On 20 September 2021, the Dubai Government issued Decree No. 34 of 2021 (Decree), which has brought about significant change to Dubai's dispute resolution sector by reforming the city's arbitration institutions.

The Decree abolishes the Emirates Maritime Arbitration Centre (EMAC) and the Dubai International Financial Centre Arbitration Institute (DAI) (together referred to as the Abolished Arbitration Centres). The aim of this is to have the Dubai International Arbitration Centre (DIAC) as the single unified arbitration centre in Dubai. As the DAI operates the DIFC-LCIA Arbitration Centre (together with the London Court of International Arbitration), the abolishment of the DAI effectively means that the DIFC-LCIA Arbitration Centre will cease to exist in its current form.

Properties, employees, finances, arbitrators and members affiliated with the Abolished Arbitration Centres are to be transferred to DIAC by 20 March 2022. The new reformed DIAC will be headquartered in Dubai, and will also have a branch in the DIFC. We expect that DIAC will issue revised arbitration rules in due course, as DIAC has not updated its rules since 2007.

The key points to note are:

• Any proceedings currently being administered by the Abolished Arbitration Centres will continue pursuant to their applicable rules, however DIAC will take over the supervision of such cases.
• Any contracts that were concluded up to 20 September 2021 which provide for disputes to be resolved pursuant to the DIFC-LCIA rules will be considered as valid and effective. However, DIAC will replace the DIFC-LCIA Arbitration Centre (or EMAC) as the arbitration institute administering proceedings in disputes that arise under such contracts, unless otherwise agreed by the parties. The Decree does not specify which arbitral rules will apply, however it may be prudent to assume that DIAC's arbitration rules will be applied.
• Parties currently in the process of negotiating contracts will no longer be able to opt for DIFC-LCIA arbitration in their dispute resolution clauses. Parties will need to consider alternative options when opting to include an arbitration clause in their contracts.
• Parties with existing contracts containing DIFC-LCIA arbitration clauses may wish to consider agreeing amendments to their arbitration agreements, until further details are known about how the new DIAC is likely to operate and whether updated arbitration rules will be issued.