September 28 2017
ADGM Arbitration Centre and ICC representative office
Four years after being formed and two years after opening, the Abu Dhabi Global Market (ADGM) has announced the establishment of the ADGM Arbitration Centre on Al Maryah Island, Abu Dhabi, which will include the Middle East and North Africa (MENA) representative office of the International Chamber of Commerce (ICC) International Court of Arbitration. The centre is forecast to be fully operational by January 2018.
The ADGM was established in February 2013 and opened in October 2015. It is a financial free zone for local, regional and international institutions, consisting of three authorities:
These authorities operate independently of the UAE financial, administrative and legal system(1) with the aim of creating an attractive business environment for investments, and therefore developing the Abu Dhabi economy.(2) The ADGM legal system is based on common law and directly applies English law, subject to some ADGM-specific legislative amendments.
Over the past two years, the ADGM has taken steps to place itself onto the arbitration map, starting with the 2015 enactment of its Arbitration Regulations.(3) The regulations are based on the United Nations Commission on International Trade Law Model Law with the 2006 amendments, but contain a number of modifications and enhancements to reflect international arbitration best practice and address areas that the Model Law does not.(4)
In 2016 the ADGM focused on the question of enforcement of its judgments and arbitral awards. On May 15 2016 the ADGM courts signed a memorandum of understanding with the UAE Ministry of Justice in order to strengthen judicial cooperation between the ADGM courts and the onshore courts of the United Arab Emirates.(5) The memorandum provided for judicial cooperation with respect to the onshore UAE enforcement of judgments and arbitral awards rendered in the ADGM. It also suggested that further legislation, protocols and guidelines would be implemented for the requirements of reciprocal recognition and enforcement.(6)
Against this background the ADGM Arbitration Centre was launched, which was the next welcome step taken by the ADGM to establish itself as a credible seat of arbitration.
On July 26 2017 the ADGM announced the establishment of the ADGM Arbitration Centre located on Al Maryah Island, Abu Dhabi. The centre is not an arbitral institution but a state-of-the-art hearing venue to be used by parties seeking to have their arbitration hearings in a purpose-built facility, irrespective of whether their arbitration is seated in the ADGM or elsewhere, or is taking place under the auspices of the ICC Court.
The ADGM Arbitration Centre will house the ICC's MENA representative office, which will have on-site staff available to accept the registration of cases under the ICC Arbitration Rules. The cases will then be administered by existing case management teams within the ICC Court's network. The ICC's MENA representative office will be one of only three ICC representative offices worldwide (joining Sao Paulo and Shanghai) – its choice of the ADGM is a clear recognition of the importance of the Middle East to the international arbitration landscape.
The ICC's reputation as one of the world's leading arbitral institutions will likely boost the confidence of potential users in the ADGM arbitration system and could lead to the ICC rules becoming the default arbitral rules selected by parties which designate the ADGM as the seat of their arbitration. In March 2017 the ICC launched its new and revised arbitration rules, which seek to establish and reflect international arbitral best practice.
The most significant change to the ICC Arbitration Rules is the introduction of an expedited procedure.(7) The procedure is available where the arbitration agreement was concluded on or after March 1 2017. It will apply automatically unless otherwise agreed by the parties where the disputed amount falls below $2 million, and is available on an opt-in basis for higher-value disputes. The key features of the expedited procedure are as follows:
Other key amendments include the following:
The launch of the ADGM Arbitration Centre and the ICC's decision to establish a MENA representative office within the ADGM mark an important development for arbitration in the region and provide users of arbitration in the Middle East with greater choice. However, while drafting arbitration agreements, parties must remember that the ADGM Arbitration Centre is not an arbitral institution (nor is it the ADGM-ICC Arbitration Centre). Therefore, those wishing to have their arbitration seated in the ADGM under the auspices of the ICC must ensure that they make a clear designation of the seat of the arbitration as the ADGM and the rules governing the arbitral procedure as the ICC Arbitration Rules.
For further information on this topic please contact Sami Tannous or Samantha Lord Hill at Freshfields Bruckhaus Deringer LLP by telephone (+971 4 5099 100) or email (firstname.lastname@example.org or email@example.com). The Freshfields Bruckhaus Deringer LLP website can be accessed at www.freshfields.com.
(4) For more information on the ADGM Arbitration Regulations, please see "Arbitration in Abu Dhabi Global Market – another common law jurisdiction in the Middle East".
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Samantha Lord Hill