AACE International

209 Prairie Avenue, Suite 100,

Morgantown, WV,
USA

In accordance with the requirements of partial fulfillment for recognition as a Certified Cost
Engineer by AACE International, I hereby submit the paper entitled:

Arbitration Procedural Steps under Dubai International Arbitration Center (DIAC)

Rules

Membership ID: 58520

Date: 5th of September 2010

I
 Table of Contents
Table of Figures........................................................................................................................................III
Acknowledge............................................................................................................................................IV
Abstract.....................................................................................................................................................V
1- Introduction..........................................................................................................................................1
2- Arbitration, Mediation and Litigation....................................................................................................2
3- How does arbitration differ from going to court (Litigation)?...............................................................3
3.1- Advantages of arbitration compared to Litigation (going to court)................................................3
3.1.1- Time and Duration...................................................................................................................3
3.1.2 - Confidentiality........................................................................................................................3
3.1.3 - Choosing of the Arbitrator......................................................................................................3
3.1.4 - General Flexibility...................................................................................................................3
3.1.5 - Worldwide Enforcement........................................................................................................4
3.2 - Disadvantages...............................................................................................................................4
4 - Why should either party of an arbitration case suggest mediation to resolve the dispute and why?..4
5- Impacts of including a set of rules have on the arbitration process......................................................5
6 - Dubai International Arbitration Center Rules – Procedural Steps........................................................6
6.1 - Formation of the Tribunal.............................................................................................................6
6.2 - Case Transmission to the Tribunal.................................................................................................6
6.3 - Determination of the seat of arbitration and hearing meetings....................................................6
6.4 - Preliminary Meeting......................................................................................................................7
6.5 - Statements submission.................................................................................................................7
6.5.1 - Submission of statement of claim..........................................................................................7
6.5.2 - Submission of statement of Defense......................................................................................7
6.6 - Evidence and Burden of Proof.......................................................................................................8
6.7 - Hearings........................................................................................................................................8
6.8 - Witnessing.....................................................................................................................................8
6.9 - Proceeding closure........................................................................................................................9
6.10 - Releasing of the Award................................................................................................................9
6.11 - The approximate time prior to the issuing of the final award.....................................................9
7 - Appealing of the Arbitration Award.....................................................................................................9
8 - Conclusion..........................................................................................................................................10

II
Bibliography............................................................................................................................................11

Table of Figures

Figure 1 Dispute Resolution Ways Comparison.........................................................................................7

Figure 2 Cost, Time and Control Comparison..........................................................................................10

III
Acknowledge

During the preparation of this paper, I received a lot of help from my colleagues and
friends. I would like to give special thanks to Mr. Jamal Yahya, Projects Director of
United Modern Project who has urged me to study cost engineering. And also to my
friend Mr. Shehab Sleem, Senior Planning Manager at IFA Hotels and Resorts who
was always beside me during my career path.

IV
Abstract

Nowadays, ADR (Alternative Dispute Resolution) has taken a huge place in the construction industry.
As the construction industry is expanding and lot World-class projects are launched by developers who
have no time for long term litigation processes, arbitration takes place for the resolution of the arising
disputes. This happens because of the arbitration ability of time saving and worldwide enforcement of
awards while compared to regular litigation. Here in Dubai, the DIAC (Dubai International Arbitration
Center) is involved in most of the arbitration cases. Involvement of particular organization in the
arbitration case happens when this mentioned in the arbitration agreement or in the clause defining
arbitration conditions in a project's contract. Involvement of such organization in the arbitration
process adds some rules which govern that process. In this paper, I will try to clarify the arbitration
procedural steps under the DIAC (Dubai International Arbitration Center) rules.

The purpose of this paper is to differentiate between Arbitration, Mediation and Litigation and to show
the advantages and disadvantages of each way of dispute resolution. It will also show the impacts
including set of rules as the rules of DIAC (Dubai International Arbitration center) to the arbitration
process.

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1- Introduction

People who are not well exposed to arbitration and mediation often confuse the two types of
alternative dispute resolution (ADR). They may not know that arbitration results in a final and binding,
enforceable and binding award, and subject to limited cases of appeal or court review. They may not
know that mediation process is non-binding, and that the goal of mediation is for the parties to reach
an acceptable agreement to settle their dispute with the help of a neutral third-party (mediator).

