At the outset, it may be useful to note that the laws applied in each of the onshore jurisdictions outlined above, i.e. Abu Dhabi and Dubai, the Dubai International Financial Centre ("DIFC") and the Abu Dhabi Global Markets ("ADGM") are largely based on the UNICITRAL Model Law, aligning the UAE's arbitral framework with international standards, and making the UAE (including the financial free zones named above) an arbitration-friendly legal landscape.
When selecting an arbitration seat, the contracting parties are essentially submitting to arbitrate within one of these three jurisdictions. This choice directly impacts the courts that will oversee with curial and supervisory jurisdiction of the arbitration process and the procedural laws governing it, and it can influence various procedural aspects of an arbitration, including rights of appeal, availability of interim remedies, and grounds for challenging an award.
In order to facilitate the drafting of the arbitration clause, provided below is a table setting out key considerations in respect of onshore (Abu Dhabi and Dubai) seated arbitrations and offshore (DIFC and ADGM) seated arbitrations. The below table does not constitute an exhaustive comparison of the three jurisdictions, however, it can be a useful tool in determining an arbitration seat.
| Consideration | Onshore seated arbitration (Abu Dhabi / Dubai) | DIFC | ADGM |
| Applicable procedural law | UAE Federal Law No. 6/2018 on Arbitration as amended by Federal Decree-Law No. 15/2023. | DIFC Arbitration Law No. 1 of 2008 amended by DIFC Amendment Law No. 1 of 2013. | ADGM Arbitration Regulations 2015 amended by Amendment No. 1 of 2020. |
| Interim remedies | Under the UAE Arbitration Law, parties to onshore arbitration
can approach the arbitral tribunal to request interim remedies and
if granted, such interim measures can be enforced by the
courts. Unlike offshore proceedings, in onshore seated arbitrations: the concept of injunctions which are pursued to prevent or compel parties to act is very limited. This includes anti-suit injunctions; and the tribunal may decide to impose interim remedies on its own initiative without the request of the parties. It is worth noting that it is not uncommon for the arbitral tribunal to defer issuing its decision on interim remedies until the tribunal is ready to issue its decision on the award. Accordingly, this may defeat the purpose of requesting remedies intended to address urgent concerns. |
Under the DIFC Arbitration Law, the parties may approach the
arbitral tribunal to request an interim remedy, which is to be
enforced by the DIFC Courts, or alternatively seek assistance from
the DIFC Courts directly which has the same powers available as the
arbitral tribunal, irrespective of the seat of arbitration. Under Article 15(4) of Dubai Law No 2 of 2025, the DIFC Courts have jurisdiction to determine interim and precautionary measures related to applications, claims or current or future arbitral proceedings brought outside the DIFC seeking suitable precautionary measures within the DIFC. Although the list of available interim remedies that may be sought by parties to a dispute is broader than those available in onshore seated arbitrations (and includes, e.g., injunctions to prevent or compel a party to act or refrain from acting, including anti-suit injunctions), the DIFC Arbitration Law does not grant the arbitral tribunal power to order interim remedies on its own initiative, which leads to the conclusion that it cannot issue interim measures of its own motion. However, the arbitral tribunal may modify, suspend or terminate an interim measure it has granted following an application by any party, or in exceptional circumstances of its own initiative. Relative to onshore proceedings, the arbitral tribunal in a DIFC seated arbitration typically does not defer its decision on a request for an interim remedy, which can be advantageous given the urgent circumstances in which these remedies are typically requested. |
The parties may also approach the arbitral tribunal to request
an interim remedy, which is to be enforced by the ADGM Courts.
