The uncertainty following the abolishment of the Dubai International Financial Centre (DIFC)-London Court of International Arbitration (LCIA) Arbitration Institute last year has been largely resolved by a recent announcement of by the Dubai International Arbitration Centre (DIAC) and LCIA (our earlier post on the Dubai Decree here). This is relevant for any pending DIFC-LCIA administered arbitrations, and those with contracts providing for DIFC-LCIA arbitration.
Key Points
- Parties with contracts that provide for DIFC-LCIA arbitration , and where no dispute resolution proceedings have been commenced (or the matter has not been allocated a case number with DIFC-LCIA by 20 March 2022), will have any new dispute commencing on and from 21 March 2022 administered by the DIAC. Enquiries should be directed to: ArbitrationCentre@DIAC.ae.
- Where the cases have already commenced and have been allocated a case number on or before 20 March 2022, these cases will be administered by the LCIA. Enquiries should be directed to: DIFC-LCIAcasework@lcia.org.
- Any funds paid by parties into accounts previously held by DIFC-LCIA and now by DIAC, will be transferred to the LCIA for administration and disbursement as required.
In September 2021 the Emirate of Dubai abolished the DIFC Arbitration Institute, the administering body of the DIFC-LCIA Arbitration Centre, under Decree No.34 of 2021 of the Government of Dubai (Decree). Under the Decree, property, assets, and lists of arbitrators and members, and selected staff would be transferred to the DIAC. The Decree also allowed for a transition period of 6 months for these measures to take effect.
The DIAC and LCIA have now agreed that any cases formally registered and allocated a case number by the DIFC-LCIA on or before 20 March 2022 will be administered by the LCIA. The LCIA has noted that it will communicate with parties and tribunals regarding these changes as soon as practicable.
For disputes commenced on or after 21 March 2022 (or commenced but not registered and allocated a case number by the DIFC-LCIA), any arbitration, mediation or other alternative dispute resolution process which refers to the rules of DIFC-LCIA or such proceedings where the DIFC-LCIA is requested to act as appointing authority or administrator, shall be registered by DIAC and administered by DIAC in accordance with its rules.
All agreements providing for arbitration at the DIFC-LCIA, which were concluded by the date of entry into force of the Decree (20 September 2021), will be considered valid and effective by DIAC who will effectively act as substitute for DIFC-LCIA in the hearing and settlement of the disputes arising out of such agreements, unless the parties agree otherwise.
Parties with existing contracts containing DIFC-LCIA clauses, including where a dispute is not already on foot, need to be aware of the consequences of the recent announcement. In light of the new arrangement in place between DIAC and LCIA, parties should consider whether they wish to make any changes to arbitration provisions in their contracts, particularly if DIAC is not the preferred administrating body – noting that DIAC rules of procedure will be deemed to apply, including in relation to fees and costs.
DIAC has issued new arbitration rules, which took effect from 21 March 2022. These new rules follow a similar pattern to the rule changes across various arbitration centres in 2021 (including the LCIA), such as embracing consolidation of proceedings, joinder of parties, identification of third-party funders, and a framework for expediting proceedings. The new DIAC rules also confirm that costs (including legal costs) can be awarded by a tribunal.
