Arbitration at the Forefront of Judicial Progress in Saudi Arabia

source: lexismiddleeast.com

Abstract

The scene of arbitration in Saudi Arabia started to change fundamentally in 2012, when a new Arbitration Law was passed through Saudi Arabia Royal Decree No. M34/1433, which formed part of a large overhaul of the Saudi Arabian judiciary brought on the way by King Abdullah (2005-2015), and which included also a new judiciary law, new procedural codes and execution regulations.

Analysis

I. From Ancient Greece to Saudi Oil

Arbitration as a legal phenomenon has seen its importance reaffirmed in modern times; its beginnings, however, date back to a very distant past. Arbitration was used in many old civilizations such as Ancient Greece and the times of the Romans, but also under Islamic rule. It has been driven, throughout the centuries, by the need of finding, at times, an alternative to the ordinary judiciary.

Arbitration has sometimes been preferred to the ordinary courts since it gives the parties the freedom to choose an alternative law (other than that of the country where the judgement is rendered) to govern the dispute. In Ancient Greece for example, the philosopher Aristotle wrote: “…equity is justice in that it goes beyond the written law; and it is equitable to prefer arbitration to the law court, for the arbitrator keeps equity in view, whereas the judge looks only to the law, and the reason why arbitrators were appointed was that equity might prevail…”

Islamic law, to the contrary, came about as a codex in which social justice is founded on religious beliefs. The Islamic understanding of arbitration is therefore one that is closer to reconciliation than to adjudication (“…and if you fear dissension between the two, send an arbitrator from his people and an arbitrator from her people; if they both desire reconciliation, God will cause it between them. Indeed, God is ever Knowing and Acquainted…” Quran, 4:35). Nevertheless, arbitration is reported to have been widely used by Arab merchants during the heydays of Islamic rule, though with a strong emphasis on mediation.

In modern-age Europe, arbitration re-emerged first in England and in the Netherlands. The first modern arbitral award was issued in 1610 in England, a country that enacted the first modern arbitration law in 1698, before institutionalizing arbitration by establishing the City of London Chamber of Arbitration in 1892, which is now known as the London Court of International Arbitration (LCIA).

Saudi Arabia entered the arbitration arena after the discovery of oil in 1938, shortly after the unification of the country in 1932. The Kingdom’s founder, King Abdulaziz (1932-1953) had enshrined arbitration-friendly Islamic law as the Constitution and the common law of the country, but the Government later put a stop to the development of arbitration, after a foreign arbitration panel had handed down a tough ruling against the Kingdom in the matter Saudi Arabia v. ARAMCO (1958). The Council of Ministers passed a resolution in 1963 that prohibited the use of arbitration in all public contracts. For a long time, arbitration remained an abandoned field of law and was left without a detailed body of rules, regulated only by the basic principles of Islamic law and a few scarce provisions contained in an old ‘Commercial Court Law’ which had been enacted before the unification of the Kingdom.

Only in 1983 was a much more developed statute approved which, however, had two major disadvantages: On the one hand, it prohibited the use of any language other than Arabic and, on the other hand, it made it easy for the parties to challenge arbitral awards in front of the competent court. The 1983 statute was therefore not well received by the market and arbitration was hardly ever used – until fundamental changes took place in 2012 and then even more dramatically, in 2017.

II. Emergence of a new arbitration scene

The scene of arbitration in Saudi Arabia started to change fundamentally in 2012, when a new Arbitration Law was passed (Saudi Arabia Royal Decree No. M34/1433), which formed part of a large overhaul of the Saudi Arabian judiciary brought on the way by King Abdullah (2005-2015), and which included also a new judiciary law, new procedural codes and execution regulations. The new Arbitration Law made Saudi Arabia the second Arab Gulf country – after Oman – to update its arbitration system to the UNCITRAL standard. Bahrain followed in 2015, then Qatar in 2017 and the United Arab Emirates in 2018. However, the new Saudi Arbitration Law practically entered into force only in September 2017, when the Implementing Regulation to the law was published.

The UNCITRAL Model Law on International Commercial Arbitration has received global recognition as model legislation and international best practice in arbitration. The model statute was developed in 1985 to provide uniformity in arbitration. Legislation based on the Model Law has today been adopted in a total of 111 jurisdictions worldwide. It is intended to be consistent with the principles enshrined in the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which the Kingdom had acceded back in 1994.

