From international contracts in the energy sector to investment opportunities in infrastructure, real estate and technology, the Middle East and North Africa (MENA) region offers a dynamic economic landscape and a wide range of business opportunities.
2023 brought about important developments in arbitration that are reshaping the way businesses resolve cross-border disputes.
We’ll review the evolving regulatory frameworks and their implications, to help you foster strong international partnerships with a clear understanding of dispute resolution, should the need arise.
2023 Draft CRCICA Arbitration Rules
Recently, The Cairo Regional Centre for International Commercial Arbitration (CRCICA), an independent non-profit organization, shared its new CRCICA Draft Arbitration Rules 2023 soon to be effective as of a date to be determined.
The CRCICA Draft Arbitration Rules 2023 is a revised edition of the 2011 Rules, aligning with contemporary arbitration practices and technological progress, aiming to improve the efficiency, transparency, and adaptability of arbitration proceedings.
Notable amendments include:
New Provisions on Expedited and Emergency Procedures
The 2023 Draft Rules introduce an expedited procedure for claims valued at less than $2 million, aiming to streamline the dispute resolution process and make it more efficient and cost-effective for smaller claims.
New Provisions on the Use of Technology
The 2023 Draft Rules underscored the significance of technology within arbitral proceedings.
They authorize parties to convey notices and other communications electronically (e.g., via email) and offer specific guidelines on determining the effectiveness of such transmissions.
The guidelines also promote the utilization of videoconferencing and other tools to boost effectiveness in virtual hearings.
New Provisions on Joinder and Consolidation, Interim Measures, and Evidence
The Draft Rules 2023 introduce new provisions that cover a range of arbitration matters, including the joinder of additional parties and consolidation of arbitration, the arbitral tribunal’s power to order interim measures and handling of evidence.
- The provisions on joinder stipulate that the arbitral tribunal may, at the request of any party, permit one or more third persons to be added to the arbitration process if they are parties to the arbitration agreement. However, the tribunal has the discretion to deny a joinder if it determines that the joinder could prejudice any of the parties. In the case of permitted joinder, the constitution of the arbitral tribunal remains unaffected, and the tribunal may render a single or multiple awards to the parties involved.
- The provisions on consolidation stipulate that a party may file a Request for Consolidation to combine two or more pending arbitrations into a single arbitration. This is possible if the claims arise under the same arbitration agreement, or the disputes are connected to the same legal relationship or transaction. If the request for consolidation is accepted, this can result in consolidating arbitrations and determining costs. If the request for consolidation is rejected, the non-consolidated arbitrations can continue independently as parallel proceedings.
- The provisions on interim measures stipulate that the arbitral tribunal has the authority to grant interim measures and appoint an emergency arbitrator if the arbitration has not commenced or the tribunal is not fully constituted. Interim measures aim to maintain the status quo, prevent harm, preserve assets, and safeguard evidence.
- Provisions on evidence stipulate that each party is responsible for proving the facts used to support their claim or defense. Witnesses, including expert witnesses, can present their statements in writing unless directed otherwise by the arbitral tribunal.
New Provisions on Third Party Funding
According to Draft Article 53 of the 2023 Draft Rules, parties receiving funding for the proceedings are mandated to disclose the presence of funding and reveal the identity of the funder at the initiation of the arbitral proceedings and consistently throughout the process.
Updates to Costs and Arbitrator Fees
The 2023 Draft Rules incorporate a revised fee and cost schedule for arbitration proceedings, aligning with the evolving financial considerations associated with the process.
New Provisions on Confidentiality and Settlement Assistance
The 2023 Draft Rules underline the importance of confidentiality and settlement assistance in the arbitration process.
Unless explicitly agreed otherwise in writing, the parties commit to maintaining the confidentiality of awards, decisions, and materials created for the arbitration, including those submitted by other parties.
Confidentiality extends to arbitrators, emergency arbitrators, appointed experts, the tribunal’s secretary, and the Center. The Center pledges not to publish any decision or award that discloses the parties’ identity without the written consent of all parties involved.
Draft Article 37 of the 2023 Draft Rules introduced more detailed provisions concerning the conclusion of arbitration, outlining the involvement of the arbitral tribunal in facilitating settlement discussions to promote cooperative and amicable resolutions between the parties.
If the parties reach a settlement before the award is made, the arbitral tribunal may either terminate the proceedings or record the settlement as an arbitral award.
If the continuation of the arbitral proceedings becomes unnecessary or impossible, the tribunal can issue an order for termination, unless there are remaining matters to be decided.
Changes in UAE Federal Arbitration Law
The UAE has recently introduced legislative changes through a new law that amends certain provisions of the Federal Arbitration Law No. (6) of 2018 (the “Arbitration Law“).
