Reed Smith In-depth

On 29 April 2021, the UAE’s federal government issued Federal Law No. 6 of 2021 on Mediation in Civil and Commercial Disputes (the UAE Mediation Law). This law builds upon previous groundwork for mediation by providing a robust mediation framework throughout the UAE. The law implements a number of international best practice features, which are likely to encourage mediation for resolving commercial disputes. These include freedom to select and appoint a private mediator, protection of ‘without prejudice’ discussions, and a foreshadowed registration regime to ensure suitably qualified mediators.

Existing mediation landscape

Mediation has deep historical roots in local culture. Whilst commercial disputes are often resolved through arbitration and court actions, it is certainly not unheard of for multi-million dollar commercial disputes to settle amicably in the majlis (Arabic: ‘a place for sitting’), guided by a respected third party. Formal mediation options for commercial disputes have also existed for some time. Both the Abu Dhabi and Dubai chambers of commerce offer mediation services to members, the Centre for Amicable Resolution of Disputes in Dubai provides compulsory mediation services for smaller claims and optional mediation for larger ones (Dubai Law No. 16 of 2009, as amended by Administrative Resolution No. 1 of 2017 and Administrative Resolution No. (51) of 2020), and mediation is available under rules applicable in the Dubai International Financial Centre Court and Abu Dhabi Global Market Court.

What has changed?

The UAE Mediation Law is landmark legislation. It creates a comprehensive regulatory structure for mediation throughout the UAE for the first time, ensuring that a consistent framework applies in all emirates. The law follows a global trend towards regulation that either strongly encourages or mandates mediation of civil disputes. For example, in the UK, local courts have power to encourage mediation, provided both parties consent, while in Australia, the courts have power to compel parties to mediate, regardless of their consent.