Saudi Arabia Royal Decree No. M34/1433, as the UNCITRAL Model Law, embodies several ‘pro-arbitration’ principles, especially the right to choose freely the applicable law, the procedure, the venue and the seat, the arbitrators, the procedure to challenge the arbitrators, the commencement of the arbitration, and whether the tribunal will be able to issue temporary or precautionary measures. It also lets the parties select the arbitration language. The law furthermore guarantees the right of the parties to choose the institutional rules, which apply to their arbitration, including rules widely recognized and used in the international arbitration community such as the LCIA Rules, or the Rules of the International Chamber of Commerce (ICC). As compared with the previous statute of 1983, the new Arbitration Law includes the novelty of granting the parties a whole set of newly regulated rights throughout the arbitration proceedings. Similar to the entrenched common law principles of due process and fair trial, they apply by default whenever the parties have failed to prescribe their own set of guarantees. Most importantly, however, the 2012 law allows the parties to effectively oust the jurisdiction of the normally competent court, as it deems any arbitral award to be final, non-appealable, and enforceable even in case a court was to declare it invalid (article 50(3) of Saudi Arabia Royal Decree No. M34/1433).

To make things even more comprehensive, the enactment of Saudi Arabia Royal Decree No. M34/1433 was accompanied by the establishment in 2016 of a modern international arbitration centre, the Saudi Center for Commercial Arbitration (SCCA). Headquartered in Riyadh, the Center published its Arbitration Rules in the same year, i.e. the year in which the Kingdom’s ‘Vision 2030’ and ‘National Transformation Plan 2020’ were unveiled. Its creation fully coincided with the Kingdom’s plan to achieve the most effective implementation of the Arbitration Law and guarantee speedy procedures, as a means of bolstering economic diversification.

III. Recognition and enforcement

Under the new laws, different recognition and enforcement regimes apply to different types of arbitration awards. Arbitration awards can be either domestic, international or foreign. The new Arbitration Law applies to domestic, international and foreign arbitration. The recognition and enforcement of foreign arbitral awards in Saudi Arabia used to be doubtful in the past, but after a number of substantial improvements, the situation has then changed considerably.

A. Domestic awards (two-step procedure)

Before an order for the enforcement of a domestic award can be issued, the competent Appeal Court must make sure that three conditions are fulfilled:

1. That the award is not in conflict with a judgment issued by a court which had jurisdiction to decide the original dispute;

2. That it does not violate Sharia law or public policy; and

3. That it has been properly notified to the other party.

Once the Appeal Court has issued the enforcement order, the award creditor must then seek to execute the order at the Execution Court, in accordance with the Execution Law, Saudi Arabia Royal Decree No. M53/1433.

B. International awards (two-step procedure)

International awards are those rendered abroad but to which the Arbitration Law has been made applicable as per an agreement of the parties.

The recognition and enforcement regime for international awards is identical to the one that applies to domestic awards, with the exception that the Law grants exclusive jurisdiction to the Appeal Court in the capital (Riyadh) for questions of recognition and nullification. This jurisdiction applies by default, i.e. the parties are free to give jurisdiction to a different Court of Appeal (e.g., Jeddah or Dammam), by a simple agreement.

C. Foreign awards (one-step procedure)

Interestingly, foreign awards, i.e. those to which the Arbitration Law does not apply, are not subject to a two-step recognition and enforcement procedure, but only to a one-step procedure.

In the case of a foreign award, only the Execution Law applies to the process, not the Arbitration Law. As per the Saudi Arabia Royal Decree No. M53/1433 the matter must be brought directly before the Execution Court (i.e. with no Appeal Court being involved). To declare a foreign arbitration award enforceable, the execution judge must make sure that six conditions are fulfilled:

1. The Saudi Arabian courts did not have jurisdiction to hear the underlying dispute;

2. The award is not inconsistent with a judgment or an order issued in relation to the same subject by a judicial authority of competent jurisdiction in Saudi Arabia;

3. The award does not contain anything that contradicts Saudi Arabian public policy and especially Sharia law;

4. The award was rendered following proceedings that complied with the principles of due process;

5. The award was rendered in a final form, according to the law of the seat of the arbitration; and

6. The country in which the award was rendered guarantees reciprocity in enforcing awards rendered in Saudi Arabia.

D. The revolution in judicial practice

In the past, foreign arbitral awards were recognized and enforced only sporadically in the Kingdom, and parties were often reluctant to submit to foreign arbitration. The situation has, however improved a lot in recent years, and even more dramatically, in recent months. The following improvements have been achieved:

1. Except for the above described procedural differences, neither the Arbitration Law nor the Execution Law distinguishes between domestic awards and foreign awards, regarding their recognition and enforcement.

