The Authority of Courts and Arbitral Tribunals in Determining Applicable Rules in the Absence of Parties’ Agreement: A Comparative Analysis

Abstract:

This article examines the authority of competent courts and arbitral tribunals to establish relevant regulations in instances where parties are unable to reach a consensus on arbitration procedures, such as the selection of an arbitrator or the determination of an applicable procedural law. Focusing on the UAE Arbitration Law (the “Law”), specifically Articles 23 and 11/5, this article will thoroughly analyze the court’s responsibilities in the process of appointing arbitrator(s) and the discretion of arbitral tribunals in specifying the procedural law to be applied. The interplay between parties’ autonomy and tribunal discretion is explored, highlighting the complexities and potential challenges faced when parties resort to arbitration without a predefined framework

I. Introduction

Arbitration, as a private means of dispute resolution, often thrives on party autonomy and consent. However, disputes may arise when parties fail to stipulate arbitration rules in their agreement. This article examines the ramifications of such a scenario within the framework of the Law, particularly focusing on Articles 23 and 11/5 implications for court obligations in arbitrator appointments and the discretion afforded to arbitral tribunals.

II. Overview of Article 23 of the Law

Pursuant to Article 23 of the Law, the parties involved in arbitral proceedings have the freedom to reach an agreement regarding the specific procedures that the Arbitral Tribunal must follow during the arbitration process. For instance, parties are at liberty to decide whether to incorporate procedures from an Arbitral Institution, whether that institution is located within the UAE (inside the State) or outside the UAE (outside the State).

On the other hand, in cases where the parties fail to reach an agreement on the arbitration procedures to be followed, Article 23 grants authority to the Arbitral Tribunal to decide on the appropriate procedures. However, the procedures selected by the Arbitral Tribunal must be in accordance with the provisions of the Law.

Additionally, the chosen procedures should align with the fundamental principles governing litigation (legal proceedings) and any international agreements that the UAE is a party to. This ensures that the Arbitral Tribunal’s selected procedures are legally valid and consistent with international commitments.

III. The Competent Court Obligations in Light of Article 23 of the Law
Extrapolating section II, on the contrary, a noteworthy point of departure is that courts are not under a legal obligation to impose specific arbitration procedures upon parties or Arbitral Tribunals. This proposition finds solid ground in the Law’s Article 23, a pivotal provision delineating the scope of tribunal discretion in the absence of party agreement. The careful examination of Article 23 is indispensable to fathom the dynamics at play.

IV. The Competent Court Role in Appointing Arbitrators
Unlike the arbitration procedures, the Competent Court does have a role to play when it comes to the appointment of arbitrators. When parties fail to agree on the appointment of arbitrators, the Court assumes an active role in nominating an arbitrator, pursuant to Article 11(5) of the Law. This statutory mandate underscores the Court’s role as a facilitator in maintaining the integrity of the arbitration process when parties’ accord falls short.

V. Tribunal Discretion in Establishing Applicable Rules
Crucially, when parties do not concur on specific arbitration procedures, Article 23 comes to the fore. In these instances, the Arbitral Tribunal is vested with discretionary power to shape the procedural framework of the arbitration process. However, this discretion is not unfettered. It must align with the provisions of the Law and uphold the fundamental tenets of litigation as well as international accords to which the UAE is a signatory. This synthesis of flexibility and limitation is emblematic of the delicate balance legislated under Article 23.

VI. Navigating Challenges: Autonomy vs. Tribunal Discretion
The interplay between party autonomy and tribunal discretion warrants nuanced scrutiny. The freedom of parties to establish their own arbitration rules is a fundamental principle. Yet, it is complemented by tribunal discretion that ensures procedural coherence, legal conformity, and international harmony. The challenge lies in harmonizing these potentially divergent interests, accentuated when parties invoke arbitration without a pre-established roadmap.

VII. Conclusion
In conclusion, the dynamics of arbitration when the parties’ arbitration agreement is silent on the applicable arbitration rules underscore the intricacies of the Law, especially Articles 11/5 and 23. Courts, in accordance with this provision, are not compelled to prescribe certain procedures, which crystallizes the principle of party autonomy. The Competent Court’s role in arbitrator appointments and the Arbitral Tribunal’s role in setting the arbitration proceedings as the procedural rulemaking, exemplifies the interplay between parties’ rights and tribunal discretion, aptly capturing the nuances of arbitration. Recognizing the balancing act between party autonomy and tribunal oversight is imperative for practitioners and scholars engaged in the arbitration domain.

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: Ahmed Usama Rabie

 

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Executive Associate – Ahmed Rabie

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Executive Associate – Ahmed Rabie

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