On the 29th of April 2024, the Dubai Court of Appeal (COA) issued a landmark Judgement in Appeal Number 11 of 2024 (Appeal), wherein the COA clarified the legal position concerning the requirement of having an Award signed by all the members of the Arbitral Tribunal (including the Arbitrator that dissented with the majority) and in doing so, affirmed the validity and enforceability of an Award which was only signed by the majority of the Arbitrators.
Brief Background And COA’s Determination
The subject matter of the Appeal was the nullification of an Award, which was rendered in an Arbitration, presided by a three-member Tribunal. The Appellant raised several grounds in support of the application for annulment, including that:
1. The Award was only signed by two members of the Arbitral Tribunal; and
2. The Award did not contain (i) the signatures of the third Arbitrator who dissented with the majority or (ii) his dissenting opinion.
The COA rejected the challenge on the aforementioned grounds raised by the Appellant. The rationale behind COA’s rejection was as follows:
1. Firstly, COA emphasized that based on the jurisprudence of the Court of Cassation, the aim of the new Arbitration Law (i.e., Federal Law No. 6 of 2018) is to prioritize procedural fairness. The COA highlighted Article 54(6) of the Arbitration Law as evidence of such aim, which allows the relevant Court presiding over the annulment requests, to suspend the annulment procedure for a maximum period of sixty (60) days allowing the Arbitral Tribunal an opportunity to amend the Award and rid it of any such procedural irregularity. As such, in the form of Article 54(6), the legislator provides a venue which allows for the correction of any procedural irregularities tainting the Award, thus reducing the grounds for nullification and maintaining the sanctity of the Award.
2. Secondly, with regards to the rules on signing an Award, the COA relied on Articles 41(2) and 41(3) of the Arbitration Law and confirmed that:
a. An Award can be issued by the majority of the Arbitrators, in the event the Tribunal consists of more than one Arbitrator. In this instance where all Arbitrators fail to form the majority, the president of the Arbitral Tribunal should sign the award unless agreed otherwise. As such, the absence of the signatures of the dissenting Arbitrators does not constitute a ground for the invalidation of the Award.
b. In the event one of the Arbitrators refuses to sign the Award, then the reasons for such refusal shall be recorded. However, the inclusion of the dissenting opinion within the Award does not constitute a ground for the invalidation of the Award.
As such, based on Articles 54(6) and 41(2) and (3) of the Arbitration Law, the COA determined that the fact that the majority of the Arbitrators signed each page of the Award, and corrected any procedural error therein, was sufficient to render the Award valid and enforceable under the applicable law, notwithstanding that the dissenting Arbitrator did not sign the Award or his dissenting opinion was not included therein.
Implications of the Judgement
The Judgement is a welcome addition to the UAE’s Arbitration landscape. It affirms that such grounds, which do not adversely impact the procedural integrity of the Arbitration proceedings, do not constitute as valid grounds in respect of the annulment of an Award. Moreover, it rids the issuance of an Award from any unwarranted delays by confirming that:
1. An Award is valid if it is signed by a majority. Subsequently, there is no requirement to wait for the signature of the dissenting Arbitrator to issue the Award; and
2. A dissenting opinion need not be recorded in an Award. Therefore, the majority Arbitrators need not wait for the opinion of the dissenting Arbitrator to issue the Award.
As such, the precedent set by the Judgement promises to enhance the overall efficacy and reliability of Arbitration in the region. This development is expected to bolster confidence in Arbitration, making it an even more attractive option for dispute resolution within the UAE and beyond.
Disclaimer
This publication does not provide any legal advice and it is for information purposes only. You should not rely upon the material or information in this publication as a basis for making any business, legal or other decisions. Therefore, any reliance on such material is strictly at your own risk.
Author: Ayesha Zia (Senior Associate)
