‘Sign the convention’ says arbitration chief

Dubai’s reputation for dispute resolution is missing vital piece in jigsaw

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By  Sean Cronin Published  April 23, 2005

The director of the Dubai International Arbitration Centre (DIAC) has called on the UAE government to adopt the New York Convention, which guarantees the enforcement of foreign arbitration awards. The move would provide a massive boost to the emirate’s growing reputation as the leading centre for construction-related dispute resolution in the region. But local firms may first have to be convinced of the benefits of signing up to the convention, according to DIAC director Dr Hussam Al Talhuni. “There are a lot of international partners saying ‘sign the New York convention’, while national partners are asking ‘why do they want us to sign it? It must be for their benefit.’ But the contrary is true. “This is actually more of a risk for nationals than international partners, because the international partner will have their award in Dubai and enforce it somewhere in the UAE or GCC. “But for national partners, they are contracting with international partners whose assets are abroad so their awards cannot be enforced in foreign countries which don’t have agreements with the UAE.” Local construction lawyers also want to see the adoption of the convention in the UAE. “It would certainly help Dubai to establish itself as a major centre for arbitration in this part of the world,” said one Dubai-based lawyer. Arbitration has become an increasingly popular alternative to more costly and time-consuming litigation throughout the Middle East. It allows contractors to resolve disputes with clients, sub-contractors or suppliers in a cost-effective way and according to internationally recognised standards. Around three-quarters of the cases currently referred to the DIAC are construction-related. The number of construction cases heard by the centre is also rising as the construction industry in the UAE and the wider GCC expands. DIAC has grown in stature in recent years and has some of the world’s top construction dispute resolution experts on its board. But some commentators believe it could lose out to other centres in countries that have already adopted the New York Convention. DIAC plans to host an international seminar on arbitration in the construction industry later this year.

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