Mediation in UAE Under The New Law

Written By - Ali El Mahdy - Jr. Associate
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Federal Law No. (6) Of 2021 Concerning Mediation as an Alternative Mean of Settling Civil and Commercial Disputes (the “Law”).

Introduction:

The Federal National Council has finally approved the Law and considered mediation as a mean to settle civil and commercial disputes to facilitate doing business in UAE, reducing the number of cases before the courts, and reducing litigation expenses. 

The Law defined mediation as an alternative mean for civil and commercial disputes settlement through the mediator.

The Law stated on two types of Mediation, which are: 

  1. The Judicial Mediation, by which the disputing parties may resort to during or after litigation. 
  2. The Private Mediation, by which the disputing parties may directly resort to before litigation in accordance with an agreement between such parties.

Scope of Application:

The provisions of the Law shall be applied in disputes which are subject to reconciliation in a manner that does not contradict with the legislation in force or morals and public orders and local laws that regulate the provisions of mediation. However, as an exception, such rules cannot be applied in the cases where the parties resorted to the Federal Law no. 17 of 2016 and its amendments. 

Forms of Mediation Agreements

Mediation is a voluntary process; accordingly, it shall be made through agreement between the parties. This agreement should be made in writing prior to the dispute either in a separate agreement or in a specific clause regarding all or part of the disputes that may arise between the parties, or in a separate additional agreement after filing the dispute.

The mediation agreement can be concluded by a natural person who has the capacity to dispose rights, or a representative of a legal person authorized to conclude mediation agreement, otherwise it will be void.

Furthermore, the agreement shall state on certain points, for instance, it shall include the subject of the mediation, the method of appointing the mediator, and it may include the mediation procedures as well.

Moreover, the provision of the new Law established lists to register mediators in designated centers in article 4 of the Law, provided that, the competent court issues a decision to refer the dispute to mediation at any stage of the case, whether by a proposal from it coupled with the consent of the parties, at their request, or in implementation of the mediation agreement.

Appointment of the mediator:

The mediator may be appointed by the parties or through the court, in both cases specific mediator or in case the parties failed to agree on a specific mediator, or the mediator refused to mediate then the competent court shall appoint a mediator from the registered mediators, however, the mediator must approve his appointment within three days from the notice and he must be independent from the parties and the subject of mediation. Also, the specific mediator shall agree with the parties on the fees however, it must not exceed 5% of the value of the dispute.