DIAC Arbitration Fees: What Parties Should Expect in the UAE

DIAC arbitration costs are set by the DIAC Rules 2022, which prescribe registration, administration and arbitrator fees based on the amount in dispute. They apply to UAE-seated arbitrations unless parties choose DIFC or ADGM. They bind the parties from the moment they agree to DIAC arbitration and remain in force throughout the proceedings.

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WHAT ARE THE MAIN COMPONENTS OF DIAC ARBITRATION FEES?

The fee structure under the DIAC Rules 2022 comprises three core elements: a non-refundable registration fee, an administration fee that scales with the monetary value of the claim, and arbitrator fees that are calculated on an hourly basis with a daily minimum for hearing sessions. Article 21 of the DIAC Rules 2022 expressly defines these components and makes them applicable to every arbitration administered by the Dubai International Arbitration Centre.

The registration fee is paid when the Request for Arbitration is filed and covers the Centre's initial processing, including docket creation, case management setup, and preliminary correspondence. It is a fixed amount that does not vary with the claim size or the number of parties.

The administration fee is a percentage of the sum claimed-or, if a counter-claim is filed, the aggregate amount of the claim and counter-claim. This percentage follows a sliding scale designed to reflect the workload of the DIAC Secretariat: larger claims attract a lower percentage rate, while smaller claims incur a higher percentage, thereby balancing the Centre's fixed overhead with the proportional effort required.

Arbitrator fees are determined by the DIAC Schedule of Fees, which assigns an hourly rate to each arbitrator based on seniority, expertise, and the complexity of the dispute. For a sole arbitrator, the fee is simply the hourly rate multiplied by the number of hours worked; for a three-member tribunal, the combined hourly rates of all arbitrators apply. In addition, the Schedule imposes a daily minimum fee for each hearing day to provide compensation for preparation and attendance even if the actual hearing time is shorter than a full day.

Beyond these Centre-set charges, parties may incur ancillary expenses such as expert witness fees, translation costs, venue hire for hearings held outside DIAC premises, and legal representation fees. While these are not part of the DIAC fee schedule, they are routinely considered by the tribunal when deciding on costs under Article 34 of the DIAC Rules 2022.

HOW ARE ARBITRATOR FEES DETERMINED UNDER DIAC RULES?

Arbitrator fees follow the DIAC Schedule of Fees, which is annexed to the DIAC Rules 2022 and updated periodically to reflect market rates for arbitral services. The Schedule sets out:

• Hourly rates for sole arbitrators and for each member of a panel, differentiated by the arbitrator's experience level (junior, mid-level, senior).
• Daily minimum fees that apply to each scheduled hearing day, ensuring that arbitrators receive compensation for preparatory work, travel, and attendance regardless of the actual hours logged.
• Expense reimbursements for reasonable travel, accommodation, and subsistence, which are billed separately but must be pre-approved by the DIAC Secretariat.

When the tribunal is constituted, the DIAC Secretariat prepares a provisional cost estimate. This estimate multiplies the applicable hourly rate(s) by the anticipated number of hearing days (including a buffer for deliberation time) and adds the daily minimum where relevant. After the hearings conclude, arbitrators submit detailed time sheets to the Secretariat; the final fee is then adjusted to reflect the actual hours worked, subject to the daily minimum floor.

Parties may, under Article 23, negotiate a fixed fee arrangement with the tribunal before hearings begin, provided the agreed rate does not fall below the Schedule's minimum hourly rate. Any such agreement must be recorded with the DIAC Secretariat to ensure enforceability.

WHAT FACTORS CAN INCREASE OR DECREASE THE TOTAL COST?

Several variables influence the overall expense of a DIAC arbitration:

1. Claim value - Because the administration fee is a percentage of the claim, a higher monetary dispute raises this component, although the percentage rate declines at higher brackets.
2. Number of arbitrators - A sole arbitrator reduces arbitrator fees compared with a three-member panel, but may affect the perceived legitimacy of the award in complex, high-stakes matters.
3. Hearing length - More hearing days increase both the daily minimum fees and the hourly-rate component. Efficient case management, narrow issue framing, and agreed procedural timetables can curtail this.
4. Procedural complexity - Multiple rounds of pleadings, extensive document production, or the need for foreign-law experts generate additional work for both the DIAC Secretariat and the tribunal, inflating administration and arbitrator fees.
5. Ancillary services - Expert witness fees, translation, and venue hire are outside the DIAC schedule but are often substantial; limiting their scope or agreeing on cost-sharing can mitigate impact.
6. Rate updates - DIAC reviews its Schedule of Fees annually; any upward adjustment directly affects the final bill for ongoing arbitrations.

