Pro-enforcement predilection: A comparison of the enforceability of awards for interim measures in the UAE, KSA, England and Australia

Introduction

A major area of innovation in arbitration in recent years has been the promulgation of rules by arbitral institutions that allow for interim measures. Interim measures are orders made by the tribunal before disposing of the merits of the proceedings. They can include orders to preserve assets and evidence and grant security for one party’s costs. Interim measures are a useful tool for both the parties and the tribunal to preserve the integrity of proceedings. However, there have long been concerns whether awards in relation to interim measures are enforceable, given uncertainty as to whether they could be classified as a final “award” for the purposes of the New York Convention and local arbitration laws.

This article considers the enforceability of awards for interim measures in the United Arab Emirates (UAE), across its three major jurisdictions, as well as the Kingdom of Saudi Arabia (KSA), Australia, and England and Wales; the conclusion is that jurisdictions across the Middle East are increasingly receptive towards enforcing interim and partial awards, both through legislative developments and emerging case law. This position aligns with the jurisprudence across more established common law jurisdictions.

The UAE

The UAE is a federated civil law system, with each emirate being able to pass their own civil laws. However, the UAE also has common-law-influenced free zones that have English language common law courts and are substantially different legal systems from the rest of the UAE. These jurisdictions are colloquially described as “offshore” jurisdictions, while the rest of the UAE is referred to as “onshore.” The main financial free zones are the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). Different arbitration laws apply onshore and in both offshore jurisdictions.

DIFC

The DIFC is a major regional arbitration hub and is home to the Dubai International Arbitration Centre. The DIFC’s Arbitration Law (DIFC Law No. 1 of 2008) is based on the UNCITRAL Model Law with some amendments.

Over the years, the DIFC has demonstrated itself to be a proenforcement jurisdiction, with the DIFC Courts regularly upholding and enforcing arbitral awards. However, due to the terms of the DIFC Arbitration Law, there had, until recently, remained an open question as to whether the DIFC Courts will enforce interim arbitral awards relating to interim measures, especially when the Tribunal is seated outside of the DIFC. This stemmed from the fact that the recognition and enforcement provisions of the DIFC Arbitration Law (Articles 42 to 44) referred to the enforceability of “arbitral awards” but did not specifically refer to interim measures, whereas separate parts of the Law (specifically, Article 24(2)), did refer to “interim measures,” leading to the question as to whether an “interim measure” was an “award” for the purposes of the Law.

However, in two judgments in late 2023 and early 2024, the DIFC Courts have confirmed that they will enforce such awards irrespective of the seat of the arbitration.

In 2023, in Muhallam v Muhaf (ARB 021/2022), the DIFC Court of First Instance recognized a provisional award rendered by a tribunal seated in London in accordance with English law and the LCIA Rules. The Defendant argued that the provisional award was not an “arbitral award” for the purposes of the Articles 42 and 43 of the DIFC Arbitration Law and was therefore not enforceable by DIFC Courts. The Court of First Instance disagreed with this view and confirmed that “arbitral award” for the purposes of Articles 42 and 43 was broad enough to encompass both interim awards and final awards. The Court of First Instance also confirmed that Article 24(2) provided a summary procedure for the enforcement of interim awards for arbitrations only when seated locally in the DIFC.

This decision was appealed, and the DIFC Court of Appeal rendered its decision in the case of Neal v Nadir [2024] DIFC CA 001/2024. In Neal v Nadir, the Court of Appeal agreed with the Court of First Instance and confirmed that for the purposes of the DIFC Arbitration Law, an “award” would include interim, partial and final awards and there was no public policy justification to support an alternative conclusion.

The DIFC Courts will therefore enforce both interim and final awards, irrespective of the seat of the arbitration. These decisions also affirm the DIFC as an arbitration-friendly jurisdiction. However, practitioners and arbitrators should still remain vigilant. Given the emphasis on enforcement being linked to the “awards,” parties should ensure that any procedural or interim directions are made as “awards” and not mere procedural orders.

ADGM

The other major offshore jurisdiction in the UAE is the ADGM in Abu Dhabi. The ADGM has its own arbitration centre, being the Abu Dhabi International Arbitration Centre (ADIAC), and is another common law jurisdiction in the UAE.

Unlike the DIFC Arbitration Law, the enforcement provisions of the ADGM Arbitration Regulations 2015 specifically provide for the enforcement of both interim awards and orders. Article 30 of the ADGM Arbitration Regulations states that an interim measure issued by a tribunal shall be recognized and enforceable, whether those awards are issued by tribunals seated in the ADGM or internationally. Article 30 states:

30. Recognition and enforcement of interim measures by the Court
(1) Subject to subsection (4), an interim measure issued by an arbitral tribunal shall be recognised as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the Court or any competent court (in either case, the “recognising court”), irrespective of the country in which it was issued, provided such application is made on notice to all parties to the proceedings…

For parties wishing to run their ADGM-seated arbitrations through ADIAC, ADIAC helpfully confirms that its Arbitration Guidelines may be used “by arbitral tribunals as guidance for the purposes of effective case management, including in particular for the purposes of issuing procedural orders” (page 2).

