On the heels of Federal Law No. 6 of 2021 (Mediation Law) in April 2021, which created a new framework for mediating disputes in the UAE, comes a new law issued to complement the Mediation Law.
On 14 September 2021, Dubai Law No. 18 of 2021 (Mediation Centre Law) repealed and replaced Law No. 16 of 2009, which originally established the Amicable Settlement of Disputes Centre (the Centre) and attached it to the local courts.
With the introduction of the Mediation Law, and now the Mediation Centre Law, the UAE has signaled a strong intention to build on its existing dispute resolution offering so businesses can confidently opt for an alternative dispute solution without resorting to arbitration or litigation.
Mediation Centre Law – context
The Centre was originally established in 2009 with a mandate to consider disputes for which a settlement order was made by the Chief of Courts, regardless of their value or nature. The original powers and duties of the Centre included but were not limited to:
- amicable settlement of disputes presented to the Centre under the supervision of a judge of the Dubai Court of First Instance assigned to the matter (Competent Judge);
- amicable settlement of disputes within a maximum period of one month, which period could be extended for another month or further if so decided by the Competent Judge; and
- employment of experts and specialists as needed.
In addition, if the parties reconciled, their settlement agreement would be approved by the Competent Judge and have the power of an executive instrument, but in the absence of reconciliation, the Centre would refer the case back to the courts of Dubai.
Whilst the framework for the Centre has existed since 2009, detailed procedures for the Centre’s functions were lacking.
The Mediation Centre Law – what has changed?
The Mediation Centre Law expressly seeks to:
- promote the culture of amicable settlement through conciliation;
- encourage the adoption of alternative dispute resolution methods;
- enhance the continuity of contractual relations;
- expedite the adjudication of disputes; and
- provide a work environment that ensures confidentiality of dispute settlement procedures.
(b) Competency of the Centre
Previously, only disputes referred to the Centre by a Competent Judge could be adjudicated. However, in line with article 3 of the Mediation Law, parties are now free to bring disputes to the Centre by mutual agreement.
The Centre has wide jurisdiction, though some specific matters fall outside its competence. In this regard, it cannot review the following applications:
- Temporary orders and requests and urgent lawsuits
- Disputes where the government is a party
- Disputes that fall outside the jurisdiction of the courts
- Disputes that cannot be conciliated under applicable legislation
- Disputes related to personal status
- Lawsuits registered with the courts prior to the implementation of the Mediation Centre Law
(c) Outsourcing the Centre’s functions
A new provision under articles 7 and 8 allows the president of the Dubai Court of First Instance to outsource the Centre’s functions on conciliation to government agencies or authorised entities, who shall then resolve the disputes amicably.
Any conciliators or mediators from such other agencies will be bound by the terms and provisions of the Mediation Centre Law as if they were acting under the auspices of the Centre.
Any such referral to a government agency or entity shall be limited to disputes that arise between companies, private institutions and individuals, related to the competencies established by that government agency or private entity.
In order to ensure that any referral is appropriate, article 10 mandates the establishment of a Conciliators Affairs Committee. The members of this committee shall be empowered to decide whether a government agency or private entity is competent to adjudicate the dispute being referred by the Centre.
This opens the door for private entities to establish mediation centres, which would have official recognition from the courts.