Critical Legal Issues Associated with Arbitration Agreement

Abstract

Despite its high cost and long procedures in some cases, arbitration may be perceived as a safe dispute resolution mechanism, at least in complex and large disputes. This may be owed to the customary unified standards internationally, the relatively high procedural flexibility, its privacy, and reduced uncertainty. As arbitration is an exception to litigation depriving parties of the default litigation right; an arbitration agreement validity is key. The paper explores arbitration agreement forms under the UAE laws and identifies critical matters affecting its validity. To that extent, the maturity and materialization of a dispute is a critical issue that may often be overlooked by disputants. In the context of arbitration however, this becomes more complicated as it interfaces with the tribunal’s capacity and jurisdiction. While the review of the arbitration agreement forms demonstrates both flexibility but high procedural aspects, it is worth highlighting that the materialization of a formal dispute, particularly in construction contracts and similar highly procedural contracts, is a common delay tactic for arbitration procedures defense counsels may resort to. Limited institutional arbitration rules call for a check on the existence of an arbitration agreement on a prima facia basis, the criteria of which, is determined by courts and arbitration centers, leaving generous room for interpretation.