Most of the civil disputes are still ruled in courts by regular ways of litigation. However nowadays,
courts in every place have become very crowded and overloaded, causing a huge delay for justice.
Arising From the situation of the court overloading, authorities and centers have been established to
role the arbitration and mediation processes. Processing of an arbitration case under the rules of an
arbitration center or an organization has a lot of impacts to the procedures.

The DIAC (Dubai International Arbitration Center) was established for governing and setting rules for
the arbitration process. The impacts of following of these rules if this was stated in the arbitration
agreement or accepted by both parties of the arbitration case vary from impact to time and durations
to impact to seat of arbitration and the used languages in the case. I will try to summarize the main
procedural steps of arbitration case under the DIAC (Dubai International Arbitration Center) rules.

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2- Arbitration, Mediation and Litigation

Arbitration and Mediation are two different ways of dispute resolution types called Alternative Dispute
Resolution. ADR procedures are very fast and effective compared to regular litigation.

Mediation is a kind of dispute resolution by which a dispute can be resolved by the aid of a neutral
third party who will help both parties to reach and format an agreement using Win-Win solutions.
Opinions and recommendations of the mediator are not enforceable.

Arbitration is a kind of dispute resolution of which a tribunal (set of arbitrators- should be odd in
numbers) is appointed by the Claimant and the Respondent to produce an in appealable award based
on the submissions (claims, statements and evidences) and hearings of both parties .

Arbitration differs from litigation (Going to Court) in many ways.

Figure 1 Dispute Resolution Ways Comparison

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3- How does arbitration differ from going to court (Litigation)?

Arbitration differs from going to court (Litigation) in many ways. Differences between Arbitration and
Litigation can be classified as advantages and disadvantages.

3.1- Advantages of arbitration compared to Litigation (going to court)

3.1.1- Time and Duration

The most important advantage of arbitration is that it can be finished shortly compared to the duration
taken usually by litigation. This due to the crowded courts’ calendars, red tape, procedures that
consume a lot of time.

Beside that the durations of hearings take a long time to be finished as has to be completed once it has
started.

As arbitration is much faster than litigation, it is also not costly as litigation. The total cost of a litigated
case can exceed the amount awarded in the final award.

3.1.2 - Confidentiality

Arbitration is always confidential unless it is stated in the arbitration agreement or requested by either
parties or the tribunal.

3.1.3 - Choosing of the Arbitrator

Arbitration is much flexible in the choice of the arbitrators and formation of the tribunal. The arbitrator
is not required to be of a law background other than having a strong background related to the issues
of the dispute.

3.1.4 - General Flexibility

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Arbitration processes are generally flexible. Once the tribunal is appointed, the tribunal will choose
proper places and timings for hearings and witnessing suitable for the whole parties.

The tribunal may also modify durations of the submittals’ of the statements of claims and defense as if
it sees that extension of time is required for either party to maintain their burden of proof.

3.1.5 - Worldwide Enforcement

Enforcement of the arbitration award obtained in an arbitration seat following the UNCITRAL model
law will make this award able to be enforced worldwide in countries following the mentioned law

“48. Under article 35(1) any arbitral award, irrespective of the country in which it was made, shall be
recognized as binding and enforceable, subject to the provisions of article 35(2) and of article 36
(which sets forth the grounds on which recognition or enforcement may be refused). Based on the
above consideration of the limited importance of the place of arbitration in international cases and
the desire of overcoming territorial restrictions, reciprocity is not included as a condition for
recognition and enforcement.”1

3.2 - Disadvantages

Although arbitration has lot of advantages, it also has disadvantages. The loser of the case can appeal
the arbitration award in very limited cases. In addition of that, there is no legal aid obtained during the
arbitration.

“Conventional wisdom poses that arbitration is a better way to resolve disputes than litigation.
Depending on the identities of the parties, the type of dispute, and the amount at stake, however, an
aggrieved party might fare better in court.” 2

4 - Why should either party of an arbitration case suggest mediation to

resolve the dispute and why?

1
United Nations Commission on International Trade Law – UNCITRAL Model law on Commercial International
Arbitration – Chapter viii – Recognition and Enforcements of Awards – Article 48
2

John R. McGinley, Jr. a trial lawyer and is also in the Corporate Division of Eckert Seamans Cherin and Mellott LLC
in Pittsburgh, PA.

