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Alternative Methods in the Settlement of Business Disputes

There are only a few things that businesses dread more than dealing with litigation. Petty cases can even have a way in tarnishing reputations, eating up large sums of resources, and damaging relationships. Most businesses know lawsuits steadily increase as they grow. A smart business owner knows that disputes can become increasingly avoidable. There’s actually a lot of alternatives to litigation which can already nip a lawsuit in its bud. Alternative methods for settling business disputes may even resolve the ones that have been long-standing. They’re able to produce solutions for bitter and old fights which otherwise would leave either side damaged.

Also Read: Resolving Family Business Disputes through Mediation in UAE

The UAE legislation on alternative methods for dispute settlement

Federal Law of 2018 No. 6 on Arbitration was issued by the UAE government and it annuls the Civil Procedures Law of 1992 No 11 articles 203-218 which tackled the arbitration provisions in the country.

With the new arbitration legislation, it contains sixty-one articles. It applies the following:

  • Any arbitration that is conducted in UAE is to be governed by the new arbitration legislation unless the parties all agree to utilize another law, provided the arbitration isn’t in conflict with UAE’s public order;
  • Any arbitration that arises from disputes with respect to legal relationships, regardless of whether or not they are contractual, will be governed by UAE legislation unless it’s excluded by special provisions;
  • International commercial arbitration that is conducted overseas can utilize the UAE’s arbitration legislation if parties choose to have the law govern the arbitration

Alternative Dispute Resolution in UAE

  • Negotiation

An alternative dispute resolution applicable in the UAE is negotiation. It is the basic means for settling the disputes between businesses. Although there are businesses that decide to do the negotiations between those that are involved in order for the disputes to be resolved, there are those that prefer to hire lawyers in helping them negotiate fairer deals. Negotiated agreements may become contracts and they are legally enforceable or considered valid in the eyes of the law.

  • Mediation

Another method to resolve business disputes is through mediation. For this, it involves a mediator, which is an impartial person to the dispute. The mediator to the mediation process promotes effective communication between parties to a dispute and will assist in reaching an agreement that is mutually acceptable for parties involved.

It is important for all businesses involved in disputes in UAE to understand that the overall process will be managed by a mediator if they choose to settle a dispute through mediation. The mediator won’t be able to force an agreement or cannot make a decision. The parties simply participate directly and reach an agreement or settlement. The major reason why businesses opt for mediation in settling disputes is that the process is informal, flexible, and voluntary. It’s both confidential and private, and it’s less costly compared to litigation in UAE.

  • Arbitration

In the UAE, arbitration is possible. This means a disputed issue may be submitted to an individual that is impartial for making a decision. The arbitration process will be conducted outside of court. It is a process that typically involves an arbitrator that is reputable and licensed in hearing parties’ concerns to a dispute. The arbitrator will then be able to make a decision. Similar to that of a traditional trial, a single party will be able to prevail. However, unlike the traditional trial, the appealing of rights is limited. The arbitration may be the best alternative method for settling a business dispute in UAE if parties agree to enter it voluntarily. Take note: arbitration may be private if there isn’t any court appeal that is accepted. Arbitration is less structured and formal compared to litigation.

If you wish to opt for this alternative dispute resolution method, then we suggest you involve the Abu Dhabi Chamber as it is able to settle disputes that are trade-related through arbitration and conciliation. The centre also keeps panels of the register for names of specialists that are in the field of translation, arbitration, and conciliation.

Conciliation is conducted with a mediator that is accredited by UAE authorities or one that is selected by the disputing parties.

The decision of the conciliator regarding the dispute won’t be binding; however, it is to be regarded as a recommendation for dispute resolution.

Before you seek out the help of Abu Dhabi Chamber, we would suggest you seek out the help of a dispute resolution specialist in UAE in order for your situation to be heard entirely.

Also Read: How Business Lawyers in UAE can Help

Contact a Dispute Resolution Expert in UAE today

The most appropriate method for settling a business dispute you have been forced to dealing with will depend on the issues concerned as well as the kind of business that is involved. In order to evaluate the best resolution that suits all your needs and requirements, call us today. We offer a free initial consultation for dispute resolution in UAE.

M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more