Similarly to the DIFC Courts, the ADGM Courts has the same powers
available to the arbitral tribunal to grant interim measures
irrespective of the seat of arbitration. Similarly to the DIFC, the available interim remedies that may be sought is broader than in onshore seated proceedings. The ADGM Arbitration Law does not grant the arbitral tribunal power to order interim remedies on its own initiative, however, upon the request of a party or at the tribunal's own initiative in exceptional circumstances, the tribunal may modify, suspend or terminate a granted interim measure. |
| Ratification and enforcement | Article 55 of the UAE Arbitration Law sets out a fast-track
approach concerning the recognition and enforcement of arbitral
awards in the UAE, where an ex-parte petition is made by
the successful party to the Chief Justice of the president of the
court. The petition must be decided upon within 60 days of the date of the filing of the petition, unless an action to set aside the award has been filed. Should the local or federal courts accept the application, the award can be enforced across the UAE (including offshore zones). |
To enforce an arbitral award in the DIFC, the successful party
must file an application with the DIFC Courts under Article 42(1)
of the DIFC Arbitration Law. This application can be made either
with or without prior notice to the opposing party. Unlike onshore seated arbitrations, there is no time limit specified in the DIFC Arbitration Law for the court to decide on an application to recognise and enforce an arbitral award. The DIFC Court's Enforcement Judge has jurisdiction under Article 31(3) of Dubai Law No 2 of 2025 to enforce Arbitral Awards ratified by the DIFC Courts where enforcement relates to any of the DIFC Bodies, DIFC Establishments, Licensed DIFC Establishments, or ay other entity within the DIFC. If the DIFC Court accepts the successful party's application, it will issue an order granting the recognition and enforcement of the award. Subsequently, the award creditor is required to serve the DIFC Court order on the award debtor. The award can then be enforced outside the DIFC, and a party will have to comply with the relevant service rules in this regard. |
Similar to the DIFC Arbitration Law, the ADGM Arbitration Law
requires a party to apply for the recognition and enforcement of an
award to the ADGM Court. Unlike onshore seated arbitrations, there is no time limit specified in the ADGM Arbitration Law for the court to decide on an application to recognise and enforce an arbitral award. Should the ADGM Court accept the application, the award can be enforced outside the ADGM. |
| When selecting an arbitration seat, the duration and complexity of the process of securing a court order for the recognition and enforcement of an award across all three jurisdictions (onshore, DIFC, and ADGM) are generally similar. However, a determining factor could be the level of court intervention in nullifying or setting aside an award. Below are some crucial factors to consider when deciding on an arbitration seat. | |||
| Grounds for challenging an award | UAE courts may apply Article 55(2) of the UAE Arbitration Law
and annul an arbitral award for any reasons specified in Article
53(1) of the UAE Arbitration Law which include: the absence of an arbitration agreement, or the arbitration agreement is void, or terminated due to the expiry of its term in accordance with the law which the parties have agreed the arbitration agreement is subject to or in accordance with the UAE Arbitration Law if there is no reference to a specific law;one of the parties, at the time of enforcement thereof, lacks capacity or is of diminished capacity in accordance with the law which governs its capacity;one of the parties lacked the legal capacity to take any action regarding the right, the subject matter of dispute, in accordance with the law governing his capacity;one of the parties to the arbitration is unable to present its case as a result of not being given proper notice of the appointment of an arbitrator or of the arbitral proceedings, the arbitral tribunal's violation of the litigation principles or for any other reason beyond its control;if the arbitral award fails to apply the law agreed upon by the parties to govern the subject matter of the dispute;if the composition of the arbitral tribunal or the appointment of one of the arbitrators is in conflict with the provisions of the UAE Arbitration Law or the agreement of the parties;if the arbitral proceedings are invalid to the effect that impairs the award; or if the award is rendered after the due time limit; orif the arbitral award deals with matters not falling within the scope of the arbitration agreement or exceeding the limits of this agreement. Nevertheless, when matters falling within the scope of the arbitration can be separated from the parts of the award which contains matters not included within the scope of the arbitration, the nullity affects exclusively the latter parts only. An application to annul an arbitral award must be made by a party within 30 days from the date of notification of the award or during the proceedings relating to the recognition and enforcement of an award initiated by the successful party. Under Article 53(2), the court may also annul the award, on its own initiative if it finds that: the subject matter of the dispute is a matter in which arbitration may not be held; orthe arbitral award contradicts the public order and morality in the UAE. In comparison to offshore proceedings, onshore proceedings provides broader grounds for challenging an award. These broader grounds can be an advantage or a disadvantage depending on whether your client is the successful or unsuccessful party to the arbitration. |
Pursuant to Article 44 of the DIFC Arbitration Law, the DIFC
Court may refuse to recognise or enforce an arbitral award only at
the request of the party against whom it is invoked, if that party
furnishes to DIFC Court proof that: a party to the arbitration agreement was under some incapacity; the arbitration agreement is not valid under the law to which the party subjected it to or in the absence of any indication thereon, under the law of the state or jurisdiction where the award was made; the party against whom the award was invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or in the absence of such agreement, was not in accordance with the law of the state or jurisdiction where the arbitration took place; the award has not yet become binding on the parties or has been set aside or suspended by a court of the state or jurisdiction in which, or under the law of which, that award was made; The DIFC Court can at its own discretion annul an arbitral award if: the DIFC Court finds that the subject matter of the dispute would not have been capable of settlement by arbitration under DIFC Law; orthe enforcement of the award would be contrary to the public policy of the UAE. An unsuccessful party to a DIFC or ADGM seated arbitration may seek to set aside the award but no later than three months after they have been notified of the award, unless the rules they have agreed upon prescribes a different timeframe, or unless agreed otherwise by the parties. |