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Mediation has a lot of advantages that make suggesting going for it instead of arbitration is a better
decision. It is a way of resolving of misunderstandings between parties of the same contract. It is an
informal way of resolution of disputes. Without formalities and losing time, direct negotiations can
start immediately between the dispute parties by the aid of a third party (Mediator).

Mediation between parties can end with a win- win solution which is much better to happen in a case
that the rest of the contract between parties has not been completed yet

Mediation process is quicker than arbitration and is much cheaper than going for arbitration.

Figure 2 Cost, Time and Control Comparison

5- Impacts of including a set of rules have on the arbitration process

Including set of rules to an arbitration process has a great impact to this process. These rules will
govern all the activities and procedures made during the arbitration process. Number of arbitrators,
their nationalities and their fees will be mentioned in these rules. Also the seat of arbitration, places of
hearing and the used language or languages will be determined in these set of rules.

Duration of the arbitration and time limits for statements submission is usually stated in these rules. In
addition to that, not following these rules may result that the award made by the tribunal to be
appealed in case of breaching of these rules as stated in arbitration laws of some countries the (i.e.
Egyptian Arbitration Law.- Law No. 27/1994 Promulgating the Law Concerning Arbitration in Civil and
Commercial Matter.)

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6 - Dubai International Arbitration Center Rules – Procedural Steps

Most of the arbitration agreements signed in Dubai state that the arbitration case has to follow the DIAC
(Dubai International Arbitration Center) Rules. Following such rules will have great impact to the
arbitration case. These rules define number of arbitrators forming, durations of submissions for claims
and counter claims.

DIAC procedures can be summarized as follows:

6.1 - Formation of the Tribunal

DIAC (Dubai International Arbitration Center) Rules state that number of arbitrators has to be uneven. In
case of three arbitrators, each party has to appoint an arbitrator. The appointed arbitrators from both
claimant and respondent will appoint the third arbitrator (The Chairman)

Once the tribunal has been formed and appointed, the DIAC (Dubai International Arbitration Center)
procedures have to be followed. In addition to that, if the DIAC procedures are not covering a particular
situation, parties and the tribunal may suggest additional governing procedures and rules.

6.2 - Case Transmission to the Tribunal

DIAC shall transfer the case file to the tribunal once it is formed and appointed. File transmission will be
upon the payment of the fees and costs the DIAC has required.

Determination of the arbitration duration, time limits and time limits extension if needed

Parties of the arbitration case can decide to shorten the time dedicated to the arbitration after the
approval of the appointed tribunal.

The tribunal has the power may extend the time limits provided in the arbitration agreement or the
rules so long as it has given both parties a reasonable opportunity to state their views.

The executive committee may extend the time limits in order to allow the tribunal or the executive
committee itself to be able to accomplish their responsibilities and obligations.

6.3 - Determination of the seat of arbitration and hearing meetings

The seat of arbitration shall be Dubai. The parties can determine another place to be the seat of
arbitration in the view of the circumstances of the case. The parties shall submit substantiations for the
choice of that place. The agreement on that issue has to be written.

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The tribunal may choose a certain place for Hearings or Meetings as long as it sees that these places are
appropriate for fulfilling their responsibilities.

Note: The award will be deemed to be released from the seat of arbitration

6.4 - Preliminary Meeting

Within a time period of 30 (Thirty) days from the tribunal receiving of the case file, the tribunal has to
notify the case parties of the date and the venue of the preliminary meeting. The tribunal will fix dates
for the submission of the documents required i.e. statements of claims and defense

6.5 - Statements submission

6.5.1 - Submission of statement of claim

If the statement of claim is not submitted with the arbitration request, the Claimant has to submit the
statement of claim to the tribunal and to the respondent with a copy to the Dubai International
arbitrator center within a time limit of 30 (thirty) days from the claimant receiving of information of the
appointment of the tribunal.

The tribunal has the right to extend the submission duration of the statement of claim if needed.

The statement of claim has to contain all the agreements, documents and evidences i.e.
correspondences, minutes of meetings, change orders with a log of such documents.

6.5.2 - Submission of statement of Defense

Upon receiving of the statement of claim or notification from the DIAC (whichever happens later), the
respondent has to submit his statement of defense to the tribunal and to the claimant with a copy to
the DIAC.

