In brief
The Dubai International Arbitration Centre (DIAC) has recently released its Annual Report for the year 2022. The Report highlights the new vision and future strategies of DIAC and provides helpful statistics for 2022, including regarding the overall caseload, caseload by value of disputes, sectors represented and the nationalities involved.[1] The statistics show a growth in the number and the value of the cases registered, as well as a broad outreach in terms of the regions involved.
The Annual Report confirms a trend of growth for Dubai as an arbitration hub.
The DIAC was established in 1994 as the Dubai Chamber of Commerce & Industry’s Commercial Conciliation and Arbitration Centre. A decade later, it evolved as the Dubai International Arbitration Centre (DIAC). Following the Decree No. 34 of 2021 issued by Dubai’s Ruler Sheikh Mohammed bin Rashid Al Maktoum, the DIAC became a fully autonomous entity.
In more detail
DIAC Statistics 2022
The Annual Report reveals continued growth in the number of cases registered by DIAC in the last years. DIAC reports that 340 cases were registered in 2022, compared to 276 cases in 2021, and 231 in 2020,[2] which represents approx. 20-23% growth per year (and consistent growth over the last four years[3]).
The Report also highlights the nature of the cases registered, with 44% of the cases involving international disputes. DIAC reports that the cases involved parties from 48 countries, including parties from Europe, China, Southeast Asia, the Middle East and Africa. This is slightly leaning towards local cases as compared to the 2021 statistics, where 47% of cases were reported to have involved one party from the UAE and the other – a foreign party, and 10% of cases – to involve all foreign parties.[4]
The cases registered are reported to have a combined value of approx. USD 3.1 billion. The majority of cases registered (92%) are within the range of up to approx. USD 13.5 million (152 cases with a value of up to approx. USD 272,000, and 160 – up to approx. USD 13.5 million). Two cases of a value over USD 270 million are reported, with one exceeding USD 400 million.
As is usual for the Middle East region, almost half of the cases (49%) represent cases originating from the construction sector, followed by commercial disputes (27%) and real estate disputes (16%).
2022 DIAC Arbitration Rules
The Annual Report further emphasizes the major event of 2022 – the launch of the new DIAC Arbitration Rules.[5] As previously reported, the new DIAC Arbitration Rules introduced inter alia the following:
- The DIFC as the default seat of arbitration, in the absence of agreement between the parties (as opposed to onshore Dubai). As such, arbitrations will be governed by the DIFC Arbitration Law and the DIFC Court will have supervisory jurisdiction over the relevant arbitrations (article 20.1);
- Expedited procedures, with a dispute threshold amount of AED 1 million (article 32);
- Consolidation of multiple claims (article 8) and joinder of third parties (article 9);
- Interim measures and emergency arbitrators are specifically provided for (Appendix II); and
- Third-party funding arrangements must be disclosed by parties (article 22).
Future Strategies
The Annual Report also identifies future strategies for growth and development of DIAC that include:
- Optimising and improving the arbitrators’ selection and onboarding process;
- Expanding the case management team’s capacity and capabilities through providing continuous training and encouraging education;
- Developing an e-case management system and portal; and
- Experimenting with the latest technologies, such as virtual reality, the metaverse and artificial intelligence.
To speak to us in relation to the DIAC and/or DIAC arbitrations, dispute resolution and arbitration matters, or issues more generally, please reach out to the Baker McKenzie contacts above.
[1] https://www.diac.com/wp-content/uploads/2023/06/diac-annual-report-2022.pdf?LinkSource=PassleApp
[2] https://www.lexisnexis.com/uk/lexispsl/arbitration/document/281955/651D-98F3-GXF6-83FY-00000-00/DIAC-publishes-2021-and-Q1-2022-statistics
[3] https://www.fticonsulting.com/emea/-/media/files/emea–files/insights/reports/2022/apr/international-arbitration-after-pandemic.pdf?rev=99711bd4cbed4c0aac79a728e96a7144&hash=FB975DD5CC41B1BCBFAF15367C81CF17
[4] https://www.lexisnexis.com/uk/lexispsl/arbitration/document/281955/651D-98F3-GXF6-83FY-00000-00/DIAC-publishes-2021-and-Q1-2022-statistics
[5] For more details, see: https://www.globalarbitrationnews.com/2023/01/01/baker-mckenzie-international-arbitration-yearbook-2022-2023-united-arab-emirates/
* This article was authored by Luka Kristovic-Blazevic (Partner, Middle East Head of International Arbitration) and Taisiya Vorotilova (Senior Associate, Dubai).