The new law, Federal Law No. (15) of 2023 (the “Amendment Law“), introduces changes to the arbitration regime in the UAE, aiming to enhance its efficiency, flexibility, and attractiveness for domestic and international parties.
The updated version involves broadening the scope of the arbitration process, particularly in the context of virtual and online arbitration proceedings.
Under Article 28 of the Amendment Law, parties now have the flexibility to mutually decide on the format and venue of arbitration, whether conducted physically or virtually using technology or technical environment.
In cases where a mutual agreement is not reached, the arbitration tribunal has the authority to determine the mode and location of arbitration, taking into account the specific circumstances and appropriateness for all parties involved.
The Attitude of Jurisdictions in the MENA Region Towards Arbitration
As we elaborate on the landscape of arbitration in the MENA region, it’s important to explore the prevailing attitudes of jurisdictions in the region, shedding light on the regulatory frameworks and approaches that shape the dispute resolution landscape.
Important points to consider include:
- The caseload of the SCCA (Saudi Center for Commercial Arbitration) is increasing, where there is an involvement from 21 different nationalities, but the interest issue is still a warning sign for Saudi Arabia.
- Dubai exhibited imperfections, including the imposition of criminal penalties on arbitrators and the interpretation of DIAC (Dubai International Arbitration Centre) rules. Nonetheless, these issues are now acknowledged and under active resolution.
- The competition across the Gulf is the largest it has ever been, including in the jurisdictions of Saudi Arabia, Bahrain, and Egypt.
- UAE has signed many BITs (Bilateral Investment Treaties), due to the need to protect their investors as well. The underlying objective is to attract more Foreign Direct Investments (FDI) while simultaneously safeguarding the interests of their domestic investors.
- The collaborative initiative between Bahrain and Singapore to bolster their bilateral relations culminated in the creation of the Bahrain International Commercial Court.
The Significance of Developments in Arbitration, as a Business Owner
Developments in arbitration reflect efforts to improve dispute resolution and adapt the process to the contemporary challenges of international commerce.
As a business owner, these developments are significant for several reasons:
- Efficiency and speed: One of the key advantages of arbitration is its potential to be faster and more efficient than traditional litigation. Changes in arbitration rules or procedures aim to make the process quicker and more streamlined.
- Adaptation to commercial realities: As international commerce evolves, arbitration rules need to adapt to these changes. This can include addressing emerging issues in specific industries and facilitating cross-border disputes.
- Confidentiality: Arbitration offers a more confidential method of dispute resolution compared to litigation. Changes in arbitration rules typically reinforce or modify provisions related to confidentiality, depending on the needs and expectations of the parties involved.
- Accessibility and inclusivity: Changes to arbitration rules aim to make the process more accessible and inclusive. For example, by including provisions for small and medium-sized enterprises (SMEs), individuals or emerging markets, arbitration becomes a viable option for a broader range of stakeholders.
- Enforceability of awards: The enforceability of arbitral awards across borders is a key aspect of international arbitration. Changes in rules typically aim to address issues related to the recognition and enforcement of awards in different jurisdictions, to ensure that the arbitral process remains effective.
- Technology integration: Changes in rules reflect the ongoing digitization of legal processes and can incorporate provisions for virtual hearings, online document submissions or case management.
- Global harmonization: Arbitration changes aim to align regional or institutional rules with international best practices in an increasingly interconnected world.
- Public perception and confidence: Changes in arbitration that promote transparency and accountability can contribute to a positive public perception of the arbitration process. This can popularize arbitration as a reliable method of dispute resolution.
Looking for Arbitration Services in the MENA Region? Contact Youssef + Partners
A regional leader in arbitration cases with a proven track record of success, Youssef + Partners provides international arbitration services tailored to the unique needs of businesses in the MENA region.
Our experienced attorneys offer:
- In-depth knowledge of MENA’s legal systems, cultural intricacies and industry-specific regulations to help you navigate the legal complexities in the region
- Tailor-made arbitration strategies that address the unique challenges of your case, to ensure the best possible outcome
- Comprehensive legal support throughout the arbitration process, from case initiation to the enforcement of awards
- Proficiency in multiple languages to facilitate communication between the parties involved in the arbitration proceedings
- A proven track record of success in a wide range of industries, from energy to construction and finance
- A global network of international contacts, including arbitrators, experts and legal professionals
- Adherence to ethical standards, prioritizing transparency and integrity in every step of the arbitration process
Our arbitration experts at Youssef + Partners will help you navigate the legal changes in the MENA region with precision, to make sure your interests are safeguarded at all times.
In addition to arbitration services, we also offer crisis management, pre-dispute and mediation.
Reach out to our team today to schedule a consultation.
