Arbitration

In the UAE, the legal and financial landscape is divided between two types of zones

The “Onshore” Zone Law

The onshore zone law covers most of the UAE’s territory and is subject to the federal laws and regulations of the UAE government. Within this zone, businesses and individuals are governed by the UAE Civil Code, the UAE Commercial Companies Law, and other federal laws applicable to various aspects of business, trade, and activities conducted in these areas

The “Offshore” Zones, Known as “Free Zones” Law

Offshore zones, or free zones, are established as independent jurisdictions with their own legal and regulatory frameworks. They operate under separate laws, often based on common law principles, and have specialized courts to adjudicate matters within their jurisdictions. Notable examples include

DIFC (Dubai International Financial Centre)
Founded in 2004, the DIFC operates as a financial free zone with its legal foundation established by Federal Law 35/2004 and Dubai Law 9/2004

ADGM (Abu Dhabi Global Market)
Established in 2015 in Abu Dhabi, the ADGM functions as an autonomous financial free zone with its own set of laws, including a Court of First Instance and a Court of Appeal, based on common law principles

Dispute Resolution in Onshore and Offshore Zones

These institutions are not limited to handling disputes arising within specific free zones. Parties involved in onshore or offshore arbitration disputes can use any of these institutions to administer their dispute, provided they are specified in an arbitration agreement

Validity of Arbitration Agreements in the UAE

The validity of arbitration agreements in the UAE is subject to specific requirements, including

**Written Form**
The arbitration agreement must be in writing

 **Arbitrability of the Dispute**
The subject matter of the dispute must be capable of settlement by arbitration under UAE law

 **Legal Capacity of Individuals**
Individuals entering into the arbitration agreement must have the legal capacity to do so

**Legal Capacity of Companies**
Companies must have the legal authority and capacity to enter into arbitration agreements

**Precision of the Arbitration Agreement**
The terms of the arbitration agreement must be clear and precise