2. The analysis of recent case law shows that unlike in the past, there is nowadays much less reluctance towards the recognition of foreign awards (and even foreign judgements). For example, in May 2017, an USD 18.5 million ICC award rendered in London was recognized and enforced against a Saudi Arabia based debtor whereas in May 2018, a USD 3.8 million judgment of a court in the US state of Virginia was recognized and enforced against a company based in the Kingdom. Whereas a few successful cases were known also before the coming into force of the Execution Law, recognition and enforcement today usually takes only months and not years. The statistics of the Ministry of Justice show that the increased efficiency of the recognition and enforcement procedures has led to significantly increased numbers of applications and enforcement decisions. The number of execution cases involving foreign decisions has spiked from somewhere close to zero, back in 2012, to hundreds of cases per year nowadays.

IV. The last roadblock

The entire area of arbitration in Saudi Arabia has improved significantly in recent times. Laws and regulations have undergone deep changes to implement international best practices while at the same time, the enforcement of foreign awards has improved significantly in the practice and attitude of the courts. Furthermore, a new institutional arbitration represented by the SCCA demonstrates the readiness of the Kingdom to open its doors wide to modern and flexible settlement of cross-border disputes, which includes even the possibility to shift the hearings abroad if need be.

The road to forming an efficient international commercial arbitration system in Saudi Arabia was not smooth but rather met by setbacks such as the disappointment surrounding the Saudi Arabia v. ARAMCO (1958) case, the cold reception of the 1983 Arbitration Law and the Kingdom’s accession to the New York Convention that remained largely without effect during more than two decades.

Now, however, as the Implementing Regulations to the new Arbitration Law entered into force in September 2017, and the courts have started recognizing and enforcing foreign awards by the hundreds, the Saudi Minister of Justice can finally report a resounding ‘mission accomplished’ to his new Sovereign King Salman (2015- ), the new Crown Prince Mohammed bin Salman and to the world of trade. It is expected that the resulting new confidence in the Saudi Arabian practice of dispute settlement will boost foreign investment levels in the Kingdom, as envisaged in the Government’s ‘Vision 2030’ economic diversification program.

At the same time, the business world and legal professionals are now awaiting the final roadblock to be removed by the Government to allow a fully-fledged development of arbitration in all sectors including public contracts. In this respect it is encouraging to see that that the draft new Government Tenders and Procurement Law, which was circulated and published for comments in November 2017, intends to end the prohibition to arbitrate over government contracts, which was decreed in 1963 in the aftermath of the ruling Saudi Arabia v. ARAMCO. The final boost for arbitration in the Kingdom is therefore believed to be given in the year 2019, at the latest.

About the Authors

Jochen Hundt – Managing Partner at Hundt Legal Consultancy in association with The Law Office of Khalid O. Alattas (Riyadh/Jeddah, Saudi Arabia)

+966 50 423 3752

Jochen Hundt is a German legal consultant born in 1969, educated in France and in the United Kingdom (double LL.M), admitted to practice in Saudi Arabia since 1998. He is the founder and owner of Hundt Legal Consultancy, a legal and tax consultancy established in 2011 in the UAE, operating in various jurisdictions (Saudi Arabia, UAE, Bahrain, and Algeria, with a strong focus on KSA) through its local cooperation partners. In Saudi Arabia, Jochen is advising over a dozen European embassies and foreign trade missions. He has published many articles in regional and international reviews and he is a frequent speaker at conferences both in the MENA region and in Europe. Jochen is a founding member of several lawyers’ and business organisations.

With input from Yassen Azeroil and Nouf A. S. Al-Qhtani, Hundt Legal Consultancy in association with The Law Office of Khalid O. Alattas (Riyadh/Jeddah, Saudi Arabia) – ‘Alattas & Hundt’

Interview – Building a global legal community: the story of a Canadian law student in Dubai

source: lexismiddleeast.com

An interview with Viva Dadwal, McGill University Faculty of Law’s inaugural clerkship student at the DIFC Courts.

Analysis

An “intellectual partnership” as described by the DIFC Courts… champions of legal pluralism and judicial leadership, McGill University’s Faculty of Law and the DIFC Courts have joined forces to showcase to the world the importance of two-way exchanges between courts and law schools. One could not think of two countries better suited to discuss the challenges and successes faced by countries with civil and common law traditions.

