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View or edit your browsing history. Get to Know Us. The Procurement Law requires an ad hoc committee to be formed to hear any dispute either where a contractor believes that a government body has either breached the terms of a contract or a government body believes that a contractor has breached the terms of a contract, performed the contract defectively or engaged in fraud, deceit or manipulation. Owing to these requirements, disputes between a government entity and a private construction company could not be subject to arbitration in Saudi Arabia unless there is a specific approval by the Council of Ministers.
However, the generally accepted position for resolving construction disputes involving a government entity is to do so through the local court system. In Iraq, however, the use of arbitration in relation to government contracts has been explicitly endorsed under article 11 of Regulation No. While there is no systematic reporting of arbitration cases in the Middle East, there are a number of GCC states reporting an upward trend in the use of local arbitration centres for the settlement of international construction disputes.
Construction Arbitration in the Middle East
The earlier period of reluctance by Middle East countries to use Western arbitration centres to resolve disputes has contributed to the development of arbitral systems in the region. Now, as the enthusiasm for Middle Eastern countries to be used as a platform for international trade growth, some arbitration centres have been growing in line with international standards. The Middle East now offers a wide range of regional options for arbitration that include the following. Under the Civil Procedure Law contracting parties are permitted to refer any dispute concerning the implementation of a specified contract to one or more arbitrators.
The UAE increasingly favours arbitration as a suitable mechanism for alternative dispute resolution ADR and is home to the following arbitration centres. Anyone, from any jurisdiction, can opt for the DIFC as an arbitration seat. Once the award is ratified by Dubai courts it can also be enforced in the GCC under the Protocol on the Enforcement of Judgments Letters Rogatory, and Judicial Notices issued by the courts of the member states of the Arab Gulf Co-operation Council for enforcement. The adoption of arbitration as a forum for resolving construction disputes is growing in Qatar and Qatar intends to implement a comprehensive arbitration law.
The new law has been in circulation for over a year and is expected to come into force at the beginning of April QICCA was established in May and is now more frequently being adopted as a forum for the resolution of disputes arising from construction contracts. Generally, parties are free to agree to an arbitration process in a construction contract. In addition, the Qatar financial centre has its own arbitration rules and regulations under the jurisdiction of the Qatar International Court and Dispute Resolution Centre, a wholly separate jurisdiction to the state of Qatar in its own right although at present of limited significance in the context of construction arbitrations.
On paper, Iraq has established three arbitration centres in Baghdad, Basrah and Najaf. Arbitration has been recognised as a mode for dispute resolution under the Iraqi Civil Procedure Code since , and was modernised in when the present Civil Procedure Code came into force. The anti-arbitration sentiment permeated commercial relationships, particularly in government-backed projects involving foreign contractors.
Unreliability and uncertainty became synonymous with arbitration. In , the first democratically elected Iraqi parliament enacted the Investment Law to attract foreign investment, which recognised arbitration as a mode for resolving commercial disputes. However, it was not restricted to Iraqi arbitration, which in practice resulted in further desertion of the local arbitration centres as foreign entities resorted to more developed institutions. While the arbitration centres in Baghdad and Basrah continue to exist on record, they are not really utilised.
The centre is currently drafting its own rules of arbitration. Historically, arbitration in Saudi Arabia has been under-utilised as a method of dispute resolution. However, under local law, government bodies are restricted from using arbitration as a means of dispute resolution. Critical to the choice of the appropriate arbitration centre for any construction contract should be the consideration of the enforceability of any arbitration award sought.
Parties may choose to use a particular arbitration centre if it has intelligence that the respondent holds assets in a particular jurisdiction. This is because a local arbitration award should be more straightforward to enforce by the courts of its home country. If it is not possible or preferable to arbitrate in the country where the respondent holds assets, the Convention can be relied upon for enforcement.
The Convention mainly establishes the principle that a properly made arbitration award in one member country must be binding and enforceable in another member country, unless the award can be rejected on the basis of certain grounds for refusal of enforcement, which are narrowly defined in the Convention. In Saudi Arabia, an arbitration agreement or award is upheld provided that it is not contrary to the principles of shariah law.
In addition, Saudi judges have had wide discretion to issue rulings according to their own interpretation of shariah law, and the judiciary has long resisted the codification of laws or the reliance on precedent when making rulings. These conditions include procedural issues such as the proper notification and representation of the parties before the arbitral tribunal that issues the decision in the foreign country and procedural irregularities.
