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The MENA Blog

An Analysis of UAE’s Commercial Mediation Law: Federal Law No. 6 of 2021

It's scope, as one law firm explains :

Formal mediation options for commercial disputes have existed for some time in the UAE. Both the Abu Dhabi and Dubai chambers of commerce offer mediation services to members, the Centre for Amicable Resolution of Disputes in Dubai provides compulsory mediation services for smaller claims and optional mediation for larger ones (Dubai Law No. 16 of 2009, as amended by Administrative Resolution No. 1 of 2017 and Administrative Resolution No. (51) of 2020), and mediation is available under rules applicable in the Dubai International Financial Centre Court and Abu Dhabi Global Market Court.

The UAE [Commercial] Mediation Law [No. 6 of 2021] is landmark legislation. It creates a comprehensive regulatory structure for mediation throughout the UAE for the first time, ensuring that a consistent framework applies in all emirates.

UAE Federal Law No. 26 of 1999, on the Establishment of Conciliation and Reconciliation Committees at the Federal Courts, also played a role in building the infrastructure for mediation in UAE. A copy of this law is available here. The law established three-member committees, associated with courts of First Instance (the trial courts), charged with the power to "settle civil, commercial and labor disputes of whatever value in addition to disputes of undetermined value. . . ." (Articles 1&2.)

Scope, Venue, and Public Policy Limitations of Federal Law No. 6 of 2021

I would call the UAE Commercial Mediation Law "authorizing" legislation. It allows courts to enforce agreements to mediate, refer parties to mediation, and enforce any settlement agreements arising from mediation.

It generally covers mediator qualifications, selection of a mediator, the mediator's role, the maximum length of sessions to ensure that if the process fails, the litigation can proceed on a timely basis, and confidentiality of mediation communications.

Article 2 of the new law sets out its scope. It provides:

Mediation may take place in respect of all disputes on which conciliation is possible, in such a manner that does not go against the applicable legislation, public order or public morals in the State, subject to the local laws that regulate mediation provisions.

Mediation may involve the matter of dispute in whole or in part.

The provisions of this Law shall apply if the mediation is administered within the State or where the dispute is subject to an international commercial mediation or conciliation execute abroad yet the parties agree to render it subject to this Law.

The provisions of this Law shall not apply in case of prior recourse to the procedures described in the above-referenced Federal Law No. [17] of 2016 as amended.

Oddly left out of this article is a discussion of the substantive scope of the law. The title of the law and the definition of "Mediation" provide this information.

The definition, discussed in detail here, limits its scope to "civil and commercial disputes that arise or might arise between the parties to a contractual or non-contractual legal relationship . . . ." (Article 1). This language is far more general than the language found in the Qatari mediation law, discussed here.

The Mediation Law clearly omits application to family law disputes. I'd like readers to comment on whether other UAE laws govern mediation in this context. In the U.S., family mediation is a separate area of practice that requires specific training for mediators.

Many family courts in the U.S. routinely refer divorcing parties to mediation to resolve asset distributions and co-parenting responsibilities.

More on Scope Additional Flexibility for Parties :

Article 2 of the UAE Commercial Mediation Law provides two provisions that offer parties more options to use it.

First, parties can mediate just a part of the dispute. Often a gateway issue exists that, once resolved, will allow a negotiated settlement of the entire dispute. Thus, parties can save time and expense by agreeing to limit the scope of the mediation to one or more issues.

Second, the UAE Commercial Mediation Law, like the Qatari law, applies if the parties agree to mediate in the UAE (even if the dispute arises abroad) or if they mediate abroad but agree that the UAE Mediation Law will apply. This provision supports party control over the law governing the mediation.

Accordingly, the original contract between the parties may designate that the UAE Mediation Law apply, usually pursuant to a general statement of applicable law or by way of a more specific ADR clause.

But, a separate mediation agreement, negotiated before or after the dispute arises, could also specify that the UAE Mediation Law would apply. Article 3 specifically contemplates this situation.

As a side note, international mediated settlement agreements not made expressly subject to this law would not be enforced under it. (see Article 18). However, UAE officials promised in 2022 that the country would become a signatory to the Singapore Convention on Mediation. However, as of August 2023, it has not become a signatory.

Unlike the Qatari law, which had a long list of exemptions from mediation under Article 3, the UAE Mediation law has only two exemptions.

First, it excludes the mediation of disputes that "go against applicable legislation, public order or public morals in the State . . . ." While this language is vague, it expresses a value found in other jurisdictions.

For example, in the U.S., most, if not all, state statutes preclude mediation of disputes arising from unlawful contracts. Accordingly, the parties could not mediate a dispute involving the sale of illegal drugs or prostitution. But, this subpart seems to limit mediation in other contexts, as well. Courts will need to flesh out the scope of this exception. I suggest courts interpret it narrowly.

The next exemption provides: "The provisions of this Law shall not apply in case of prior recourse to the procedures described in the above-referenced Federal Law No. [17] of 2016 as amended."

A copy of this law, entitled "On the Establishment of Mediation and Conciliation Centres in Civil and Commercial Disputes," appears here. That law permits mediation of civil and commercial disputes valued at less that AED 500,000 (about $ 136,000) or of non-estimated value.

  • The mediation centres law exempts:

(1) Urgent and temporary orders and lawsuits;

(2) Lawsuits in which the Government is a party;

(3) Rent lawsuits settled by committees specialized in rental disputes;

(4) Labour disputes;

(5) Personal status lawsuits,

(6) Any other lawsuits decided to be settled before another Centre, committee, or entity of similar competence."

Given the limitation of my familiarity with UAE laws, I invite lawyers practicing in UAE to post comments providing additional information about these exemptions.

For example, how many of the disputes exempted from the scope of Federal Law No. 17 of 2016 could be mediated under Federal Law No. 6 of 2021 given its broad applicability to civil and commercial disputes that arise by contract or through another legal relationship? Are commercial lawsuits with the Government subject to mediation now? Why this Matters ?

One law firm has suggested that the Singapore Convention alerted officials to the need to "bring their national laws in line with their obligations under the . . . Convention . . . ." Accordingly, "signatories in the [Arab Gulf] region will have to amend or, as in most cases, introduce dedicated standalone national laws on mediation."

As the UAE builds the infrastructure to support modern mediation, it makes sense that laws would focus early on civil and commercial dispute mediation. People bringing these claims will often have experienced counsel who are familiar with mediation.

Parties may wish to resolve the case quickly using a facilitated negotiation process. Mediation can resolve disputes more efficiently and more cheaply than litigation or arbitration.

In addition, mediation is better at preserving business relationships. In the hands of a skillful mediator, the parties can repair the existing relationship and enhance future business opportunities.

Or, they can terminate the relationship with fewer regrets, less blame, and less resentment.


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