GLOBAL VANTAGE: TRENDS FROM THE DUBAI INTERNATIONAL ARBITRATION CENTRE’S LATEST ANNUAL REPORT

The Dubai International Arbitration Centre (DIAC) has provided dispute resolution services to parties doing business in or via the Middle East, Africa, and South Asia (MEASA) regions for over 30 years. DIAC considers itself the “region’s largest arbitral institution, independent and impartial, committed to excellence, efficiency, and diversity”[1] and recently released its ‘Annual Report 2023’. The Report includes information about the DIAC, including on the Board of Directors; Arbitration Court; Advisory Committee; and the Administrative Body.

2023 caseload statistics

The statistics make up the bulk of the Report. Key takeaways include:

• Case types: DIAC recorded a total of 355 cases, including 323 arbitration cases, 31 appointing authority cases, and a mediation case (noting the launch of the DIAC Mediation Rules on 1 October 2023). This represented a 4.4% rise (from 340) in the total number of cases registered at DIAC and 11% increase (from 292) in registered arbitration cases compared to 2022. This signifies sustained growth in registered cases over a five-year period and the DIAC’s growing reputation as an international forum for resolving commercial disputes, particularly for the MEASA regions.
• Values: The total amount in dispute for all new arbitration cases registered during 2023 surpassed AED5.5 billion (around $1.5 billion), with dispute values ranging from AED17,000 to AED1.09 billion. The average disputed amount was AED17,133,733 ($4,665,412).
• Contract types: Of the 323 arbitration cases, construction and real estate sector disputes were the most prevalent at nearly 60%, followed by banking and finance at nearly 10%, manufacturing and industrial at 6%, and professional services at 5%. The construction industry in the MEASA region has therefore remained resilient despite facing global economic challenges. Correspondingly, construction contracts (40%) and real estate and property contracts (14%) were the most common types of contracts relevant to the DIAC arbitrations. The Executive Summary also notes that almost 75% of the relevant contracts underlying these disputes were concluded within the preceding six years, with over 25% from contracts concluded in 2021 or subsequently.

• Other arbitration statistics:
  • In 2023, most arbitration cases (178) were commenced under DIAC agreements, followed by 102 cases brought under DIFC-LCIA agreements, and 33 brought under DCCI agreements. A recent 2024 decision of the DIFC Court of First Instance has reiterated that DIFC-LCIA arbitration clauses are now understood to be DIAC clauses, so we expect the trend represented in the 2023 figures to continue for a few years yet.
  • The most chosen seat for the arbitration was Dubai (162), with DIFC following closely behind (158).
  • Arbitration participants originated from 49 different countries, with 72% being from the UAE. Among the remaining 28% outside of the UAE, the most common participants were located from Saudi Arabia, the UK, India, Qatar, the USA, and Iraq. It will be interesting to see where Saudi Arabia ranks in this list in the next few years, given the increasing popularity of and competition from the Saudi Centre for Commercial Arbitration.
  • DIAC arbitrations were roughly split equally between Dubai and DIFC. Parties mostly opted for the laws of Dubai and the UAE. However, the laws of England and Wales were a common choice.
  • English was the agreed language in 303 cases (94%), whilst Arabic was chosen in 20 cases (6%).

Other points to note

The Report highlights that parties benefited from provisions introduced by the 2022 DIAC Rules, including expedited proceedings, emergency arbitrator appointments, joinder, consolidation, and handling multi-party and multi-contract disputes. In our own experience, there was some initial reluctance or reticence on the part of DIAC to embrace these new provisions to their full potential, however we expect that to change as the provisions become more embedded with the Centre. The low number of challenges in 2023 was viewed as reflecting DIAC’s robust appointment, disclosure, and transparent challenge procedures.

The Report also includes information around DIAC’s responsible business practices and Dubai as a centre for business activity/arbitration. Notably, it highlights that a poorly drafted arbitration clause can lead to dispute or undermine the progress of proceedings. It suggests parties should always include a well-drafted arbitration clause in their contracts and encourages use of the exemplar recommended clauses (including on dispute resolution and sustainability under The Green Pledge and Campaign for Greener Arbitrations). It is prudent to seek independent specialist legal advice on the contract terms, including around the choice of the applicable law.

DIAC arbitrations feature arbitrators from around the globe, with representatives from 29 different countries. 143 arbitrator appointments were made in 2023. Women constituted 31% of the overall 143 appointments, with their representation nearing gender parity at 47% in the 57 appointments made by the Arbitration Court. However, the Report recognises that more remains to be done since diversity was lower in appointments made by parties and co-arbitrators

[1] Dubai International Arbitration Centre (DIAC), Annual Report 2023, page 5

For more information or support on international arbitrations, please visit the Beale & Co website or contact Antony Smith or Claire Miller, Managing Partner in our Dubai office.