, common practice is for local counsel to attend the hearings and report back with any updates on decisions rendered by the court.

Witnesses

As a, civil proceedings in the onshore UAE courts are largely conducted ''on the documents''; whilst parties may seek the court's permission to provide oral evidence, this is not commonplace. The cross-examination of witnesses in civil proceedings is similarly rare and, when permitted, is strictly controlled by the judge. When a witness is asked to attend court and provide oral evidence, they will need to take an oath (the substance of which will be particular to their religion). If evidence is to be provided in a language other than Arabic, a court-appointed translator (who is usually an employee of the court) or a member of staff from the witness's embassy will be required to translate the evidence. Given the rarity of factual witnesses being required to provide oral evidence, there is often no need for witnesses to undergo the sort of familiarization training that is discussed in relation to offshore litigation and arbitration. In terms of expert evidence, the court will often appoint an expert to assist with technical matters, will base its judgment on the expert's report, and will not require the attendance of the expert.

Final hearing documents

The claimant must have all supporting documents prepared and translated to submit in Arabic. Local counsel should have their Power of Attorney in place before the first hearing. The documents submitted by the claimant will then be received by the respondent's local counsel, in order for a response to the submission to be drafted and prepared for the next hearing.

No trial

In practice, there is no trial in onshore litigation. The court simply receives the final written submission or evidence from a party and notifies the parties that the matter is now closed so that the court can enter judgment.

In contrast to onshore litigation, the final hearing in offshore litigation and arbitration is usually the centrally important point of the case and can last weeks. It therefore requires very careful preparation. There are a number of considerations that are applicable to both offshore litigation and to arbitration hearings, which are detailed below. Those preparatory considerations which are specific to one or the other forum are set out under separate headings below.

Personnel logistics

If those attending the hearing (legal team, factual witnesses, expert witnesses, translators) do not live in the same location as where the hearing is taking place, it may be necessary to arrange travel and accommodation for these personnel. It may also be necessary to consider whether anyone (counsel, lawyers, experts, etc.) requires documents to be shipped for the hearing, so that shipping can be arranged in advance. For those individuals that require accommodation, it is a good idea to ensure they are based close to the venue where the hearing is taking place, and (if possible) within the same venue, as this avoids undue travel-related stress on the mornings of the hearing and aids pre-hearing and post-hearing briefing sessions. It is wise to ensure that a list is circulated containing the contact details (mobile numbers and email addresses) of all attendees and anyone that may need to be contacted at short notice.

Witnesses

In offshore litigation and arbitration, witnesses will be called to be cross-examined based on the content of their witness statement(s) and will be required to provide responses by way of oral testimony. Appearing at a hearing and giving oral testimony may be a daunting prospect for some individuals, and there are steps that can be taken to mitigate that anxiety, such as witness familiarization training. It is possible to instruct independent, specialist companies to provide this service (under English law, lawyers involved in a case are prohibited from ''coaching'' witnesses in preparation for the hearing). Training can be tailored based on the witnesses' needs but may entail an explanation of the hearing process, what is expected from the witness (how they should direct their answers, navigating a trial bundle, techniques for dealing with cross-examination, etc.) and a mock cross-examination. Often, the lawyers instructed will be able to recommend witness familiarization courses and assist with arranging this training.

Final hearing documents

Often in offshore litigation, such as in the Dubai International Financial Centre (DIFC) Courts (see Part 35.21 of the Rules of the DIFC Courts passed by the DIFC Authority (RDC)), and in arbitration, the claimant will be responsible for the preparation of the trial bundle. The purpose of the trial bundle is to collate all of the relevant material to which the parties wish to refer during the hearing, so that the proceedings can run as efficiently and smoothly as possible. The preparation of the bundle can be a time-consuming process, requiring the consensus of both parties; however, it is an important step and can impact the smooth running of the trial. The trial bundle may be in hard copy, electronic form, or a combination of the two. If an electronic bundle is used, consider whether it is necessary for anyone to receive training in advance of the hearing on how to use the electronic platform. In terms of other documents for the final hearing, it is likely that the procedural timetable or pre-trial checklist will already provide for the production of a dramatis personae, chronology and list of issues, but if it does not, consider proposing that the parties come to an agreement on these three items. These documents will greatly assist the court / arbitral tribunal during the proceedings.

Settlement

Exploring settlement options, even at this stage, may save time and costs and has the benefit of reducing the uncertainties that are an inherent element of going to trial. Please see Volume 9 "Settlement" for further information.

Pre-Trial Review

Part 26 of the RDC concerns Case Management, and Part 26.72 gives the court discretion to order a Pre-Trial Review, which is normally scheduled to take place between four to eight weeks before the date fixed for trial. Pre-Trial Reviews are often conducted by the trial judge, and attended by the legal representatives who are to appear at the trial. Prior to the Pre-Trial Review, the parties are required to try to agree to timetable for the trial (providing (as appropriate) for (a) oral submissions (b) factual witness evidence and (c) expert evidence) and must file a copy of the proposed timetable at least two days before the date of the Pre-Trial Review, identifying any differences of view between the parties. At the Pre-Trial Review, the judge may give directions regarding the conduct of the trial, and may set the trial timetable.

