What are the legal grounds for setting aside an arbitral award under UAE law?

The annulment of an arbitral award in the United Arab Emirates is governed by Federal Decree-Law No. 6 of 2018 on Arbitration, which sets out the limited grounds on which a party may request the UAE courts to set aside an award, and the procedural steps that must be followed to lodge such a challenge.

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WHAT ARE THE LEGAL GROUNDS FOR SETTING ASIDE AN ARBITRAL AWARD UNDER UAE LAW?

Under Article 34 of Federal Decree-Law No. 6 of 2018 on Arbitration, an award may be annulled only if the party applying proves one of the following: (a) the arbitration agreement was invalid under the law to which the parties subjected it; (b) the party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was unable to present its case; (c) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission; (d) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Law from which the parties cannot derogate; or (e) the award is in conflict with the public policy of the UAE. Each ground must be substantiated with evidence, and the burden of proof rests on the applicant. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

HOW DOES A PARTY INITIATE THE ANNULMENT PROCESS BEFORE THE UAE COURTS?

A party seeking to set aside an award must file a petition with the competent court of first instance within thirty days from the date on which the party received the award, or, if the award was not notified, within thirty days from the date on which the party had knowledge of the award. The petition must be written in Arabic, state the specific ground(s) relied upon, annex a copy of the award and the arbitration agreement, and include any supporting documents such as correspondence, notices, or expert reports. Court fees are calculated according to the value of the claim, typically a percentage of the amount in dispute, and must be paid upon filing. The applicant must also serve a copy of the petition on the opposing party, who then has an opportunity to file a response within the period set by the court, usually fifteen days. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

WHAT PROCEDURAL STEPS FOLLOW AFTER THE PETITION IS FILED?

Once the petition and response are submitted, the court schedules a hearing to examine the merits of the challenge. During the hearing, the judge may request additional evidence, hear oral arguments, and, if necessary, appoint an expert to clarify technical matters. The court does not rehear the underlying dispute; its review is limited to the procedural and substantive grounds listed in Article 34. If the court finds that any ground is established, it will issue a decision to set aside the award, either in whole or in part. If the challenge is dismissed, the award becomes enforceable, and the prevailing party may proceed with execution proceedings under the UAE Civil Procedure Code. The parties may appeal the court's decision on the annulment to the Court of Appeal within thirty days of the judgment, and a further cassation appeal to the Court of Cassation is permissible on points of law. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

WHAT ARE THE CONSEQUENCES OF A SUCCESSFUL ANNULMENT APPLICATION?

When the court annuls an award, the parties are returned to the position they occupied before the arbitration, unless the court decides otherwise. The annulled award loses its binding effect, and the parties may either commence a new arbitration (if the arbitration agreement remains valid) or pursue litigation before the UAE courts, depending on the governing law and jurisdiction clauses in their contract. The annulment does not automatically preclude a future arbitration on the same subject matter; however, any new arbitration must comply with the procedural requirements of the Law, including the necessity of a valid arbitration agreement and proper notice. Costs incurred in the annulment proceedings, including court fees and legal representation, are generally borne by the unsuccessful party, although the court may allocate costs differently based on the circumstances. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

FREQUENTLY ASKED QUESTIONS

What is the time limit to file an annulment petition under UAE arbitration law?
The petition must be filed within thirty days of receiving the award, or, if the award was not notified, within thirty days of gaining knowledge of it. This deadline is strict, and failure to comply results in the loss of the right to challenge the award. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

Can a party challenge an award on the basis of errors of law or fact?
No. Article 34 limits challenges to procedural irregularities, lack of jurisdiction, invalid arbitration agreement, excess of authority, or conflict with public policy. Mere errors of law or fact are not grounds for annulment; such matters are addressed through appeal mechanisms within the arbitration process itself, not through court intervention. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

Is it possible to enforce an award while an annulment petition is pending?
Generally, the filing of an annulment petition does not automatically stay enforcement. However, the respondent may request a stay of execution, and the court may grant it if it finds a serious risk of irreparable harm or if the petition appears to have a strong chance of success. The decision to grant a stay rests with the judge's discretion, based on the circumstances of the case. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

What languages are permitted for the annulment petition?
All pleadings submitted to UAE courts must be in Arabic. If the award or arbitration agreement is in another language, a certified Arabic translation must accompany the petition. The court will rely on the Arabic version for its deliberations, and the Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

Are there any costs associated with filing an annulment petition beyond court fees?
In addition to court fees, parties typically incur attorney's fees, translation costs, and, if expert testimony is required, expert witness fees. The court may order the losing party to reimburse the prevailing party's reasonable legal expenses, but this is subject to the judge's assessment of reasonableness and proportionality. The Arabic text of UAE legislation as published in the Official Gazette prevails over any translation.

If your matter involves annulment of arbitration award in the UAE in the United Arab Emirates, you are welcome to request a consultation with Nour Attorneys. Our team can assess your position under the law currently in force and outline the options available to you. Request a consultation

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