The Dubai Court of Cassation resolves the issue of “when” should a party invoke the existence of an arbitration clause as grounds to challenge the jurisdiction of the courts

Many will recall that under the old regime (prior to the enactment of the UAE Arbitration Law (Federal Law No. 6 of 2018), parties facing claims in the local courts notwithstanding that their contracts referred to arbitration were required to ensure that they assert the existence of an arbitration clause on the very first hearing. When they failed to do so, the local courts have found that they had waived the arbitration clause. The result was unexpecting parties found themselves stuck in the local courts despite having agreed on arbitration.

Upon enactment of the UAE Arbitration Law, the provisions in the Civil Code pertaining to arbitrations were repealed. However, parties remained wary of the above scenario.

In a recent Dubai Court of Cassation decision, this issue has been explicitly addressed. In the case being reported, the Dubai Court of Cassation decided that “[…] the invocation of an arbitration clause and relying on it to contest the jurisdiction of the court need not be made on the first hearing, per se. However, it needs to be made before raising any substantive defence or arguing merits of the case”.