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Majid Obaid Bin Bashir
"Arbitration, and other forms of alternate dispute resolution, continue to grow in popularity around the world."

Majid Obaid Bin Bashir
Vice Chairman and Secretary, EMAC

Arbitration Changing The Dynamics Of UAE Market

January 30, 2018
Though International Arbitration has been the preferred process of resolving disputes, offering the benefits of greater flexibility, confidentiality, and prospects for enforcement since a long time, Arbitration in UAE is also increasingly becoming a popular method of dispute resolution. The growth of arbitration in the UAE is very much visible, Majid Obaid bin Bashir, Acting Chairman and Secretary General, Emirates Maritime Arbitration Centre (EMAC) talks about changing dynamics of arbitration, challenges concerning maritime arbitration in UAE and the role of EMAC to overcome the challenges.

By Namrata Nikale Tanna, Oil Asia Journal

OAJ - May we request you to share the how the Arbitration has evolved in UAE?
Bashir : Arbitration in the UAE has been work in progress for over four decades. Initially each Emirate had in place its own set of laws supporting arbitration. This all changed in 1992 with the issuance of the UAE Civil Procedure Law. Article No. 3 of the law regulates the arbitration procedures throughout the country and since then, the UAE has witnessed an unprecedented increase in the number of major arbitration centres, including Centres such as Dubai International Arbitration Centre (DIAC), Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) amongst others.

Local courts have played a vital role in the interpretation of arbitration laws and rules, setting up new principles that have become a standardised reference for arbitrators and concerned parties and with that, the execution of an arbitration award has become much easier thanks to the UAE’s perseverance to improve. The country joined the Convention on the Recognition and Enforcement of foreign Arbitral Awards (New York Arbitration Convention) in 2006 pursuant to UAE Federal Decree No. 43. The UAE signed multiple regional and international agreements to further boost the implementation of arbitration provisions, including the Riyadh Convention and the Gulf Cooperation Council (GCC) Convention. In addition the country also entered into bilateral agreements with many foreign countries, further reinforcing the UAE’s position as a leading global arbitration platform.

The most recent development is the establishment of the Emirates Maritime Arbitration Centre (EMAC), which, today, is the only ‘specialised’ arbitration and mediation facility in the region. Not only does this provide maritime stakeholders with a local alternative to arbitration and mediation, but further adds to the directive to develop the UAE as a global maritime hub.

OAJ - Could you please describe the Role and Strategy of Emirates Maritime Arbitration Centre in the global shipping business?
Bashir : Strategy begins with a solid corporate foundation. The Centre is spearheaded by 15 board of trustees of which 5 are on an executive committee. Operationally, EMAC is managed by a secretariat of 6, with a case management team of 3.

As a non-profit organisation EMAC works diligently at ensuring that the community understands what the Centre does, how mediation and arbitration services work, whilst encouraging maritime contractors to focus on the benefits of maritime arbitration and mediation through EMAC. It’s all about awareness and reliability.

OAJ - According to you, how can a sector flourish in the global competitive business environment?
Bashir :EMAC’s services are tailored to serve the Middle East region. For us, being the only maritime arbitration Centre in this part of the world, carries with it a great deal of responsibility. We are essentially here to support the maritime industry with alternative dispute resolution services.

The very nature of maritime business often sees quite complex disputes arise. It’s important for us to ensure that we have a high calibre of professionals on our panel of arbitrators, mediators and experts.

In addition, those associated directly with the operation of EMAC are highly skilled and competent professionals.

OAJ - We request you to highlight the changing Face of International Arbitration Globally and its Impact on the current oil and gas industry?
Bashir : Arbitration, and other forms of alternate dispute resolution, continue to grow in popularity around the world. Thanks to the bunkering and offshore and oil and gas sectors there is a lot of cross over between the oil and gas and global maritime sectors. Every one of these sectors are exposed to their fair share of risks on an international level and when disputes arise, time and cost become crucial.

For many organisations, the resolution of disputes privately is a preferred option to traditional litigation, which makes arbitration and mediation a viable option. This is particularly relevant to sector specific cases which involve parties across international jurisdictions. Given the international nature of the maritime sector, including the offshore oil and gas sector, arbitration offers an efficient and effective resolution process, allowing businesses to continue operations with minimal disturbance.

OAJ - Following the dramatic decline of oil prices, oil and gas producers in the Middle East, how has the maritime sector readjusted their strategies and priorities to adapt to the new price levels and continue to be significant part of the economy?
Bashir: EMAC is a legal support services entity. Whilst we specialise in alternative dispute resolution, our focus is on providing reliable arbitration and mediation services. Disputes happen regardless of the cyclical nature of industrial performance, whether it be the oil price or the oversupply of tonnage, EMAC is here to stay.

OAJ - Could you please address the key practical challenges concerning Maritime arbitration in UAE?
Bashir: Maritime Arbitration in the UAE is in its infancy. EMAC has only just celebrated its first year of operation. Our achievements are monitored on the basis of how many companies are choosing to adopt EMAC as their contractual choice for arbitration.

From the time the EMAC model clause is adopted through to the potential of a claim, a significant amount of time does pass. Realistically, we are optimistic that as confidence in the Centre grows, cases will follow within the first 3 years of operations.

The maritime industry and its day-to-day business is known to adapt to change cautiously. It’s an old industry that is somewhat set in its ways. Trying something new is often recognised as a significant leap of faith, which is why EMAC is focusing all its resources on speaking to the industry.

OAJ - What factors are you focusing for 2017 and kindly throw some light on the future role of international arbitration in the changing dynamics of industry?
Bashir:Given the international nature of business, we will continue to see an adoption of arbitration and mediation to resolve disputes across borders. This is one reason why EMAC has worked tirelessly to raise awareness of the Cetnre and its services to regional and global stakeholders throughout 2017.

Since the Centre’s inception in November 2016, EMAC’s Board of Trustees and the secretariat, have worked towards carrying out the Centre’s long-term strategy to provide the highest standard of arbitrational excellence through its panel of arbitrators, mediators and experts. In 2017, the Centre has worked not only to raise awareness of EMAC for those operating in the maritime sector, but also to encourage the region’s legal fraternity to join the Centre’s panel of abitrators and mediators.

To increase our global footprint, the Centre has successfully introduced itself to the London maritime market in early 2017, and participated in Singapore’s SeaAsia conference, one of the world’s most recognised shipping and offshore conferences. We have also participated in Oslo’s NOR Shipping, Rio de Janeiro’s IBA Maritime and Transport Conference and Copenhagen’s ICMA XX. Embodying the global reach of the maritime industry, these introductions ensure the world is aware of their access to regional and international maritime arbitrators, mediators and experts.

In addition to the Centre’s overseas efforts, EMAC has also worked to cultivate the next generation of arbitrators. EMAC representatives worked with Middlesex University Dubai to mentor the University’s team for the 24th Annual Willem C. Vis International Commercial Arbitration Moot. Additionaly, the Center has held a series of professional breakfast seminars designed to raise awareness of the legal issues encountered by the region’s maritime sector. A platform for learning and networking, the seminars have been well attended by the region’s legal and maritime communities.

In the coming years, EMAC will continue to offer timely and efficient alternative dispute resolution at the highest level. As we grow, we look forward to our platform bringing together stakeholders from across the international maritime and legal industries, from eminent lawyers, arbitrators and mediators, to experts from a wide range of diciplines and backgrounds.

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