Major win by Habib Al Mulla and Partners: setting a ground-breaking precedent for Arbitration users
October 31, 2023
Habib Al Mulla and Partners secured a major win for a Client in a ground-breaking matter before the General Authority of the Court of Cassation. The team at Habib Al Mulla and Partners was led by Dr. Ezzat Hossin Gharep.
The landmark decision of the General Authority of the Court of Cassation in Decision No. 10 of 2023 issued on 24 October 2023 sets a crucial precedent for arbitration users and showcases UAE’s continued efforts to establish itself as an arbitration friendly jurisdiction.
The Court unambiguously held that non-payment of advance of costs in arbitration will not lead to an automatic revocation of the right of parties to resolve the dispute through arbitration.
Prior to this decision, failure by parties to adhere to their obligation of payment of advance on costs meant an automatic dismissal of their registered arbitration case, stripping them of their rights to resort to arbitration in the future, notwithstanding the existence of the procedural right to bring about such a claim before the arbitral tribunal. This left parties with no choice but to resort to courts for adjudication of their dispute, despite the substantive claim satisfying the condition of the limitation period and the existence of a valid arbitration clause.
The Cassation’s decision is a significant not only in preserving party autonomy, but also upholding the competence of the arbitral tribunal to exercise jurisdiction over disputes with an arbitration clause.
The authors would like to thank Mr. Omar Mansour for his valuable assistance.