LexisNexis met in person with Viva Dadwal, the “pioneer clerk”, who recently returned from Dubai after spending a month at the DIFC Courts. Viva had the opportunity to work side-by-side with the legal architects working on the Courts of the Future. She shared with us her experience at the Courts, her insights on the clerkship, as well as what this judicial partnership means for both Canada and the UAE—two very different countries navigating similar legal landscapes.

Describe to us your academic/legal background and how you got involved in this clerkship. Why would a clerkship in Dubai be of interest to a Canadian law student?

I am going into my last semester at McGill University, where I am studying towards a joint-civil and common-law degree. Prior to law school, I spent a year in Baltimore as a Visiting Scholar at Johns Hopkins University, and before that, I was with Global Affairs Canada negotiating trade and investment agreements. I have an undergraduate degree in Biology and Biotechnology from the University of Windsor and a Master’s degree in Public and International Affairs from the University of Ottawa. I heard about the clerkship through our school. I enjoy learning from different disciplines, countries, and cultures so this was the perfect opportunity to try something new and unique.

As for your other question, a clerkship at the DIFC Courts should be interesting to Canadian students for three main reasons. First, geographically speaking, Dubai and the DIFC Courts are situated (quite literally) in the middle of the world. This gives the DIFC Courts a physical and cultural advantage being at the crossroads of global commerce. Second, clerking at the DIFC Courts allows students to taste how an up-and-coming international commercial court navigates both the civil and common law traditions. The core principles of law in the UAE were also historically drawn from Sharia law, which also presents an interesting third legal order in the mix. The judiciary and the workforce at the DIFC Courts reflects this diversity (e.g., UAE, Malaysia, Singapore, Australia, U.K.), which can be a large source of knowledge for students interested in comparative law. Finally, and perhaps most importantly, the DIFC Courts have visionary leaders who think deeply about the role and functions of judicial institutions. As a relatively young court, a lot more experimentation and innovation is possible, which is exciting for any future-minded students!

This bridge-building in the region is the first of a kind for a Canadian law school, why McGill, why the DIFC, why now?

McGill University is Canada’s most globally oriented law faculty, and the only one to teach a bilingual (French and English) curriculum that combines perspectives from common law, civil law and, increasingly, Indigenous legal traditions in a unique integrated and comparative approach. Throughout its long history (it is the oldest law school in Canada!), the Faculty has always been a frontrunner in innovative legal research and pedagogy. The most recent overhaul of the curriculum has placed an even greater emphasis on putting knowledge into action and experiential learning.

At the same time, the DIFC Courts have emerged as the region’s hub for judicial and legal training excellence and are preparing lawyers and judges to work across the world’s jurisdictions. The 2018 DIFC Courts Work Plan identifies the importance of developing greater understanding of the two legal traditions that govern Dubai. Encouraging intellectual partnerships with tertiary institutions was identified as an important first phase, and looking particularly at those countries which have more than one legal tradition in their legal system was critical.

All of these factors contributed to building a favourable context for this official partnership, which actually builds on what was once an ad-hoc student clerkship. The idea of a formal programme was suggested to the law school—with important backing from various Canadian and UAE business groups and government agencies—and came about in an impressively short time!

Tell us a bit about the clerkship that was set up between McGill University and the DIFC Courts. Share with us some details on the purpose, mission, what you were doing… How does this clerkship programme enable greater 1/academic 2/ judicial cooperation between Canada/Quebec and the UAE/Dubai.

The McGill University – DIFC Courts clerkship programme enables greater academic cooperation by establishing an educational partnership between two world-class legal institutions. It does so by promoting legal scholarship, and giving McGill law students a practical experience in trans-systemic law and thinking on an international level.

The clerkship was designed with three overarching themes in mind. First, there is a focus on the development of a student’s knowledge of substantive law. This involves discovering the links between legal principles and doctrine under the supervision of judges (this is generally the traditional clerkship model).

Second, there is an emphasis on being exposed to judicial leadership. This component consists of understanding the importance of effective leadership in building world-class legal institutions, including the judicial institutions of tomorrow. Exploring ideas alongside some of the key players in the DIFC Courts and the Dispute Resolution Authority was undoubtedly the most interesting aspect of the clerkship for me.