Logistical arrangements

DIFC Court hearings will usually be conducted in the DIFC Court hearing room. The general rule is that DIFC Court hearings are public, unless the judge determines otherwise and so members of the public may be admitted to the hearing, where practicable. A similar rule, applies to hearings before the Abu Dhabi Global Market (ADGM) Courts. DIFC Court proceedings are recorded, unless ordered otherwise and the parties may request transcripts of the hearing recordings. The DIFC Court permits the attendance of translators where necessary to assist a witness with providing evidence.

Witness availability

The DIFC Court and ADGM Court may allow a witness to give evidence via video link or by other means, so if a witness cannot attend the hearing in person it may still be possible for them to testify before the court.

Final hearing documents

The rules relating to trial bundles in DIFC Court proceedings are contained within the RDC at Part 35. These are generally more detailed and specific than the rules that apply to trial bundles in arbitration, as they set certain requirements for contents and organization. In particular, unless ordered otherwise, negotiations about the bundle should commence six weeks before the date fixed for trial, the trial bundle must be completed no later than 21 days before the date fixed for trial and a full set of trial bundles must be lodged with the Listing Office at least 14 days before the date fixed for trial. In some cases, a special order for costs may be made against the party responsible for including unnecessary documents in the bundle. The use of IT at trial is encouraged (ie electronic bundles), but must be raised and agreed in advance, such as at the case management conference. The ADGM rules provide that the claimant must circulate the hearing bundle not less than seven business days before the commencement of the trial.

Often the court will set a timetable for the trial in consultation with the parties. However, if this does not happen, the parties will be required to submit a trial timetable. The parties may also be required to submit a reading list for the judge, skeleton arguments and legal authorities. The ADGM rules encourage, and sometimes require the parties to provide the court with an agreed list of issues to be litigated.

Logistical arrangements

Arbitration hearings are generally private, unless agreed otherwise (by way of example, see Article 28.3, Dubai International Arbitration Centre (DIAC) Rules 2007 and Article 19.4, DIFC-LCIA Arbitration Rules 2016). The DIFC-LCIA Arbitration Rules provide that a hearing may take place by video, teleconference, in person or a combination of all three (Article 19.2, DIFC-LCIA Arbitration Rules 2016). Often, one of the arbitral tribunal's early procedural orders will provide that the claimant is responsible for making the necessary bookings for the hearing, following consultation with the respondent. Where the hearing is taking place in person, bookings will often include hiring a venue for the hearing (quite often a large conference room in a hotel, with various breakout rooms), hiring the necessary IT equipment, instructing transcription providers (real-time is often the preference, but daily transcripts are an option) and translators, where necessary. It will be necessary to ensure the hearing room can accommodate all attendees and the preferred layout (which may be U-shaped or a more traditional trial set up, with the witness at one side). Usually half a day or a full day will be required to provide the technicians with enough time to prepare for the hearing. Refreshments are an additional consideration and cost that will need to be factored in.

Costs

In arbitration, the parties will often have agreed, in the Terms of Reference, to share the costs of the hearing arrangements (venue, transcription, translation, etc.) subject to the arbitral tribunal's decision on the allocation of costs. It will therefore be necessary for the parties to liaise when undertaking the initial preparatory steps: for example, the claimant may be expected to provide three quotes for the various bookings, including venue, translators, transcribers, etc. and to obtain the respondent's agreement to the proposed arrangements.

Witness availability

The IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules), which are sometimes incorporated into the Terms of Reference, provide that, if a witness fails to appear for testimony, the arbitral tribunal has the discretion to disregard any witness statement by that witness. It is therefore important that witness availability is confirmed and communicated to the arbitral tribunal as promptly as possible, and that all necessary arrangements are taken to avoid the eventuality of statements being disregarded. This may include obtaining permission from the arbitral tribunal for the witness to appear via videoconference. The DIFC-LCIA Rules provide that the arbitral tribunal has discretion to determine the weight to place on the written testimony of a non-attending witness, including whether to exclude that witness's evidence, and the DIAC Rules provide that the Tribunal may make the admissibility of witness testimony conditional upon the witness providing oral testimony. In onshore-seated arbitrations, it will be important to agree the form of oath for each witness and to ensure that a copy of the relevant holy book is present in the hearing room.

Final hearing documents

The arbitral tribunal will determine, via the procedural timetable, when the trial bundle is due. The rules relating to hearing bundles for arbitration are generally more relaxed than the rules relating to bundles for court hearings; but it is important for the parties to maintain good communication channels between them so unnecessary delays are avoided and trial preparation is not disrupted.