WHEN CAN AN ARBITRAL AWARD BE CHALLENGED UNDER UAE ARBITRATION LAW?
When a contract includes an arbitration Clause, Arbitration is the most common method of resolving disputes. An arbitration clause is signed to resolve any future disputes through Arbitration. A binding or non-binding decision will be specified in the arbitration agreement. For example, if an arbitrator’s judgment were binding, then both parties would have to accept it as such; otherwise, they would be able to take their case to court if they were unhappy with the arbitrator’s decision.
What is an Arbitral Award?
An arbitral/arbitration award is the decision rendered by the arbitration tribunal in an arbitration case. The arbitrator’s Award must be in writing and signed by the arbitrator, and it must include the grounds for making the ruling in the specific instance.
The arbitral Award should be precise in stating the obligations and responsibilities placed on the disputing parties and should not leave any element of the dispute open for further consideration.
Grounds for setting aside or challenging an Arbitral award: Article 53
An arbitral award may only be contested in court via a setting aside action or an application to confirm the judgment is pending. An application for Challenging Arbitral Awards can be made under Article 53 of the UAE Arbitration Law. Any of the following factors must be established by the party seeking to set aside the Award:
- No valid Arbitration agreement exists:
The legality of an arbitration agreement may be questioned in the same way that the validity of a contract can be disputed. If the parties to a contract include the agreement Clause in the contract, the Arbitration will be ruled void if the contract is invalid.
- Incompetent Parties
If a party to the Arbitration cannot protect their interests and is not represented by someone who can do so, an application to set aside the arbitral decision may be made. If the court determines that a party to a contract is minor or an unsound person, the Award may be set aside. When a person reaches the age of 21 in the United Arab Emirates, he or she may enter into a contract without a guardian or court permission (lunar years). As a result, an Emirati under 21 years of age cannot sign an arbitration agreement on their behalf.
- Arbitration procedures were not properly notified to the parties.
If an arbitrator’s appointment or any other notice of arbitral proceedings were not provided to a disputing party following UAE Arbitration Law, this would be deemed a basis for setting aside the arbitral ruling.
The arbitral Tribunal shall set a time limit for submitting the statement. By way of adequate notice and prior notice, the parties must be informed of any hearing or meeting of the Tribunal on any inspection of papers, commodities, or other property for any purpose whatsoever.
- The Tribunal’s composition is not in conformity with the agreement.
It states that an award may be thrown out or contested if the arbitral Tribunal’s composition was not following the parties’ agreement or if the process for conducting the proceedings was not followed correctly. Suppose the arbitrator makes an award decision inconsistent with the terms of reference and the arbitration agreement. In that case, the Award will be set aside, and the arbitrator will be found guilty of misconduct.
- An award that does not come within the provisions of the Submission to Arbitration:
The testimonies of a dispute under an agreement determine the power and jurisdiction of an Arbitral Tribunal. Suppose the Award contains decisions on matters not falling within the terms of the arbitration submission or beyond its scope. However, suppose the decisions on the issues submitted to Arbitration can be separated from those not submitted. In that case, only that part of the Award containing decisions on matters not submitted to Arbitration may be set aside. An arbitrator may not act in violation of the provisions of the contract.
- Arbitral Award not issued within the specified time
An arbitral decision may be set aside because of procedural flaws in many cases or if the arbitral Award was not issued within the specified time mentioned by the arbitrator.
- Disputes that cannot be arbitrated
Arbitration should be an option for resolving the disagreement. In most cases, Arbitration may be used to resolve conflicts concerning private rights that can be adjudicated in a civil court. Due to the nature of these issues, Arbitration cannot be used to determine them.
- Award in violation of public policy
An application for annulment of an arbitral judgment may be submitted if the Award is contrary to Indian public policy. The term “public policy” refers to public benefit and public interest. The explanation of this provision indicates that any award won by fraud or corruption would be deemed contrary to Indian national policy. Additionally, any award obtained by concealing the real facts of the case, whether by deceiving or manipulating the arbitrator, bribing the arbitrator, or using force against the arbitrator, etc., would be subject to revocation as adverse public interest.
This article aims to provide a general overview of the subject. HHS lawyers in Dubai specialize in dealing with cases relating to Arbitration. Please do not hesitate to contact if you have any questions regarding filing an arbitration request with the Arbitration centre or if you would like more information about the Arbitration Agreement.
