Overview of arbitration

While mediation is also a consensual process, mediation only results in a resolution of the dispute if the parties agree to terms of settlement. In a mediation, it is the mediator’s role to bring the parties together and explore areas of compromise with a view to agreeing final terms of settlement. However, it is the parties who are in control of the outcome. If the mediation is unsuccessful, then the parties will ordinarily have to resort to arbitration or court litigation to resolve their dispute.

While mediation is also a consensual process, mediation only results in a resolution of the dispute if the parties agree to terms of settlement. In a mediation, it is the mediator’s role to bring the parties together and explore areas of compromise with a view to agreeing final terms of settlement. However, it is the parties who are in control of the outcome. If the mediation is unsuccessful, then the parties will ordinarily have to resort to arbitration or court litigation to resolve their dispute.

In arbitration proceedings the dispute is decided by an arbitrator as opposed to a judge. One of the main differences between arbitration and court litigation is that the parties have the ability to choose the arbitrator who will decide their dispute, unlike in court litigation where the court will allocate a judge to the case. Arbitration is conducted in private as opposed to court litigation which is conducted in open court. Arbitration is generally less formal and has the potential to provide for a more flexible procedural framework than court litigation.

The main advantages of arbitration are:

  • Flexibility: Due to its consensual nature, parties are able to agree on procedures for the arbitration that are tailor-made for their dispute.
  • Choosing the arbitrator: In arbitration, parties have the ability to choose the arbitrator who will decide their dispute.
  • Neutrality: For international parties, arbitration offers parties a neutral forum to have their dispute determined.
  • Confidentiality: Arbitration hearings are held in private and parties can agree that the arbitration will remain confidential as between themselves.
  • Finality: An arbitration award is final and can normally only be challenged on narrow and discrete grounds.
  • Enforceability: Arbitration awards can be more easily enforced internationally than court judgments.

Because an arbitral tribunal gets its power from the agreement of the parties, a tribunal generally has no powers against non-parties to the arbitration agreement. Therefore, unlike court litigation, it is generally not possible to join any third parties to the arbitration without the agreement of the parties concerned. It is also generally not possible to compel the attendance of witnesses or require third parties to produce evidence without assistance from the court.

An institutional arbitration is administered by a specialised arbitral institution. An arbitral institution has its own set of rules which provides a procedural framework for the arbitration. It also has its own form of administration to assist with the arbitral process (although the precise services that are on offer can differ from institution to institution).

An ad hoc arbitration is not administered by a specailaised institution. Rather, all arrangements for the arbitration need to be carried out between the arbitral tribunal and the parties.

The main advantage of an institutional arbitration is that the parties benefit from an established format for the arbitration from an institution with a proven track record which specialises in assisting parties with the arbitral process.

Because an ad hoc arbitration is not administered by a specailaised institution, the parties do not incur the added administrative costs associated with an institutional arbitration. An ad hoc arbitration has the potential to be more flexible, faster and less expensive than an institutional arbitration, however much depends on the cooperation of the parties and the case management of the arbitration by the arbitral tribunal for its effectiveness.

Due to its flexible nature, arbitration has the potential to be cheaper than court litigation. However, much will depend on the cooperation of the parties in adopting procedures that are efficient and cost effective. Moreover, if the arbitral process largely mirrors the court litigation process, there are unlikely to be any significant cost savings and, in fact, the arbitration may be more expensive due to arbitrator and institutional fees and expenses.

Due to its flexible nature, arbitration has the potential to be quicker than court litigation. In this respect, much will depend on the conduct of the parties and the case management of the arbitral tribunal. One area where arbitration is likely to be quicker than court litigation (particularly in an international context) is at the enforcement stage due to the narrower grounds on which a party can ordinarily challenge and resist enforcement of an award.

Arbitration in ADGM

ADGM is a leader in the arbitration community with its modern pro-arbitration framework that has been modelled on the UNCITRAL Model Law. This framework is superbly complimented by the ADGM Arbitration Centre (ADGMAC) which is equipped with state-of-the-art technology and hearing facilities and supported by outstanding infrastructure. Together, they provide the ideal forum for parties to resolve their arbitral disputes. See link here for further information in why parties should arbitrate in ADGM.

ADGMAC is a hearing facility that is equipped with state-of-the art technology. ADGMAC is open to all who wish to book the hearing rooms and other facilities for arbitration cases. ADGMAC is not an institution itself, which means that the facilities can be used by parties regardless of which institution they choose to administer their arbitration. In addition, the parties can, and are encouraged to, make use of ADGMAC’s facilities and services even where the legal place of the arbitration is outside of ADGM.

Neither ADGMAC nor its staff provide legal advice. If a party requires legal advice, they should seek this from an independent legal advisor.

No. As noted above, this provides parties with the flexibility to choose the institution to administer their arbitration and is one of the advantages of selecting ADGMAC as the place for their arbitration hearing.

No. Again, this provides parties with the flexibility to choose the arbitration rules which will apply to their arbitration and is one of the advantages of selecting ADGMAC as the venue for their arbitration hearing.

Smart Arbitration employs the use of technology to assist parties with the conduct of their arbitration and is geared towards enhancing efficiency and ease of working. Visit the ADGMAC Smart Arbitration page for further information.

The Arbitration Regulations 2015 provide the basic legal framework for arbitrations conducted in ADGM and comprises the arbitration law that the ADGM Courts will apply if it is called upon in its supervisory role over the arbitration, or at the enforcement stage.

Section 8 of the Arbitration Regulations 2015 provides that, unless stated otherwise, Part 3 of the Regulations shall apply to arbitrations where the seat of the arbitration is the Abu Dhabi Global Market, or where an arbitration agreement applies the Regulations. Part 4 of the Regulations shall apply to the recognition and enforcement of arbitral awards in the Abu Dhabi Global Market, irrespective of the state or jurisdiction in which they are made.

ADGM Courts have a supervisory role over arbitration proceedings conducted in ADGM. Pursuant to the Arbitration Regulations 2015, the Court may be called upon to assist with the arbitral process in relation to such matters as the appointment or removal of an arbitrator, making an order for (or enforcing an order in relation to) interim measures, the taking of evidence and determining a preliminary point of jurisdiction. ADGM Courts are also the competent court to hear any application to set aside an award made in ADGM or to recognise and enforce an award (regardless of where the award was made) in ADGM.

Yes, parties can use foreign counsel in an ADGM arbitration (including in relation to an arbitration hearing conducted in ADGMAC).

Arbitration proceedings conducted in ADGM are confidential as provided for by Article 40 of the ADGM Regulations.

ADGM arbitral awards are enforceable under: the New York Convention in more than 150 countries; multi-lateral and bilateral treaties with certain countries.