Finally, true to the nature of both McGill University and DIFC Courts, there is a strong focus on legal pluralism. This means exploring the trans-systemic mandate within daily operations, i.e., from an administrative perspective, whether it be within or outside the DIFC. An insight into the administrative framework of the DIFC Courts helps students observe how different legal systems cooperate to achieve similar outcomes. On that front, I am leading a capstone project that is allowing me to investigate the application of blockchain technology in the recognition and enforcement of foreign judgments and arbitral awards.

Canada is a bijural country and so is the UAE (even trijural) to some extent. To what extent are the Canadian and UAE legal systems an example to countries trying to find the right balance between Civil Law and Common Law traditions?

To be frank, we have to first recognise that no legal tradition is “better” than another. There are fundamental juridical problems that are common to all legal traditions. It is our job as jurists to be able to imagine appropriate legal solutions to solve these fundamental human problems. This said, there are many lessons that Canada and UAE can share with the world. At a big picture level, Canada offers a nice example of a jurisdiction where the civil and common law influence each other in a positive way. This is probably one of the reasons why Canadians often find themselves at the forefront of international and comparative law initiatives. Looking beyond that, I think we are still learning how to navigate and incorporate other legal traditions and ways of thinking.

How will we do this? Naturally, the UAE offers important lessons on legal experimentation and innovation. It started as a country built on Islamic and European concepts of civil law. Soon thereafter, it began devising common-law free-trade areas that gave rise to new institutions like at the DIFC Courts. Earlier this year, it launched Blockchain Strategy 2021. There is no doubt in my mind that lessons from the UAE will help inform the work being undertaken in other jurisdictions, including in Canada.

Interview conducted by Erik Chiniara, Editor-in-Chief – Lexis Middle East Law www.lexismiddleeast.com  in collaboration with McGill University Faulty of Law and the DIFC Courts.

The Lebanese Access to Information Law: more transparency, more accountability and what else?

Source: lexismiddleeast.com 

Abstract

The Lebanese Parliament in January 2017 passed the Access to Information Law (Lebanon Law No 28/2017), introduced in 2009. The Law applies to listed public authorities and selected private companies and organisations. It provides for the right for anyone to receive information on request, requires the publication of expenditures, annual activity reports, all implementation orders and rationale of all laws, allows for the protection of personal data and mandates a written rationale for all personal administrative decisions.

Analysis

The 2017 law allows any natural or legal person, Lebanese or non-Lebanese, to access and view the information and documents of an ‘Administration’, in line with its provisions and without abusing this right.

This law is long overdue and in an era where ‘fake news’ seems to have stained the credibility of the press, this law will most probably help enhance the credibility and accuracy of the news and will offer the press and civil society an opportunity to better hold the people’s representatives to account.

This law has also championed the fight against corruption and is aimed at increasing transparency in and from public institutions.

These new ‘rights’ given to citizens, also guarantee by exception to the principle of transparency and access to all information, the secrecy of certain types of information which might be considered vital for public safety and national security reasons. The restrictions on full access to information are related to the following:

• Information which may be classified as national defence, national security and public security secrets.

• The management of the State’s secret external relations.

• Information which may be harmful to the financial and economic interests of the State and to the integrity of the national currency.

• The private life of people as well as their physical and mental health.

• Professional secrets protected by law such as lawyers’ and commercial secrets.

A list of documents are considered not available in a limited list, such as the following:

• The pre-trial proceedings of an ongoing investigation cannot be disclosed, nor proceedings of secret trials and trials related to juveniles and personal status.

• The minutes of the private meetings of the Parliament and its committees, unless otherwise decided, nor the deliberations of the Council of Ministers labelled secret.

• The preparatory and administrative documents which have not been completed.

• The consultative opinions issued by the Council of State, except by the relevant parties in the context of a trial.

Drawing a comparison with other jurisdictions who have championed this cause, Sweden was the first country to adopt this right through the Freedom of the Press Act of 1776. The ‘principle of publicity’ states all information and documents produced or received by public institutions (local or central Government and all public institutions) must be available to all citizens. This principle also states all public institutions must make every effort to give any person any information they may wish as soon as possible.

Finland was the first to adopt modern legislation on the same issue in 1951, which defined the conditions for access to information (or so-called freedom of information) in public institutions. The US adopted the Freedom of Information Act in 1966 and France adopted a law providing citizens with access to administrative documents in 1978.

In 1990, only 13 countries had access to information laws, but by March 2004 more than 50 countries had adopted comprehensive laws to facilitate access to Government records. By 2010, more than 85 countries had adopted this type of law, including Jordan, the first country in the Middle East to have passed the Information Access Act in 2007.

