Is the Middle East going to lead the way as a global centre for dispute resolution? Yes, argues Phillip Capper, who believes world-class infrastructure and governance, and a key strategic geographic location makes the variety of ADR options available in the Middle East hugely attractive.

In the Middle East, infrastructure development and investment flows are on such a scale that disputes requiring appropriate resolution seem inevitable. Many of the economies in the Middle East have developed rapidly in recent years and have sought to ensure that world-class best practice judicial skills are brought into those fast-developing economies.

These factors have led to Middle East centres actively promoting themselves as serious dispute resolution service providers, ultimately competing with Singapore, Hong Kong, Paris and London. Arbitration is overwhelmingly the final dispute resolution procedure of choice for international cross-border transactions in most sectors and inevitably arbitration has been the focus of the new centres for dispute resolution.

Indisputable importance
Various centres in the Middle East are seeking to diversify their economies from downstream oil and gas to international financial hubs, for example Dubai, Doha and Bahrain. These areas have recognised the importance of dispute resolution mechanisms in international business. As a consequence, they have actively sought to build world-class arbitration centres, teaming with world leaders such as the LCIA and the AAA and promptly addressing regulatory deficiencies, such as ratifying the New York Convention and introducing arbitration laws based on the UNCITRAL model law, or better.

Statistics are not yet system-atically available from the new centres, although evidence suggests that arbitration in the Middle East is on the rise.

There are strong indications that the demand will continue to grow. Infrastructure has been created with several organisations established across the region in the past few years. Dubai has taken aggressive steps to become a leading centre of international arbitration, in line with the Dubai government’s strategy to make Dubai a world- class financial and economic centre with internationally accepted laws and facilities. It now has two established centres for dispute resolution. The first is the Dubai International Arbitration Centre (DIAC), which in the past five years has become independent from the chamber of commerce. It has a distinguished international board of trustees and has been overwhelmed by the recent increase in cases. The second is the Dubai International Financial Centre (DIFC), which launched a joint venture with the LCIA in February 2008.

The DIFC-LCIA Arbitration Centre strategic partnership has already been very active, with the cycle of its case load already reaching final award. The DIFC-LCIA rules are a close adaptation of the LCIA rules, used in international disputes for many years. Dubai is also a New York Convention territory (ratified by the UAE in August 2006, in force November 2006) and has been drafting a new arbitration law, based on the UNCITRAL Model Law, an internationally accepted standard.

Adding options
The most recent newcomer is the Bahrain Chamber of Dispute Resolution, established in January 2010 at the initiative of Bahrain’s Ministry of Justice in partnership with the American Arbitration Assoc-iation (AAA). The chamber caters for arbitration to be administered under rules of the International Centre for Dispute Resolution (ICDR), AAA’s international division. Users can also opt for arbit-ration under UNCITRAL rules, administered by the chamber.

New legislation creates an arbitration “freezone” and introduces statutory arbitration for claims worth more than US$1.3m involving an international party or a party licensed by the Central Bank of Bahrain. Bahrain has adopted the UNCITRAL Model Law.

The Qatar International Center for Arbitration (QICA) was established under governance of the Qatar Chamber of Commerce and Industry (QCCI) in 2006. Syria established its first economic arbitration centre, for protection of local, Arab and foreign investments in December 2009. Before these, the Abu Dhabi Commercial Conciliation and Arbitration Center was established by Abu Dhabi Chamber of Commerce & Industry in February 1993.

The Cairo Regional Centre for International Commercial Arbitration (CRCICA) traces its roots back to 1979.

The Middle East had suffered setbacks in the past. Saudi Arabia has particular constraints in relation to arbitration. There had been some antipathy in the region towards ICC and “western-style” arbitration styles.

But now the Gulf region is changing that. New centres are becoming well established, costs can be low and the Middle East is extremely well placed geographically. With the world-class infrastructure and governance in place, the Middle East is a new hub of dispute resolution.

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