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Dubai Court of Appeal finds in favour of Hong Kong shipowner

Dubai Court of Appeal finds in favour of Hong Kong shipowner
Dubai’s efforts to cement its status as a maritime hub received a fillip recently when lawyers from international practice Holman Fenwick Willan (HFW) obtained a judgment ordering the recognition and enforcement of a London arbitration award in the UAE.

HFW, represented by its Dubai-based Middle East shipping team, led by partner Yaman Al Hawamdeh and Associate Anas Al Tarawneh, secured an initial judgement from the Dubai Court of Appeal that will be seen as a bellwether of the even-handedness of the Dubai courts system. The Court of Appeal judgement is currently itself under appeal, HFW said.

The background to the case gives rise to optimism that the UAE authorities could be readier to deal with disputes on the international shipping market, without an overwhelming likelihood that they will automatically find in favour of local business interests, a key plank of the reforms which several legal actors based in Dubai have been calling for.

Several factors complicated the case. The UAE ratified the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) in 2006. The case involved a Hong Kong-based shipping company (the claimant) and a Dubai-based company (the defendant), which hired a vessel form the former for a period of 59-62 months. An exchange of emails between the two parties initially satisfied the Dubai Court of First Instance, in early 2014, that the defendant did not have a case to answer under the UAE Civil Procedures Law (CPL).

However, in May 2015, the Dubai Court of Appeal found in favour of the claimant, overturning the judgement of the Court of First Instance and "[ordering] the recognition and enforcement of the Claimant’s London arbitration award," HFW said.

It said that as a matter of the New York Convention and English law, the parties had agreed to arbitration in their original email exchanges, and therefore the award should be recognised in accordance with the New York Convention.

“Whilst the Court of Appeal judgment is currently under appeal, it nevertheless sets a very encouraging precedent in the UAE which supports the aim and the spirit of the New York Convention,” the HFW press release said.

Dubai is also keen to set up a maritime arbitration centre, but it is unclear when such a move will become official. The Fujairah Court of First Instance ordered enforcement of a foreign award in the UAE under the New York Convention in 2010.

“This judgment is of particular significance as it confirms that UAE courts should consider the validity of the underlying arbitration clause in the context of the New York Convention and the foreign law governing the contract,” said an HFW press release.

“The judgment is also the first of its kind ordering the recognition and enforcement of a foreign arbitral award made on the basis of an unsigned charterparty.”