Arbitration is an alternate method to traditional litigation. It serves as an effective method for resolving disputes, issues, and problems. Arbitration offers a much faster approach to solve any kind of issue, matter or a dispute.Besides, it is considered to be highly flexible in comparison to the orthodox way of resolving legal problems. In this blog we will discuss about An Effective Arbitration Agreement is needed for any Business in the UAE.
Previously, people heavily relied upon litigation as a way to solve outstanding legal disputes and matters.Lawyers and Legal Consultants are the professionals for legal support but the advocate with legal expertise in Arbitration is called as Arbitrator. Of course Law Firms in Dubai also helping to hire the top Arbitrators. But Arbitrators are little different than Advocates. Advocates and Legal Consultants are the experts for Courts must be familiar with Arabic language while arbitrators are the law geniuses knowing English and Arbitration process only.
In recent times, arbitration has been a useful tool to resolve the legal predicaments.
Under arbitration, stakeholders can maintain confidentiality. It also allows for preserving the goodwill and reputation among the involved parties. Nevertheless, the key to unlocking the most benefits out of arbitration lies in having a well-drafted and legally binding arbitration agreement.
This article is dedicated to readers about the perks of arbitration over litigation. This essential guide also explains the aims of arbitration to guide businesses. It will further assist the businesses in formulating an effective arbitration agreement.
The arbitration agreement needs to comply with the UAE Federal Law. There is a full-fledged law in the UAE that is dedicated to the cause. It is named as “Arbitration Law’.
The understanding of an Arbitration Agreement is foremost. It is generally a simple contract or an agreement.
The arbitration Agreement will include specifications such as the scope of the dispute, the entire dispute covered, and the qualifications of arbitrators. It also narrates the rules, laws, and procedures that must be adhered too. It also contains the details about the binding nature of the eventual award.Furthermore, three different types of arbitration agreements are stated in detail below to guide the readers.
Firstly, a Pre-Dispute agreement is one where the parties can proactively agree to arbitrate. They can agree on the potential future disputes by creating a separate arbitration agreement. Besides, they can incorporate an arbitration clause into their main contract as well.Secondly, a Post-Dispute agreement is when a lawsuit has been filed in advance in the court.
The relevant parties can agree to arbitration afterward following the filing in the court. Thirdly, reference agreements occur when the Parties may craft an arbitration agreement by referring to another paper or document.
There are certain specifications that are required for the validity of an agreement. It is essential to follow them to declare the papers as legal and valid.Legal capacity matters the most. The agreement should be made by a natural person. Natural person is the one who is directly involved in the matter in any legal capacity to act or represent. The natural person is capable of representing a legal entity authorized to enter into arbitration agreements.
The subject matter of the agreement needs to involve significant issues and disputes that can be submitted. They are submitted with intent to conciliation. For instance, some matters, like criminal cases, personal status matters, or those conflicting with public policy, are often not subject to any kind of arbitration.
Oral arbitration has no standing and the same is highlighted in the Arbitration Law. The law clearly outlines some specific acceptable forms. This may include a document that is signed by the relevant parties.
Therefore, written communication is essential for exchanges, references, and much more. A court decision will confirm the arbitration agreement only if it is in written format.
The arbitration agreement is formed either before or after a dispute, issue or a matter arises in any potential. It requires a spate document within a contract. Some key elements must be part of it. Added, it is done to ensure a level of clarity and enforceability.
The scope of nature of disputes is clearly defined that requires arbitration. There is a proper usage of concise and precise language in the arbitration agreement. It is done to avoid ambiguity, chaos, or any sort of confusion. The dispute that needs arbitration is clearly defined.It also contains the number of arbitrators forming the arbitral tribunal.
If it is delegated to another party or third person it is called an arbitration institution.The rules and Procedures are explained in the agreement. It will vividly state the rules, laws, and processes that govern the procedure of arbitration.
This may include the details of language, seat, and applicable laws, rules of evidence, timeframes, limitations, interim measures, emergency of any arbitrators, and fee of the arbitration.
The concerned parties can agree on their own set of rules. Besides, they can also adopt the ones of a recognized arbitration institution.
