If your contract has a UAE arbitration clause, it is worth re-reading. In 2021 the rules changed, and old clauses now lead somewhere other than where they say.
What happened
Decree No. 34 of 2021 (published 14 September, in force 20 September 2021) abolished the DIFC-LCIA and EMAC and transferred their cases to DIAC — the Dubai International Arbitration Centre. Since 21 March 2022 DIAC operates under the new DIAC Rules 2022, which replaced the 2007 rules.
What it means for old contracts
- Agreements referring to the DIFC-LCIA or EMAC are treated as valid (Article 6 of the Decree)
- DIAC replaces those centres for the resolution of disputes, unless the parties agree otherwise
- New cases run under the DIAC Rules 2022, in force since 21 March 2022; the Decree itself (Article 8) only kept the old rules alive until DIAC adopted new ones
- DIFC-LCIA cases commenced and registered on or before 20 March 2022 are administered by the LCIA from London under the DIFC-LCIA Rules, under the DIAC–LCIA arrangement of March 2022; cases commenced on or after 21 March 2022 are registered and administered by DIAC
What to do now
- Re-read the arbitration clauses in all live contracts
- Understand that a dispute will run under the DIAC Rules 2022, not the rules you had in mind when signing
- Draft new clauses for the current configuration
- Check the seat: DIAC has its headquarters in Dubai and a branch in the DIFC, and the seat determines the procedural regime — "onshore" Dubai or the DIFC with its common-law framework
Enforceability abroad
For an international business this is often the main question. The UAE is a party to the New York Convention of 1958, as are most of its trading partners, so a DIAC award is in principle enforceable abroad and a foreign award is enforceable in the UAE. Court judgments travel less easily. That is one more reason for a contract with a UAE counterparty to carry a working arbitration clause rather than an inherited one.
There is a caveat that is rarely mentioned. Inside the UAE the substitution of DIAC for the DIFC-LCIA rests on the Decree; a court outside the UAE may read an inherited clause differently. In the United States a district court refused in 2023 to compel arbitration under a DIFC-LCIA clause, treating that forum as unavailable; the Fifth Circuit reversed on 27 January 2025 (Baker Hughes Saudi Arabia v. Dynamic Industries) and sent the case back to establish which forum is available — the LCIA, DIAC or another. The outcome turns on the wording of the clause and on the court of the country where the award must be enforced. If the counterparty's assets sit outside the UAE, that is the main reason to re-sign the clause rather than rely on the automatic transfer.
What needs checking
All live contracts for the arbitration clause, its date and its wording. Contracts signed before September 2021 with a DIFC-LCIA reference need particular attention: a new dispute under them goes to DIAC under the 2022 rules. Clauses copied from home-country templates are looked at separately: a reference to arbitration in your home country in a contract with a UAE company works only if both parties consciously wanted it and understand how the award will be enforced.
What to do right now
Open the live contracts and find the arbitration clause. If it says DIFC-LCIA or EMAC, understand that the dispute will go to DIAC under the DIAC Rules 2022. That does not invalidate the clause, but it changes the procedure, the timeline and the cost. For key contracts it is sensible to re-sign the clause by agreement — while there is no dispute.
Frequently asked questions
Is my DIFC-LCIA clause invalid?
Under UAE law it is treated as valid — but it leads to DIAC under the DIAC Rules 2022. That is not the same thing you agreed to. If the award has to be enforced outside the UAE, the position depends on the court of that country — see the US practice above.
Can the clause be changed?
By agreement of the parties — yes. It is sensible to do this before a dispute, not during one.
For a new contract, DIAC or a foreign seat?
It depends on where the counterparty's assets are and where the award will have to be enforced. For a dispute with a UAE company holding assets in the UAE, arbitration in the UAE is usually more practical; for an international chain, we assess separately.
This is a general framework, not legal advice. UAE law changes, and procedures differ between emirates and free zones. We review each situation individually.