Pursuant to section 57 of the ADGM Arbitration Regulations (or
section 53 of the ADGM Arbitration Regulations in respect of
arbitral awards made in arbitration which has its seat in the
ADGM), the ADGM Court may refuse to recognise or enforce an
arbitral award, irrespective of the state or jurisdiction in which
it was made, only if: the party making the application furnishes to ADGM Court proof that:a party to the arbitration agreement was, under the law applicable to it, under some incapacity; the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced;the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, or failing such agreement, was not in accordance with the law of the country where the arbitration took place; the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made; The ADGM Court can its own discretion set aside an arbitral award if it finds that: the subject-matter of the difference is not capable of settlement by arbitration under ADGM Law; orthe recognition or enforcement of the award would be contrary to the public policy of the UAE. An unsuccessful party to a DIFC or ADGM seated arbitration may seek to set aside the award but no later than three months after they have been notified of the award, unless the rules they have agreed upon prescribes a different timeframe, or unless agreed otherwise by the parties. |
| Costs | In onshore seated arbitrations, the UAE Arbitration Law allows
the arbitral tribunal to determine and award arbitration costs to
the parties, this includes arbitrators' fees, experts' fees
and administrative expenses. However, the UAE Arbitration Law is
silent on the issue of recoverability of legal fees. Thus, to circumvent losing the right to recover legal costs, it is recommended that the parties agree on clear provisions granting the arbitral tribunal the power to award legal fees either in the arbitration clause or terms of reference or by choosing arbitration rules that allow the tribunal to award the parties legal fees. Determining the cost of arbitration proceedings is dependent on the rules of the arbitral institution which governs the proceedings, or the arbitral tribunal once formed, in case of ad-hoc arbitrations. |
The position on arbitration costs including legal
fees differs in offshore seated arbitrations, where both the DIFC
Arbitration Law and the ADGM Arbitration Law empowers the tribunal
to determine and award a party some or all its arbitration costs
including legal fees as long as these fees and costs are claimed
during the arbitration proceedings and are reasonable. Determining the cost of arbitration proceedings is also dependent on the rules of the arbitral institution which governs the proceedings, or the arbitral tribunal once formed, in case of ad-hoc arbitrations. |
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| Confidentiality | The UAE Arbitration Law dictates that the arbitral proceedings
will be held privately, but it does not necessarily impose
confidentiality of the proceedings, unless the parties agree
otherwise. However, the UAE Arbitration Law stipulates that an
arbitral award must be treated with confidentiality. Thus, it can be safely deduced that confidentiality of the proceedings is also preserved. |
All information relating to the arbitral proceedings shall be
kept confidential, except where disclosure is required by an order
of the DIFC Court. Any DIFC Court related arbitration proceedings will take place in the Arbitration Division, which is confidential, not public and the names of the parties are anonymised. |
The general position is that no party may publish, disclose or
communicate any confidential information to any third party. However, confidential information may be disclosed if the tribunal determines that disclosure is in the interests of the public. |
| Principles of privilege and without prejudice | The concepts of legal privilege and without prejudice communication are not recognised without specific written agreement of the parties save as attorney-client privilege.However, there has been a recent precedent issued by the Dubai Court of Cassation case number 486/2024, in which the Court ruled that settlement negotiations that did not materialise into a settlement cannot be used as evidence of admission. | As the DIFC and ADGM adopt general common law principles, the concepts of legal privilege and without prejudice communication will apply. | |
| Time | If the parties do not agree on a specific time limit, Article
42 of the UAE Arbitration Law provides for a six-month period to
issue the final award starting from the date of the first hearing.
This period may be extended for an additional six months unless the
parties agree otherwise. If the final award is not issued within
the time permitted, the tribunal or a party to the arbitration may
request the court to terminate the arbitration or decide on an
additional period of time required for rendering a final
award. It is important to note that not rendering the arbitration within the specified time limit can be invoked by a party as a reason to set aside an award. The parties must be mindful of the time limits stipulated in the rules of the arbitration institution they have agreed upon. |
Neither the DIFC nor ADGM arbitration laws provide
for a specific time limit for an award to be rendered. Instead, the parties should consider the time limits stipulated in the rules of the institution they have agreed upon. |
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Choosing a seat does not mean choosing an arbitration institution. Accordingly, when drafting an arbitration clause there are other aspects to consider that are as important as the seat, which are the choice of the institution that will administer the arbitration, number of arbitrators, rules of evidence that will apply, governing law of the contract, recoverability of legal costs as well as the language of the arbitration. Parties are not mandated to select an institution to conduct arbitration, and may instead opt for ad-hoc arbitration, which essentially allows the parties to adopt their own rules. However, should the parties opt for institutional arbitration, it is crucial to assess whether the particular institution's rules are suitable to the circumstances and nature of the dispute, in addition to the institution's reputation, efficiency and expertise.
To conclude, whilst the UAE, DIFC and ADGM Arbitration Laws are all based on the UNCITRAL Model Law, which aligns onshore and offshore arbitration proceedings in the UAE with international standards, ultimately, the choice of whether to proceed onshore or offshore will be largely dependent on the personal circumstances of the parties and the nature and complexity of the dispute.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