Parties can actively manage costs by:

• Limiting the scope of the dispute to essential issues, thereby reducing pleading rounds and document production.
• Agreeing on procedural timetables under Article 25, which encourages expeditious proceedings and discourages unnecessary delays.
• Selecting a sole arbitrator when the dispute's technical nature does not warrant a panel, while still ensuring the arbitrator possesses the requisite expertise.
• Utilising DIAC's hearing facilities at no extra charge, reserving external venues only when strictly necessary.
• Requesting fee deferrals or reductions under Article 26 if genuine financial hardship is demonstrated, subject to the Centre's discretion.

ARE THERE ANY ADDITIONAL EXPENSES PARTIES SHOULD ANTICIPATE?

Beyond the DIAC-set fees, parties routinely bear:

• Legal representation costs - Fees for counsel vary with the lawyer's seniority, the jurisdiction's complexity, and the amount of work required (drafting, advocacy, settlement negotiations).
• Expert witness fees - Specialists in fields such as construction, finance, or intellectual property charge hourly or daily rates; their fees depend on the volume of testimony, report preparation, and any required site visits.
• Translation expenses - When submissions, evidence, or expert reports are in languages other than Arabic or English (the Centre's official languages), certified translation is necessary and is billed per word or per page.
• Venue hire - If the parties opt for a hearing location outside DIAC's premises (e.g., a hotel conference room or a neutral third-party facility), rental, audiovisual equipment, and ancillary services become chargeable. DIAC provides its hearing rooms free of charge to administered cases.
• Administrative charges for late payment - Although interest on overdue fees is not prescribed in the DIAC Rules 2022, the Centre applies a standard 1 % per month administrative charge on outstanding amounts, as outlined in its payment instructions.

Under Article 34, the arbitral tribunal may award costs to the prevailing party, encompassing legal fees, expert charges, translation, and venue expenses, subject to the tribunal's discretion and any prior cost-sharing agreement. Consequently, parties should maintain detailed records of all disbursements to facilitate recovery if the award permits.

FREQUENTLY ASKED QUESTIONS

What is the minimum registration fee for a DIAC arbitration?

The DIAC Rules 2022 prescribe a fixed registration fee of AED 5,000 for filing a Request for Arbitration, payable upon submission of the claim. This fee covers the Centre's initial administrative processing and is non-refundable irrespective of the arbitration's outcome.

How does the claim amount affect the administration fee?

The administration fee is calculated as a percentage of the sum claimed (or the combined claim and counter-claim) according to the sliding scale in Article 22 of the DIAC Rules 2022:

• Up to AED 1,000,000 - 0.5 %
• AED 1,000,001 - AED 5,000,000 - 0.4 %
• Above AED 5,000,000 - 0.3 %

This structure ensures that the administration fee grows in absolute terms with larger claims while the percentage rate diminishes, reflecting economies of scale in case management.

Can parties agree to fix arbitrator fees in advance?

Yes. Article 23 permits the parties to negotiate a fee arrangement with the arbitral tribunal before hearings commence, provided the agreed hourly rate does not fall below the minimum rates stipulated in the DIAC Schedule of Fees. The agreement must be submitted to the DIAC Secretariat for recording and becomes binding on the tribunal.

Are there any exemptions for small-and-medium enterprises?

The DIAC Rules 2022 do not contain automatic fee waivers or reductions for SMEs. However, Article 26 allows the Centre to consider a fee reduction or deferral on a case-by-case basis when a party demonstrates genuine financial hardship. The request must be accompanied by supporting documentation such as audited financial statements, cash-flow forecasts, or evidence of insolvency proceedings.

What happens if a party fails to pay the required fees on time?

Non-payment of registration, administration, or arbitrator fees triggers the suspension procedure outlined in Article 27. The DIAC Secretariat issues a notice of default; if the outstanding amount remains unpaid fifteen days after the notice, the arbitration may be terminated at the request of the other party, unless the tribunal decides otherwise based on the circumstances.

Is interest payable on overdue arbitration fees?

The DIAC Rules 2022 do not prescribe interest on late payments. Instead, the Centre applies a standard administrative charge of 1 % per month on overdue amounts, as detailed in the payment instructions accompanying each fee notice. This charge is intended to cover the Centre's additional administrative burden rather than to compensate for lost earnings.

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