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UAE courts may also refuse the enforcement of a foreign arbitral award if it contradicts a previous judgment already issued by a UAE court article e of the Civil Procedures Law or if it includes elements that contradict public policy or morals. This controversial ruling has been criticised by arbitration practitioners in Qatar and has raised several concerns including whether the enforcement in Qatar of foreign arbitral awards rendered by arbitrators abroad may reject the idea to render an award in the name of a foreign head of state.
Consideration should therefore be given to whether this mandatory requirement could form part of the law of arbitration in Qatar. In between June and August , a small number of other arbitral awards had simply been set aside for the same reason by lower Qatari courts following the same rationale as the Court of Cassation.
However, the Court of Cassation in Qatar recently clarified its previous decision and decided that international arbitral awards issued by arbitration institutions such as the ICC are considered foreign arbitral awards and thus enforceable in the Qatari courts without the need for them to be issued under the name of His Highness the Emir. Iraq, alongside Libya and Yemen, is one of three Arab countries that have not ratified the Convention. Thus, direct enforcement of a foreign arbitral award in Iraq is problematic as the Civil Procedure Code is silent on its enforcement mechanism.
Foreign investors and practitioners welcomed a breakthrough in when the Iraqi Court of Cassation reconsidered its long-standing position to recognise the status of international commercial arbitral awards. There are also indirect ways through which foreign arbitral awards can be enforced in Iraq.
Recent court decisions are showing positive development, particularly in instances where the arbitral award originated from, or was enforced in, a country that is a member of the Riyadh Convention on Judicial Cooperation. In principle, this development now provides the construction industry with an arguable enforcement recourse via domestic courts that was not historically accessible.
Nonetheless, a comprehensive statutory framework remains lacking. Until Iraq joins the rest of the world by acceding to the Convention, and more efforts and investment are directed to re-establishing existing arbitration centres, Iraq will remain an unfavourable forum for the resolution and enforcement of arbitration awards. Jordan ratified the Convention in While domestic arbitration, including enforcement of local arbitral awards, is governed by the Arbitration Law of , enforcement of foreign arbitral awards is, however, governed by the procedure contained in the Enforcement of Foreign Judgments Law of This is because the decree that ratified the Convention has not expressly displaced the Enforcement of Foreign Judgments Law , which governs the enforcement of foreign arbitral awards and foreign judgments.
Not surprisingly, arbitration developments continue to take place across the region owing to the evolving role of arbitration in the Middle East.
International Construction Arbitration Law - Jane Jenkins - Google Книги
The reforms are not directed specifically at the construction sector but would apply generally across all sectors. The developments are anticipated to open up arbitration as the preferred dispute resolution tool across the Middle East for all disputes. In Qatar, the New Qatari Law is likely to come into force in April and expected to introduce numerous positive changes and new concepts to the existing arbitration provisions.
As currently drafted, it unambiguously states that the decision to submit disputes to arbitration is solely that of the parties and the agreement to arbitrate may be documented in a separate stand-alone agreement or a clause contained in the contract. The New Qatari Law also suggests that the arbitration agreement could be evidenced through correspondence in paper or electronic form. This should put an end to any arguments that an arbitration clause in a contract is not sufficiently clear to satisfy the requirements of article of the Civil and Commercial Procedure Law and that an agreement for arbitration should be a separate signed agreement.
It may also eventually open up the possibility for parties to opt in, by agreement, to using arbitration as a method to resolve construction disputes where it was not envisaged when the contract was originally entered into. Where there is a valid arbitration agreement, the local courts are obligated not to accept jurisdiction over a dispute which the parties previously agreed should be resolved by arbitration. It is clear, however, that the New Qatari Law grants the court controlling power of the legitimacy and enforceability of such arbitration agreements but the courts are limited to this review because if the agreement is valid, the courts must honour it.
Nevertheless, if such a claim was raised before a national court, this would not stop the arbitration proceedings from being commenced or continued. Construed broadly, it may be interpreted to mean that an arbitration award may be prevented from being issued in a construction dispute where the nature of that dispute has already been tested by any UAE court of law. However, construed narrowly, it may only apply when dealing with the same cause of action between the same parties. The UAE has also recently amended article of the Criminal Code, rendering arbitrators potentially criminally liable for failing to act with integrity and impartiality.
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Parties can now hinder the proceedings by filing a criminal complaint against the arbitrator under article The criminal complaint will suspend the proceedings, and potentially raise issues of bias of the targeted arbitrator, even if the criminal complaint is unsuccessful. The new amendment has already had effects on the arbitration community, with practitioners reporting that arbitrators are withdrawing from ongoing arbitrations or refusing new appointments in UAE-seat arbitrations following implementation of the amendments.
It remains, however, to be seen how this provision will be interpreted by the courts. In any event, parties abusing this process could face charges for calumnious denouncement under UAE law.