Given the explicit wording of this provision, there has been no jurisprudence from the ADGM Courts regarding the issue of enforcing interim awards. In view of this clear wording, and the ADGM Courts’ pro-arbitration stance, the ADGM Courts can be expected to enforce awards for interim measures for arbitrations seated in the ADGM.

Onshore UAE

As set out above, the rest of the UAE may be characterized as “onshore.” Given that most business takes place onshore, it is an important jurisdiction for the enforcement of awards. Such enforcement issues are handled by the onshore courts, which are civil law courts, and which enforce arbitral awards in accordance with the UAE Federal Arbitration Law (Federal Law No. 6 of 2018).

The UAE Federal Arbitration Law appears to bridge an arbitration gap for parties in the UAE. Article 39(1) of the Law provides that tribunals may issue interim awards or partial awards. Article 55 of the Federal Arbitration Law provides that onshore courts will recognize an arbitral award, but does not distinguish between interim, partial or final awards. Hence, we consider that onshore courts will give consideration to the enforcement of interim measures made by way of an “award.” In respect of “orders,” Article 18 confirms that, upon referral to a local, competent court by parties or by a tribunal, courts may order provisional or precautionary measures. The enforcement by courts of interim measures made by tribunals is also possible pursuant to Article 21(4).

Parties and practitioners should take care to specify the form in which any interim measure should be made, where they may need to enforce such a measure in onshore UAE.

Kingdom of Saudi Arabia (KSA)

As a part of the Kingdom’s race towards its Vision 2030 goals of economic, cultural and social diversification, the KSA has moved to position itself as a leader globally and a jurisdiction of choice for parties wanting to settle disputes. Foreign arbitral awards are enforceable under the KSA Arbitration Law (Royal Decree No. M34/1433).

Pursuant to Articles 22 and 23 of the KSA Arbitration Law, arbitral tribunals are permitted to order interim measures. Subject to any requests made by the parties or the arbitral tribunals, competent courts are able to make interim or preventative orders to this effect. A competent court for the purposes of enforcing interim measures or awards would be the Execution Enforcement Court. The Enforcement Court in the KSA adopts a different approach to the UAE onshore courts. Five factors that the Enforcement Court will consider when determining whether to enforce a foreign arbitral award are that the award does not contravene Sharia principles, it is final, the award debtor was properly notified, awards from the issuing country are enforceable in the KSA and finally, the award is not in conflict with a judgment or decision issued by a court, committee, or commission having jurisdiction to decide the dispute in the KSA.

It is unclear whether this requirement for “finality” refers to substance or to the title of the award, excluding interim, partial and provisional awards/orders. Given the powers under Articles 22 and 23 above under the Saudi Arbitration Law, it is likely that finality will be a matter of substance, as is the case in other common law jurisdictions discussed below.

England and Wales

When considering the enforceability of interim measures, English courts focus on the substance and “finality” of interim measures or partial awards.

For example, the general position is that partial or interim orders, awards or decisions will only be enforceable if they are “awards” for the purposes of Sections 66 and 100(1) of the Arbitration Act 1996. But what makes something an “award?”

If a partial.. award finally disposes of some of the issues in dispute, it can be enforced as an award under Section 66 as that partial award is final and binding in respect of discrete issues. However, if a tribunal issues a provisional order that is subject to further review, or issues a procedural order, a party may not be able to enforce it as an “award” under Section 66.

The Court of Appeal observed in Rotenberg v Sucafina SA [2012] 2 Lloyd’s Rep 54 that when considering the enforceability of a partial or interim award, courts will look to the substance of the award and whether it was intended to dispose of issues finally, as opposed to the award’s label. Additionally in the context of partial awards on jurisdiction, courts may refuse to recognize and enforce awards if the award is not final as to its subject matter, with awards on jurisdiction always being subject to review by local courts (Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46).

Australia

The position in England and Wales above is similar to that adopted by other common law jurisdictions, such as Australia. As a country that has ratified the UNCITRAL Model Law at national and state levels, courts in Australia will recognize and enforce a partial or interim award only if it determines a substantive right, claim or defense in the arbitration (in accordance with Articles 17H and 17I of the Model Law).

Australia’s interpretation of the Model Law doctrines may evolve due to an ongoing dispute before the High Court, which is set to decide whether arbitral tribunals can re-decide matters that were disposed of in interim awards or whether interim awards are “final” (and enforceable) in this regard. Read more about this matter here.

When examining English and Australian enforcement, it becomes clear that “finality” is a core component for enforceability in these jurisdictions. This is something that both offshore and onshore courts in the UAE may grapple with in the future.

Conclusion

For parties looking to resolve complex commercial disputes in the Middle East, recent developments in the DIFC are bringing the UAE in line with other common law jurisdictions which have historically been preferred jurisdictions for recognition and enforcement. Noting that some enforcement provisions of arbitration laws in the region remain untested, parties should mitigate risk by ensuring that any interim or partial measures that they wish to have enforced in the Middle East are labeled as “awards” and are sufficiently “final” in substance.