Benefit of Justice Principle in Arbitration

Introduction:

The Benefit of Justice Principle is deemed a well-established fundamental principle that is frequently applied by courts in different legal systems either common law or civil law courts
(the “Benefit of Justice Principle”).

Whereby, competent court(s) reviewing and adjudicating correlated disputes and/or cases of related subject matter and parties, accordingly, the aforementioned competent court(s) should adopt and adhere to the Benefit of Justice Principle by joining all the correlated and/or relevant
disputes to be reviewed before the same judicial panel.

Given that, the Benefit of Justice Principle grants the parties of relevant disputes the right to be presented and defend themselves in relation to all the related claims arising out of the said dispute(s) before the same judicial panel that is competent of the trial.

Overview:

The Benefit of Justice Principle has been adopted in many jurisdictions, including, but not limited to, the Arab Republic of Egypt. That being said, the Egyptian Court of Cassation adopted the same principle in various judgments, whereas, is has stipulated that:

“The preliminary awards released by an arbitral tribunal during the deliberation of the arbitration proceedings shall only be challenged on releasing the final award ruling on the merits in accordance with the mandatory procedures stipulated by the Egyptian Civil and
Commercial Procedures Law; pursuant to the benefit of justice principle.”

(Egyptian Court of Cassation Judgment No. 648/75 JY)

Notwithstanding the above, on applying the Benefit of Justice Principle to disputes arising out of more than one obligation and/or agreement(s), courts and parties of disputes will have further challenges; as some of these agreements may include a valid arbitration clause. Knowing that,
Arbitration has become the most common and remarkable method of Alternative Dispute Resolution for mainly resolving commercial and investment disputes (“Arbitration”).

It has been established that, once the parties of a dispute agree to resort to Arbitration (e.g., adhoc and institutional), then, the jurisdiction of trial of the said dispute shall be derogated from any other competent court; as the dispute can only be settled and/or adjudicated through Arbitration in accordance with the consent of the parties.

Application:

The approach of the national courts of the United Arab Emirates is to adopt, maintain and adhere to the Benefit of Justice Principle on disputes where the parties agreed to resort to Arbitration on, in the event, these disputes are relevant to other disputes where the national trial courts are competent to settle and adjudicate the same.

In light of the above, the national courts of the United Arab Emirates, including, but not limited to, the Dubai Court of Cassation has duly adopted the Benefit of Justice Principle on complex disputes having more than one competent jurisdiction through national courts and Arbitration.

“In the event, a case was filed against more than one defendant whom the claimant has separately concluded agreements with, and only one of those agreements included an arbitration clause, and the transaction that is the subject-matter of both agreements is closely correlated and the claim of the dispute is related to the said transaction, then, the benefit of justice requires that the dispute shall be adjudicated by the same judicial entity which is the national court, given that, the court is originally the competent entity rather than the arbitration that is deemed as an exception.”

(Dubai Court of Cassation Judgment No. 209/2021 Commercial)

Conclusion:

In a nutshell, the Unites Arab Emirates’ national courts shall have the right to join, try and adjudicate all the matters and/or agreements relevant to any dispute (i.e., even if any of these agreements includes a valid arbitration clause); based on the adoption of the Benefit of Justice Principle and its application on complex disputes among several parties; which grants the
parties of a dispute in relation to a correlated subject-matter to have the right to defend and represent themselves before the same judicial panel.

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. Any reliance you place on such material is therefore strictly at your own risk.

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