ICC opens a representative office for the MENA region

The International Court of Arbitration of the International Chamber of Commerce (ICC) is to open a representative office for the MENA region. The new office will be established in the Abu Dhabi Global Market (ADGM) in Abu Dhabi, United Arab Emirates (UAE). The opening ceremony took place on 13 September 2017 at an event attended by numerous delegates, including the ICC Court President, Alexis Mourre, and the chairman of ADGM, H.E. Ahmed Al Sayegh. Disputes Partner, Dyfan Owen, also attended and comments on the practical implications of the new representative office.

What is the ADGM?

The ADGM is an international financial centre located on Al Maryah Island, a free zone within the Emirate of Abu Dhabi. Similar to the Dubai International Financial Centre (DIFC), it has its own civil and commercial law and independent courts modelled on the English judicial system.

The ADGM has also enacted specific regulations governing the arbitration of disputes in the ADGM (the Arbitration Regulations 2015). The Arbitration Regulations are modelled on the UNCITRAL Model Law and apply to arbitrations seated in the ADGM. The Arbitration Regulations provide for the ADGM courts to be the supervisory courts for any ADGM seated arbitration. 

The ADGM has announced the opening of the ADGM Arbitration Centre which will be equipped with state-of-the-art technology and hearing facilities. It will be available to all parties seeking to resolve disputes through arbitration or mediation. The centre will also provide training in dispute resolution services. The centre is expected to be fully operational by early 2018.

What services will the ICC representative office provide?

The opening of the new representative office, which is expected to be staffed from early 2018, is the latest in a series of measures undertaken by the ICC to expand operations worldwide. These include the opening of a representative office in Brazil, announced in May 2017, and the establishment of a case management office in Singapore, announced in June 2017.

The new representative office will be able to accept the registration of arbitration cases under the ICC Rules, which will then be administered by one of the ICC Court Secretariat’s existing case management teams. The office will also be able to answer any questions or address any concerns relating to ICC arbitrations and will also take a lead role in organising ICC events and training in the region. It is expected that the annual ICC MENA Conference on International Arbitration, currently held in Dubai, will take place in the ADGM once every three years (it will continue in Dubai in other years). 

As confirmed at the opening ceremony by the ICC's EMEA Regional Director, Sami Houerbi, the ICC hopes that the ADGM office will grow and ultimately host a team to case manage ICC arbitration cases in the MENA region.

The significance of the announcement

The announcement of the ICC representative office, together with the announcement of the ADGM Arbitration Centre, further enhances the dispute resolution offering to parties in the Middle East and  the UAE's reputation as the preferred venue for arbitrations seated in the region. 

The opening of the representative office also demonstrates the importance that the ICC places on the MENA region as a market for its services. Mr Mourre reported at the opening ceremony that the ICC has seen significant growth in arbitration in the MENA region and expects this growth to continue. In 2014 there were 190 ICC arbitrations in the MENA region and 310 ICC arbitrations in 2016. In 2016, 56 parties from the UAE were involved in cases filed with the ICC Court. This is consistent with our experience of the ICC being the most commonly used arbitral institution in Middle Eastern contracts.

In respect of the ADGM, this development and its engagement with the ICC, underscores its commitment to a strong global presence in dispute resolution. The ADGM does not have a dedicated arbitral institution. It is important that those drafting arbitration clauses are aware that the ADGM Arbitration Centre is an arbitration hearing facility, not an arbitral institution which administers arbitrations. If parties are considering arbitration seated in the ADGM, but would prefer institutional rather than ad-hoc arbitration, they will need to specifically provide for the rules of an arbitral institution, such as the ICC, to apply. The announcement by the ICC that it is opening a representative office is therefore timely, as the benefit of on the ground support is likely to make the ICC an attractive option for parties considering arbitration in the ADGM. 

Concerns remain regarding enforcement of awards

The ADGM now has a progressive and modern arbitration law and, by setting up an Arbitration Centre and attracting a major global arbitration institution like the ICC to establish a regional presence there, it is increasingly attractive as a venue for arbitration in the region.

However, the enforcement of any ADGM arbitral awards within the UAE is untested. 

Some signatories to the New York Convention, including the United Kingdom and the United States, have adopted the "reciprocity reservation" which means they will only apply the New York Convention to awards made in the territory of another Contracting State. The ADGM is part of the UAE for the purpose of the New York Convention and therefore an award from an ADGM seated arbitration should be treated as an award made in a Contracting State when enforcement is sought outside the UAE.

However, the New York Convention does not apply to enforcement of domestic awards and currently there are no specific protocols in place for the enforcement of an ADGM arbitration award outside the ADGM but within the UAE. In theory, an ADGM arbitration award should be enforceable in "onshore" Abu Dhabi once it has been recognised by the ADGM courts. However, in practice, this remains to be tested.

It is hoped that the UAE's long awaited dedicated arbitration law will be introduced early next year and will provide greater certainty in respect of enforcement of arbitration awards within the UAE. That would further bolster the position of the UAE as a regional and global hub for dispute resolution and provide some reassurance in respect of the enforcement of awards.

Dyfan Owen, James Macdonald and Faisal Baassiri