Arbitration proceedings in real estate law in Dubai

Arbitration plays an important role in real estate law in Dubai, especially in disputes related to property purchases, lease agreements and other property law matters. In this article, you will learn what arbitration is, how it works and what advantages it offers in the property industry.

What is arbitration?

Arbitration is an alternative dispute resolution mechanism in which the parties settle their dispute before one or more arbitrators rather than a state court. These arbitrators usually decide on the basis of legal and contractual aspects. In Dubai, arbitration is frequently used, particularly in the property sector, because it is faster, more efficient and more private than traditional court proceedings.

The arbitration process

The arbitration process can be summarised in several steps:

1. Initiation of the proceedings: one of the parties submits a written request for arbitration in which it sets out the dispute and its claims.
2. Appointment of the arbitrators: Both parties select the arbitrators. Depending on the agreement, one or more arbitrators may be appointed.
3. Hearing: The parties present their evidence and arguments to the arbitrators. This may take place in an oral hearing.
4. Decision: The arbitrators issue a binding judgement that is legally binding for both parties.
5. Enforcement: The judgement can be taken to state courts to enforce it if one of the parties does not comply voluntarily.

Advantages of arbitration in Dubai

Arbitration offers numerous advantages for both investors and property owners in Dubai:

• Speed: Arbitration proceedings are usually faster than traditional court proceedings, which is beneficial for the parties involved.
• Confidentiality: Unlike court proceedings, which are public, arbitration offers a higher degree of confidentiality.
• Flexibility: The parties can choose the arbitrator and the rules of procedure according to their needs.
• International recognition: Judgements made in arbitration proceedings are recognised in many countries, which is an advantage in cross-border real estate transactions.

Relevant legal framework

In Dubai, arbitration proceedings are supported by the Dubai Courts and the Dubai Economy. Arbitration law in the UAE is largely modern and supports the conduct of arbitration proceedings in various sectors, including real estate law.

Illustrative example on the topic: Arbitration

Imagine an investor in Dubai bought a luxury property and was dissatisfied with the quality of the construction. Despite repeated complaints to the developer, the investor did not receive a satisfactory response. In order to resolve the conflict, the parties decided to initiate arbitration proceedings. This procedure allowed both sides to present their arguments to an independent arbitrator, who reached a judgement within a few weeks. The arbitrator ruled in favour of the investor and the judgement was enforced immediately, helping both parties to save the time and costs associated with lengthy court proceedings.

Conclusion

Arbitration is a leading method of resolving property disputes in Dubai. It offers numerous advantages that make it attractive to investors and property owners. By understanding these procedures, parties can be better prepared for potential disputes and resolve them efficiently.