Is UAE Arbitration now restricted to local lawyers?
03 Dec 2017

Is UAE Arbitration now restricted to local lawyers?

03 Dec 2017
On 25 September 2017, His Excellency Sultan bin Saeed Al Badi, Minister of justice issued a new bylaw (by virtue of decision no. 972/2017) that replaces the current bylaw (which was issued by virtue of decision no. 591/1997) of Law no. 23/1991 relating to the governance of legal profession.

Article 2 of the new bylaw states:
Without prejudice to Article 20 of the Law, no person may practice legal profession unless his/her name is listed in the list of lawyers in good standing. Furthermore, the Courts, Arbitration Tribunals, and the Judicial & Administrative Committees are prohibited from accepting the POA of any person who is not registered as a good standing practicing lawyer.
No Power of Attorney shall be issued including any activity that is restricted to lawyers, or attending or pleading or performing any judicial action before any of the bodies noted in the first paragraph of this Article except for the practicing lawyers in good standing …
Because only Emiratis (with few exceptions) are on the list of lawyers in good standing, on its face, this new bylaw means that any arbitration held in the UAE requires the involvement of an Emirati lawyer registered as an Advocate to represent the Clients.
If interpreted on this basis, international law firms representing clients in UAE arbitrations without Emirati co-counsel would now be required to appoint local lawyers to attend the arbitration proceedings just as they would in matters before the local Courts.
 
The above noted bylaw came into effect on 26 September 2017. Potentially this jeopardizes any legal proceedings that took place on or after this date which did not include a local attorney representing the Client before the tribunal. While currently untested, it would enable arbitration awards to be voided and the matter to be heard afresh before the Courts.
 
Unsurprisingly, this bylaw has been the subject of great debate within the UAE’s wider legal profession. We have seen well-reasoned opinion that even if applicable, the bylaw only applies to federal proceedings. Others have suggested that it is part of an Emiratization initiative. There was no prior consultation on the bylaw, meaning that for now, all views are speculative.
 
Others have suggested that the bylaw restricts the ability of barristers and other external advocates to appear in arbitrations. We disagree with that view. We take the view that while there is uncertainty regarding arbitrations with no UAE counsel involved, if an Emirati firm is instructed, there is nothing to prevent barristers appearing in the matter together with Emirati counsel in same way as, there is nothing to prevent international firms remaining involved.
 
Most jurisdictions restrict who may appear before their courts, and while equally, most do not overtly restrict appearances before tribunals, the UAE would not be alone if it did so. There are questions over a foreign lawyer’s ability to appear before Indian tribunals for example. Equally, other countries impose more subtle restrictions; note the difficulty of getting a business visa to the UK, compared to one for the UAE, if you are a non-EU (and non-US) citizen, for example.
 
While this firm, being Emirati-led, stands to benefit from the law in the short term, our view is that parties should be free to choose whomever they wish to represent them in arbitration. However, we encourage any initiative which allows Emiratis to be involved and gain experience in international dispute resolution.
Whatever view you might hold, it is clear we face a period of uncertainty until the position is clarified. Clients without local representation face three choices:
 
  1. Agree with analysis that the law is inapplicable – and that the courts in the jurisdiction(s) of enforcement will agree with that analysis;
  2. Seek to move the seat of their arbitrations elsewhere; or
  3. Appoint a UAE firm to act as co-counsel.

UPDATE

Since this article was written, the DLAD has issued a clarification (see below for more detail) and so this issue has largely blown over for Dubai arbitrations.  In other emirates, the situation may be different.

On 7 December 2017, the DLAD issued a letter addressed to the DIFC Arbitration Institute regarding the above debate.  The letter refers to Dubai Executive Council Resolution No. 22 of 2011 on the fees and fines relating to the practice of law and legal consultancy, which gives the power to the DLAD to regulate the legal consultancy profession in Dubai.  By virtue of this power, the DLAD confirmed that all lawyers who are licensed in Dubai, including foreign lawyers registered as legal consultants with the DLAD, may appear before any arbitral tribunal in Dubai.  The letter also stated that legal consultants visiting the Emirate of Dubai from elsewhere may represent parties before an arbitral tribunal in Dubai.

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