Consequences Of Misidentifying The Arbitration Seat On The Validity Of Arbitration Clauses

BSA LAW recently secured rulings from both the Dubai Court of First Instance and the Court of Appeal dismissing claims against our client based on the existence of an arbitration clause. We note that the courts upheld our procedural objection raised under Article 8 of Federal Law No. 6 of 2018 on Arbitration, before any defence was presented.

The opposing party argued, at both levels, that the arbitration seat identified in the clause does not exist in the named country, rendering the clause invalid. However, the Court of Appeal rejected this, clarifying when an arbitration agreement may be unenforceable due to impossibility:

• First, under Article 129 of the Civil Transactions Law, the subject matter of a contract (or a specific clause) must be possible; otherwise, the contract (or clause) is void.