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The UAE’s legal system, long anchored in the civil law traditions of Sharia and continental codes, is slowly but surely embracing the common law influences and nowhere is this more vivid than in the country’s arbitration landscape which has become the lifeblood of a nation thriving on international trade.

Through recent rulings from the Dubai and Abu Dhabi Courts of Cassation, we’ll explore this transformation, tracing UAE’s journey from rigid formalism to a hybrid legal tapestry.

The Growth of Arbitration in the UAE: From Rules to Results

Arbitration in the UAE took root as the nation emerged as a trade hub in the late 20th century. Governed initially by the Civil Procedure Code (Federal Law No. 11 of 1992), it was a process bound by strict rules. Courts often stepped in, treating procedural missteps as grounds to dismiss cases—a civil law trait that prioritized compliance over outcomes. This approach sometimes frustrated international parties used to the adaptability of common law systems.

Change arrived with Federal Law No. 6 of 2018, the UAE Arbitration Law, aligned with the UNCITRAL Model Law. It introduced ideas like separable arbitration clauses, limited judicial oversight, and enforceable awards, reflecting global standards often seen in common law jurisdictions. Decree No. 34 of 2021, which dissolved the DIFC-LCIA and shifted its cases to the Dubai International Arbitration Centre (DIAC), further modernized the framework. These steps aimed to position the UAE as a competitive player in international arbitration, setting the stage for courts to interpret disputes with a broader lens.

Dubai Court of Cassation Case No. 1514 of 2022: Rethinking Procedural Hurdles

This case stemmed from a construction dispute under a FIDIC contract, a common framework in the UAE’s booming infrastructure sector. The contract required pre-arbitral steps, such as referral to a dispute board before arbitration could begin. When these were skipped, the respondent argued the tribunal lacked jurisdiction, citing a breach of process.

Historically, UAE courts took a hard line and treated non-compliance as a jurisdictional defect—a civil law reflex rooted in statutory precision. The results were such that cases were tossed out, forcing parties to retrace their steps, often at significant cost and delay.

The Dubai Court of Cassation broke from this pattern in 2022. It classified the pre-arbitral conditions as matters of admissibility, not jurisdiction. The tribunal’s authority remained intact, with proceedings simply paused until the steps were fulfilled. However, this insight was obiter dictum—an aside—since the court found compliance had occurred, tempering its immediate weight.

Jurisdiction determines whether a tribunal can hear a case at all, while admissibility asks if the timing is right. By choosing the latter, the court empowered tribunals to manage procedural missteps without unraveling the entire process—a move that prioritizes resolution over rulebooks. 

The ruling mirrors practices in common law jurisdictions, such as the UK, where admissibility allows tribunals to pause rather than perish. Civil law’s instinct to annul for procedural flaws takes a backseat here.

Dubai Court of Cassation Case No. 828 of 2023: Expanding Arbitration’s Reach

A commercial dispute arose between parties tied to a master contract with an arbitration clause. Subsequent purchase orders, linked to the contract but silent on arbitration, sparked disagreement. One side argued these orders fell outside arbitration’s scope, pushing for court litigation instead.

The court disagreed, ruling that the master clause extended to the purchase orders due to their “close connection” to the original agreement. It favored a contextual interpretation over a strict reading of the documents.

The court’s logic rested on the bigger picture that the purchase orders weren’t standalone deals but extensions of the master contract’s commercial relationship. This departs from civil law’s traditional reliance on explicit wording, embracing a more holistic view of intent and purpose. For businesses juggling multi-layered contracts, it’s a practical win, keeping resolution streamlined.

This approach echoes the UK’s Fiona Trust v. Privalov [2007], where courts presume parties intend related disputes to stay within arbitration unless explicitly carved out. Common law’s emphasis on inferred intent contrasts with civil law’s tighter focus on text.

Abu Dhabi Court of Cassation Case No. 536/2024: Upholding Arbitration Intent Post-Institutional Dissolution

The case talks about an arbitration clause referenced the DIFC-LCIA, dissolved in 2021 under Decree 34, with proceedings shifted to DIAC. The respondent challenged the clause’s enforceability.

Affirming Case No. 449/2024, the Abu Dhabi Court of Cassation upheld the clause, ruling that the DIFC-LCIA’s dissolution didn’t invalidate the parties’ intent to arbitrate. It endorsed DIAC as a substitute, preserving the agreement’s enforceability.

The court prioritized the arbitration agreement’s substance—mutual consent to arbitrate—over its form (naming a defunct institution). It interpreted Decree 34 as a procedural adjustment, not a nullification, ensuring continuity by allowing DIAC to step in. This pragmatic approach avoided the civil law pitfall of voiding clauses for technical defects, instead honoring the parties’ original bargain. The ruling also clarified that arbitration agreements tied to dissolved entities could adapt to “other appropriate frameworks,” offering flexibility rare in traditional civil law contexts.

This reflects common law’s separability doctrine where arbitration clauses survive external disruptions, and its focus on upholding party autonomy—a stark contrast to civil law’s potential for annulment.

The decision marks a maturation from the pre-2018 era, when institutional missteps might have derailed proceedings. Decree 34 and the Arbitration Law’s liberal framework enabled this adaptability, reinforcing the UAE’s reliability as an arbitration seat amid institutional flux.

Dubai Court of Cassation Case No. 735/2024: Rejecting Unilateral Arbitration Clauses

The case is regarding a subcontract which included a unilateral arbitration clause, allowing the contractor to choose between arbitration at the Dubai Chamber of Commerce or UAE courts. The subcontractor sued in court, and the contractor’s arbitration defense was rejected through the judicial hierarchy.

The Dubai Court of Cassation invalidated the clause, requiring a “clear and explicit” mutual agreement to arbitrate. It deemed the unilateral discretion unfair and ambiguous under UAE law.

The court anchored its decision in Article 203 of the Civil Procedure Code and the Arbitration Law, which mandates mutual consent for arbitration. It scrutinized the clause’s one-sidedness, finding it created an imbalance—allowing the contractor to forum-shop while binding the subcontractor—contrary to arbitration’s consensual ethos. This fairness focus, though framed in civil law terms, suggests an equitable lens, ensuring arbitration isn’t a tool for oppression. The ruling refines arbitration’s boundaries, demanding clarity and reciprocity.

The emphasis on fairness recalls common law’s equitable principles, where courts (e.g., UK’s Jivraj v. Hashwani [2011]) strike down terms that undermine arbitration’s integrity or fairness, blending with civil law’s statutory rigor.

Post-2018, as arbitration grows in the UAE, courts are balancing flexibility with protection. This decision curbs potential abuse of liberalized arbitration rules, aligning with global trends toward equitable dispute resolution.

The future promises deeper convergence with common law, driven by DIAC’s growth, international treaty commitments, and judicial willingness to innovate. However, the civil law foundation will likely endure, fostering a distinct UAE jurisprudence. These cases are a bold step in that journey, redefining arbitration as a bridge between legal traditions.

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