Judgment dated
The facts
The Plaintiff,
The decision
The Contract contained a provision that required any dispute between the parties to be referred to and finally resolved by arbitration under the Arbitration Rules of the DIFC-LCIA Arbitration Centre ("DIFC-LCIA"), on which
Baker Hughes argued that the Contract's arbitration provision was unenforceable because the selected forum, the DIFC-LCIA, no longer existed.
The court agreed with Baker Hughes and denied
- Arbitration is a matter of a contract requiring consent and private arbitration agreements are enforced according to their terms.
- The court could not, therefore, compel arbitration where the agreed upon arbitration tribunal is unavailable or no longer exists.
- The
Dubai government could not rewrite the agreement of the parties and order that the arbitration be held in a forum to which the parties did not contractually agree.Dynamic Industries had argued that the court could, nonetheless, order Baker Hughes to arbitrate its claims againstDynamic Industries in theDIAC , stating that theDubai government issued a decree which dissolved the DIFC-LCIA and "transferred [its] assets, rights and obligations" to theDIAC , and "expressly stated that DIFC-LCIA arbitration agreements entered into before the effective date of [the decree] are deemed valid".
Accordingly, the court found that no enforceable forum selection clause in the Contract could compel the dismissal of the case on the ground of "forum non conveniens", and
Analysis
This decision is a useful guide for any party to a contract that contains an arbitration clause pursuant to which disputes are referred and resolved by arbitration under the DIFC rules. Whilst in such cases a party may claim that the reference should be made to
Footnote
1. Decree 34 of 2021
International Quarterly is produced quartely by
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Mr
71-91
WC2B 4HN
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