RECENT TRENDS IN ARBITRATION IN THE UAE

Introduction

The United Arab Emirates is undergoing a significant transformation as it works to position itself as a premier global hub for trade and investment. Central to this ambition is the need for a robust, reliable, and predictable legal framework capable of handling commercial disputes effectively. Arbitration has emerged as a cornerstone of this framework, offering parties the neutrality, enforceability, and flexibility that cross-border business demands.

Over the past several years, a series of landmark legislative reforms and judicial decisions have reshaped the arbitration landscape considerably. The introduction of a modern Federal Arbitration Law based on the UNCITRAL Model Law, the development of advanced legal regimes within the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC), and an increasingly pro-arbitration stance from domestic courts all point to a fundamental shift in approach. These changes have addressed longstanding concerns around arbitrator powers, the efficiency of proceedings, and the finality of awards.

Since the Federal Arbitration Law (Law No. 6 of 2018) came into force, UAE courts have consistently issued rulings that support and reinforce the arbitration process. This trend has become especially evident through recent decisions of the UAE Court of Cassation, particularly in 2025.

The combination of the Federal Arbitration Law grounded in the UNCITRAL Model Law, the progressive regulatory environments of the ADGM and DIFC, and a judicial culture supportive of arbitration together signal a clear paradigm shift in how the UAE approaches commercial dispute resolution.

Key Recent Developments

1. Enforcement of Arbitration Agreements and Incorporation by Reference

Abu Dhabi Court of Cassation Decision No. 2025-980, issued on 16 October 2025, addressed several important issues. On the question of arbitration agreement enforcement, the Court reaffirmed the UAE courts' firm commitment to upholding valid arbitration clauses. Consistent with Article 7 of Federal Arbitration Law No. 6/2018, the Court confirmed that an arbitration agreement must be in writing but can be validly incorporated into a contract by reference. In this case, separate agreements stating that "all conditions of the main contract will remain unchanged" were held to have sufficiently incorporated the arbitration clause from the main contract.

2. Multi-Party Arbitration in Construction Disputes

This decision also broke new ground in how complex, multi-party construction disputes are handled. The Court confirmed that where a series of interrelated agreements and subcontracts flow from a master contract, all parties involved may be bound by the arbitration clause in that master contract. This prevents conflicting outcomes from arising when disputes are split between arbitral tribunals and state courts — a particularly significant outcome for the construction industry, where disputes often involve multiple tiers of contracts and parties.

3. Judicial Restraint in the Presence of a Valid Arbitration Clause

The Court also demonstrated a disciplined, arbitration-supportive procedural approach. It held that where a valid arbitration clause exists, a court is obliged to decline jurisdiction and must not go on to consider other procedural matters such as standing or the timing of claims. The Cassation Court found that the lower court had erred by addressing issues that fell outside its jurisdiction once the arbitration clause had been identified. This reinforces the court's proper role as a gatekeeper, directing parties to the appropriate dispute resolution forum rather than intervening in the substance of their dispute.

4. Validity of Arbitration Clauses Despite Non-Payment of Fees

In a notable departure from its earlier position, Dubai's Court of Cassation has held that an arbitration clause remains valid even where a case has been closed due to non-payment of advance fees — provided no award has yet been issued. This offers greater certainty to parties who may encounter administrative or financial difficulties during proceedings.

5. Arbitral Tribunals' Power to Grant Anti-Suit Injunctions

The Dubai Court of Cassation issued a significant ruling confirming that an arbitral tribunal seated in the UAE has the authority to issue anti-suit injunctions. This arose from an ICC arbitration seated in Dubai, in which the tribunal had ordered a respondent not to bring claims before other courts in relation to matters falling within the scope of the arbitration. The Dubai Court of Appeal had previously set aside the injunction, finding it incompatible with the right of access to courts and the Federal Arbitration Law. However, the Court of Cassation reversed that decision, restoring jurisdiction to the arbitral tribunal and affirming the validity of the anti-suit injunction.

6. Enforceability of Interim Awards

A March 2024 ruling by the DIFC Court of Appeal confirmed that both domestic and foreign interim awards are enforceable as final awards under the DIFC Arbitration Law, in a manner consistent with the New York Convention. This provides important clarity for parties seeking to enforce interim relief obtained through arbitration.

7. Signature Requirements for Arbitral Awards

There had previously been some uncertainty across the UAE regarding whether arbitral awards — whether issued in UAE-seated arbitrations or foreign awards being enforced in the UAE — needed to bear a signature on every page. The Ras Al Khaimah Court of Cassation took the view that page-by-page signatures were not required, a position subsequently adopted by the Abu Dhabi Court of Cassation. This alignment across jurisdictions brings much-needed consistency and signals a practical, enforcement-friendly approach that will be welcomed by both domestic and international practitioners.

8. Unilateral Arbitration Clauses Found Unenforceable

A dispute between a contractor and a subcontractor brought attention to the enforceability of unilateral arbitration clauses. The relevant contracts gave the contractor alone the right to choose between referring a dispute to the Dubai Chamber of Commerce arbitral tribunal or the UAE local courts. When the subcontractor filed proceedings before the Dubai Court of First Instance, the contractor argued that arbitration was the proper forum. The lower courts initially sided with the contractor, but the Court of Cassation ultimately found such unilateral clauses to be unenforceable. This ruling has broad implications, particularly in sectors such as banking, employment, and insurance, where such clauses are commonly used. Parties with similar provisions in their existing contracts would be well advised to review them in light of this decision.

9. Recoverability of Legal Costs in Arbitration

In February 2024, the Court of Cassation confirmed that a lower court could partially annul an ICC award to render the tribunal's costs order unenforceable. Then, in March 2025, the Dubai Court of Cassation appeared to bring further clarity to this issue. The Court held that where parties agree to resolve disputes under a specific set of arbitration rules — such as the ICC Rules — they are bound by those rules, unless a particular rule conflicts with public policy. In light of this evolving case law, it is advisable for parties to arbitrations seated in the UAE to expressly empower the tribunal to award costs, either within the arbitration agreement itself or through the tribunal's first procedural order or terms of reference.

Conclusion

The UAE has made deliberate and meaningful strides in building a legal environment that is firmly supportive of arbitration. Underpinned by a modernised Federal Arbitration Law and complemented by the sophisticated frameworks of the DIFC and ADGM, these efforts are further reinforced by a judiciary that has shown a clear and consistent willingness to uphold arbitration principles.

Through recent decisions, the courts have validated arbitration clauses, confirmed the enforceability of interim awards, recognised the jurisdiction of arbitral tribunals to issue anti-suit injunctions, and clarified procedural matters such as signature requirements — while also drawing appropriate boundaries, as seen in the treatment of unilateral arbitration clauses.

Taken together, these legislative, institutional, and judicial developments paint a coherent picture: the UAE is not merely open to international arbitration but is actively and thoughtfully positioning itself as a world-class venue for cross-border dispute resolution. For international businesses and legal professionals, the UAE now offers a neutral, efficient, and increasingly sophisticated arbitration environment, with a clear trajectory towards becoming one of the foremost global centres for commercial justice.