Article 19 of the Universal Declaration of Human Rights, adopted by the United Nations General Assembly in 1948, guarantees the right to freedom of expression and information according to the following criteria: “Everyone has the right to freedom of opinion and expression. This right includes the freedom to embrace opinions without interference, and to seek, receive and impart information and ideas by any means without being bound by geographical boundaries.”

Articles 10 and 13 of the International Convention against Corruption focus on the right to access information. Although Lebanon had ratified the Convention on 16 October 2008, it still needed the tools to enforce it. With the 2017 law this has now changed. Information disclosure in Lebanon will no longer depend on the willingness of individuals in the relevant institutions. Citizens can now join in the decision-making process, take part in public debates while having all the facts and being familiar with the Government’s activities. There was a need for a legal framework which allows Lebanese citizens to monitor the decision-making process in the Government more effectively and the Access to Information Law is a first step in the right direction.

Stay tuned for a full Legislation Commentary written by Ghassan Moukaihber, Lawyer and former Member of the Lebanese Parliament who contributed to the drafting of the law and strongly advocated for it in Parliament and the political sphere.

Sports Arbitration in the Gulf – by Susan Ahern & Arran Dowling-Hussey

Source: lexismiddleeast.com

Abstract

Sports arbitration has become more prominent in the Gulf Cooperation Council region in the last few years. Whilst some of the background to a sports arbitration will be well understood by many lawyers it is a technical area and not all parts of the process may be clear to those who have not had prior direct involvement. This article looks at what sports arbitration is and how it operates in the GCC region.

Analysis

The Gulf region (Gulf or GCC) is a significant venue for major sporting events of worldwide importance. The 2022 World Cup will be held in Qatar. The Abu Dhabi grand prix is a long standing fixture in the Formula 1 season. More recently the 2018 Race of Champions which saw drivers from Formula One, World Rally Championship, IndyCar, NASCAR, sports cars and touring cars compete against one another was held in the Kingdom of Saudi Arabia. Horse racing fans both in and outside the GCC region look forward to the prestigious Gold Cup race in Dubai every year. It is outside the scope of this article to substantively speculate on the degree to which there will be fluctuations in the volume of major international sporting events held in the GCC area. However, it is arguable that there has not been a long-standing tradition of such significant events being held in the region until more recent times and as a result, it is more likely than not that their volume and size will continue to grow in the short to medium term.

Aside from these international events in a region of more than 50 million people, sportsmen and women regularly train and compete at local and national level. It follows that disputes often arise whether they relate to local sporting competitions within municipalities or regions or occur at one of the major international sporting events. What is the best way of resolving these disputes?

It is valuable to consider that traditional court-based litigation is often seen as slow, expensive and not bearing the hallmarks of confidentiality as may often be required. The focus of this article is on the position in the GCC, while any reports that are available on the cost of litigation tend to be focused on the position in one jurisdiction rather than in the region. It is generally well recognised that where arbitration or other alternative dispute resolution (ADR) regimes work well they are cheaper than litigation and can be expedited to suit the requirements of the parties / impending competition event dates.

Sports bodies that find themselves before the courts for employment related matters, eligibility questions, or selection issues have found to their cost that even where they are successful there are no winners. The fallout from an elongated process, can leave rifts within a sport and have negative public relations and sponsorship consequences. In addition, national sports federations (NSF) are ordinarily funded by the state so frequently it is taxpayers’ funds that are used to defend litigation and this ultimately affects the funding of development of the sports concerned. Compare for example the cost of addressing subjects such as compensating the CEO of an NSF who has been unfairly dismissed or appealing an on-field disciplinary sanction to the high court with the comparative cost, speed and confidentiality of an ADR process.

When looking outside the GCC region some helpful guidance may be found in countries that have a long tradition of dealing with sports disputes. In the Republic of Ireland, a common law jurisdiction, the Irish courts have stated that disputes involving sports organisations are best resolved through their own governing bodies and such matters should only come before the courts as a last resort in the rarest of cases [Justice Hedigan in Coughlan v Football Association of Ireland – unreported January 2010].