Note: submission of new claims, counter- claims is prohibited for both parties the claimant and the
respondent unless it is authorized by the tribunal which will decide doing so in the view of the
arbitration stage and the current circumstances

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6.6 - Evidence and Burden of Proof

Both parties, the claimant and the respondent, have to support their statements by proofs and
evidences required by the tribunal.

The tribunal has the right investigate and inspect documents or properties in case of the need of this.

6.7 - Hearings

The tribunal has to issue a schedule of hearings and to inform parties of the hearings times in advance.
The presence of expert witnesses is requires. Types of records of such hearings will be decided by the
tribunal.

Parties can decide that hearings are not held in private in a written agreement. Hearings are held in
private unless it is requested by any party.

Note: In case of failure of any party to attend the hearing, the tribunal has the right to proceed with the
hearing after his party is summoned.

Where will the various meetings and hearings be held and who decides?

According to Dubai international Arbitration center Rules which are the governing rules in this case, the
tribunal has to choose places for meetings and hearings with the aid of the parties.

“20.2 The Tribunal may, after consultation with the parties, conduct hearings or meetings at any place
that it considers appropriate. The Tribunal may deliberate wherever it considers appropriate.” 3

The tribunal shall choose carefully the place of these venues

6.8 - Witnessing

In case of requiring of witness of fact hearing, prior to this hearing with a period of 15(fifteen) days, the
tribunal and the other party have to be informed about this hearing with the full data , address and
language of this witness and the rule of this witness regarding the arbitrated issues.

3
DIAC Arbitration Rules – Article 20 - Place of Arbitration – Clause 20.2

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6.9 - Proceeding closure

Once the tribunal is convinced that the data and evidences collected through the various hearings and
submissions are enough for proceeding with the arbitration award, the proceeding is closed for such
procedures.

Under very limited circumstances, the tribunal shall allow new submittals and hearings if needed to
justify any uncovered issue and if this procedure seems to be effective for an appropriate final award.

6.10 - Releasing of the Award

After closure of proceeding, the tribunal shall issue the award (Final or of any type as preliminary award
etc). The award shall be released prior to the ending of determined duration of arbitration.

6.11 - The approximate time prior to the issuing of the final award

After the file transmission to the tribunal and within six months, the tribunal has to issue the final
award.

The executive committee may extend the arbitration period by another six months if it sees that this
period is required or by a request from the tribunal with substantiated reasons for the request of this
extension.

7 - Appealing of the Arbitration Award

The arbitration award cannot be appealed by any mean. If a party losses the arbitration, and within 30
(thirty) days from receiving the award, such party can send the tribunal for an interpretation for the
award. This interpretation will be considered after that a part of the award.

The company can also send to the tribunal mentioning any kind of mistakes in calculation or values in
the final award within 30 (thirty) days from the receiving of the final award.

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8 - Conclusion

Arbitration is a very fast, effective and worldwide recognized ADR (Alternative Dispute Resolution). Once
stated in the arbitration agreement that the arbitral procedure have to be governed by certain rules,
these rules will completely role every procedure during the arbitration case.

DIAC (Dubai International Arbitration Center) Rules have covered all the point that can arise while
arbitrating. It covered the used language(s), durations of submissions, seat of arbitration and many
things that may arise during the arbitration process. Following those rule by both parties, the claimant
and the respondent, will help the appointed tribunal to fulfill their role form the best of both parties.

Also DIAC Rules stated that in case of none covering of the rules o any arising issue, the tribunal and the
executive committee have the right to establish rules to be followed covering the rising issue. This
reflects how much arbitration is flexible, fast, reliable, and cost saving type of ADR (Alternative Dispute
Resolution

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Bibliography

Dubai International Arbitration Center - Arbitration Rules

The UAE Civil Procedure Code, Federal Law No. (11) Of 1992 - Chapter Three - ARBITRATION

http://www.ciob.org.uk/topics/legal - Legal and Dispute Resolution – Visited on July 21st 2010

Arbitration in Construction Contracts – Tony Mallouli – Department Head- Banking, Real Estate
and IT, Habib Al- Mulla and Co.

Egyptian Arbitration Law.- Law No. 27/1994 Promulgating the Law Concerning Arbitration in
Civil and Commercial Matters)

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