DIFC And Abu Dhabi Courts Uphold DIFC-LCIA Arbitration Agreements

SUMMARY

The Dubai International Financial Centre ("DIFC") court in Narciso v Nash has confirmed the validity of an agreement providing for arbitration under the now defunct DIFC-LCIA, endorsing another recent decision by the Abu Dhabi courts in Vaned Engineering GMBH v Reem Hospital. Until recently, it was unclear how the UAE onshore and freezone courts would treat such arbitration agreements, following Decree No. 34/2021 (the "Decree"), which abolished the DIFC-LCIA and transferred all rights and obligations to the Dubai International Arbitration Centre ("DIAC").

Given these rulings, it is clear that the UAE onshore and freezone courts are keen to uphold the validity of such arbitration agreements, with DIAC replacing the DIFC-LCIA as the arbitral institution, as envisaged under the Decree. The takeaway for parties is that they cannot seek to avoid arbitration by arguing that the arbitration agreement referring to the DIFC-LCIA has been rendered invalid by