A dispute arose between St Patrick’s Club and the Tug of War International Federation (TWIF) [Conway v Irish Tug of War Association Tug of War International Federation, Co Koren & Cathal McKeever [2011] IEHC 245, decision of Justice Laffoy] when the Club was penalised with a £1,000 fine and a one-year suspension from international competition for withdrawing from the semi-finals of the men’s world indoor championships (2006) because an opposing team was wearing allegedly non-compliant footwear and permitted to do so by the TWIF official. The Irish Tug of War Association imposed the sanction. St Patrick’s claimed the TWIF had pressured the national federation into applying tougher sanctions and sought a declaration that the TWIF and two of its officials acted outside of their powers and contrary to international tug-of-war rules. The Irish High Court struck out the claim that St Patrick’s Club was wrongly disciplined for refusing to take part in an international competition as an abuse of process. The Court also referenced the jurisdiction of the Court of Arbitration for Sport (CAS) noted in the Constitution of the TWIF (dated 2008, after the initiation of the High Court proceedings), stating that it is usual for a court to lean in favour of disputes involving sporting bodies and clubs and members being resolved by the relevant internal mechanisms. The High Court was not however satisfied that it would be proper to strike out the plaintiff’s proceedings on that ground alone in this action.

Where a dispute relates to whether a player is eligible to participate in an upcoming competition, litigation can be particularly unsuitable In the matter of Chambers v British Olympic Association [[2008] EWHC 2028 (QB), Mackay J], the British track and field sprinter Dwain Chambers, who won the 2010 World Indoor 60m champion when that championship was held in Doha, made an application to the High Court of England for an interim-injunction preventing the British Olympic Association (BOA) from applying its Bye-Law 25 (Eligibility for Membership of Team GB of Persons found Guilty of a Doping Offence) and a declaration that the Bye-Law was void and unenforceable. The application was dismissed, in circumstances where the athlete, had not proved a reviewable restraint of trade or that the Bye-Law was not proportionate. However, the matter ultimately was the subject of proceedings before the Court of Arbitration for Sport in BOA v WADA (CAS/2011/A/2658), in which the Panel concluded that the Bye-Law is a doping sanction and is therefore not in compliance with the WADA Code. The athlete went on to compete in the 2012 Olympic Games for Great Britain.

Consequently, many disputes including sporting disputes are resolved by arbitration. Arbitration is a process within the ADR spectrum where parties involved in a dispute make oral and written submissions to an arbitrator. The arbitrator, or indeed depending on the circumstances – the arbitral panel, is an independent third party that at the conclusion of the arbitral reference issues a final, binding written reasoned award. Sports arbitration shares many of the characteristics of commercial arbitration but also differs in terms of the procedure followed. Arbitration can be organised in two different ways, by way of ad-hoc dispute, where the parties do not fall within the umbrella of an arbitral institution and must make their own arrangements to pick an arbitrator, or alternatively by way of institutional arbitration, where an institutional expert in arbitration will support the process.

In the context of sports disputes, the best known and most important institution at the international level is the Court of Arbitration for Sport (CAS), which hears sporting related disputes ranging from disciplinary matters (including for example anti-doping, corruption, and match fixing), to eligibility (to participate in particular competitions or for particular nations) and commercial matters (such as sponsorship arrangements and player contracts). It has two divisions, Ordinary and Appeals. The latter being the final court of appeal for anti-doping matters under the World Anti-Doping Code, for decisions made by many international sporting federations that have their own arbitration systems (and exclusively for FIFA decisions regarding the status and international transfer of players), as well as for global sports organisations such as the International Olympic Committee.

The CAS was established in 1984 and is under the financial and administrative authority of the International Council of Arbitration for Sport (ICAS). It is headquartered in Lausanne, with decentralised offices in New York and Sydney. Several decisions involving athletes from Saudi Arabia, Qatar, UAE, Iran and Iraq have been handed down by the CAS, including when sitting in its Ad Hoc capacity, providing expedited arbitration at major events such as the Olympic Games and Commonwealth Games. Its decisions are enforceable in over 157 countries under the New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.

A decision of the FIFA Dispute Resolution Chamber in a contractual dispute involving the transfer of Mark Brescia in favour of the UAE’s Al Nasr Sports Club was appealed by the Qatari football team Al Gharafa and the player to the CAS. The case was heard in Switzerland and determined ultimately upheld the FIFA decision [Arbitration CAS 2013/A/3411 Al Gharafa S.C. & Mark Bresciano v. Al Nasr S.C. & Fédération Internationale de Football Association (FIFA), award of 9 May 2014].

An Emirati national, Mohammed Shafi Al Rumaithi appealed to the CAS, [CAS 2015/A/4190 Mohammed Shafi Al Rumaithi v Fédération Equestre Internationale, award of 1 March 2016] the sanctioning decision of a Fédération Equestre Internationale (FEI) Tribunal, which had imposed a 2 year period of ineligibility on him as a result of prohibited substances, namely Propoxyphene and Norpropoxyphene – opiate analgesics (painkillers) which are classified as Banned Substances under the FEI equine anti-doping rules. These substances were found in the blood of Royal des Fontaines, the horse he rode in the FEI sanctioned CS12 event in Ghantoot, UAE. The CAS Panel determined in dismissing the appeal, that a rider cannot delegate his duty of caution or due diligence [see CAS 2013/A/3318 at para 71; and CAS 2014/A/3591 (Glenmorgan) at para.169] – whether to the owner of the horse or medical advisor – stating that double delegation does not decrease the Appellant’s obligations; it aggravates it; nor could the rider attempt to shift the burden of responsibility to the FEI in terms of an alleged failure to inform him about any problems with regard to the use of a substance which is contrary to the fundamental principle of personal responsibility.

These are examples of the types of cases which could now be heard in the UAE at less cost and greater convenience to the parties, as since 2012, Abu Dhabi has become an Alternative Hearing Centre of the CAS following the signing of an agreement between the Abu Dhabi Judicial Department and the ICAS. This is a recognition of the growing importance of the Gulf Region in a sporting and major event hosting context. In addition to the CAS, there is also a draft law in the UAE facilitating the establishment of an Emirates Sports Arbitration Centre. The first case involving an Indian swimmer Amar Muralidharan against the decisions taken by the Anti-Doping Disciplinary Panel (ADDP) and the Anti-Doping Appeal Panel (ADAP) of the Indian National Anti-Doping Agency (NADA) [CAS 2014/A/3639 Amar Muralidharan v. Indian National Anti-Doping Agency (NADA), Indian National Dope Testing Laboratory, Ministry of Youth Affairs & Sports, award of 8 April 2015] was heard on 16 January 2015. It was the first ever hearing held at the CAS Alternative Hearing Centre in Abu Dhabi.

But what recourse is there for national sports disputes which arise and would benefit from an independent arbitration review? Concrete steps to emulate the international sports dispute regime domestically in the United Arab Emirates got underway when in May 2014 the UAE Federal National Council passed a federal draft law regarding the establishment of the Emirates Centre of Arbitration for Sports. The Centre will hear any disputes relating to sports activities or decisions taken by sports federations and clubs. Decisions of the Centre cannot be appealed. A sports-related dispute may be submitted to the UAE Sports Arbitration Centre only if there is an arbitration agreement between the parties which specifies recourse to the Centre, which will be run by a sports arbitration board chaired by the head of the national Olympic Committee. At the time of writing the legislation enabling the Emirates Centre of Arbitration for Sports to be established remains in draft form.

By definition, the sport of predicting the future requires some skill and generally should be avoided but some comments about what will happen in the next few years may be helpful and therefore are offered. It seems reasonable to expect that the use of arbitration for sports disputes in the GCC region will increase. The process itself is not new and is easily understood by users. Sports bodies are accustomed to including arbitration provisions within their rules. There are tangible benefits, already referenced, from availing of arbitration in preference to litigation. Most importantly, the arbitral institutions and arbitral tribunals active in the area of sports arbitration within the GCC region are likely to maintain the confidence of those parties involved in a sports dispute that has gone to arbitration. David Casserly, a partner with Swiss firm Kellerhals Carrard who is active in the region, noted that there has been a limited but nevertheless steady flow of international sports disputes from the GCC region over the last number of years, with football – in particular football employment disputes – being the biggest generator of international sports arbitrations. He also noted that a recent positive development has been the increase in the number of specialised local practitioners and arbitrators, the region having previously been under-represented in the international arena. The future looks bright for the development and expansion of sports arbitration in the Gulf.

 

About the Authors

Susan Ahern-Barrister, FCIArb practises as a Barrister and Arbitrator from the Law Library, Dublin. Ms Ahern is a CAS Arbitrator who formerly was Head of Legal and Legislative Affairs for World Rugby. Susan.Ahern@Lawlibrary.ie.

Arran Dowling-Hussey-Barrister, FCIArb practises as a Barrister and Arbitrator from the Law Library, Dublin and 33 Bedford Row in London. Mr. Dowling-Hussey’s current arbitral appointments include references in the GCC region. ADHussey@33BedfordRow.co.uk.

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