How does the UAE build a business development ecosystem?

The UAE has long been an international hub. The UAE government is very proud to leverage the UAE’s strategic position in the Middle East and strengthen it with global connectivity, state-of-the-art infrastructure, creating an ecosystem for business development and growth unmatched in most parts of the world and increasing the visibility of business settings convenience.

Despite all these advantages for entrepreneurship and development, there are still some who express concerns about the inevitable dispute rulings that arise in any business venture. Overall, these concerns are based largely on perception rather than reality over time.

We are increasingly seeing various measures, updates and legislative reforms by the UAE government. For example, the government of Dubai has reformed the emirate as the primary jurisdiction for dispute resolution. By default, all businesses have access to Dubai courts; however, depending on the particular industry in which a particular business operates, there is the freedom to choose different forums to better complement it.

For example, we have seen that many banking disputes or issues relating to or arising from financial products are best resolved through the court system of the Dubai International Financial Center (DIFC). The DIFC Courts are a hallmark of Dubai and have developed into a global benchmark for the proper adjudication of complex and often high-value disputes.

The construction industry sets another good example. We found that the problems faced by builders of all kinds are complex in nature. Often such disputes require the support of internationally renowned jurists and experts. As a result, arbitration clauses in construction contracts have become the norm. This is because arbitration as a forum empowers parties to choose arbitrators, often industry-leading experts, to judge their cases.

Builders in the region have long been hesitant to go the arbitration route because of perceived difficulties in enforcing arbitration awards in local courts. Over the past four years or so, however, the UAE has achieved milestones in legislation to address the issue. The key change is the introduction of the UAE’s separate arbitration law. The new law creates a more streamlined process for enforcing arbitral awards, while introducing changes to bring the UAE in line with global best practice. This is a key development because now, after winning arbitration, the path to enforcement is clearer than ever.

To complement the new arbitration laws, most recently in 2021, Dubai has introduced updated rules and frameworks for arbitration and mediation issued by the Dubai International Arbitration Center (DIAC). The changes introduced by the new DIAC Rules reflect changes to encourage procedural efficiency and greater cost-effectiveness that the global arbitration community has seen over the past 15 years or so.

While arbitration and court proceedings have become more streamlined and accessible, adjudication through these formal systems is largely a nuclear option. There is reason to believe that once businesses are forced to seek such options to resolve their disputes, the chances of reviving business relationships plummet. In light of this, a welcome development is the growing popularity of institutional mediation as an alternative dispute resolution method.

Mediation has deep historical roots in the local Emirati culture. So while disputes in the UAE today are typically resolved through courts and arbitration, it is certainly not unheard of to amicably resolve multi-million dollar commercial disputes in the UAE. parliament Guided by a respected third party. Formal mediation schemes for resolving commercial disputes have also existed for some time in the UAE.

With the introduction of two new laws in 2021, the legal framework for mediation in the UAE has been strengthened to incorporate international standards, sending a strong policy signal that mediation is an important priority. The UAE also announced that it will become the 56th signatory to the Singapore Convention on Mediation.

However, this is not just in the context of the UAE’s escalating dispute settlement. There are already new laws, developments and regulations supporting the UAE as a global standard-bearer for best practice. With the launch of the UAE Blockchain Strategy 2021 and Dubai’s separate Blockchain Strategy, we are seeing a massive commitment to supporting start-ups and enterprises operating in the technology space.

The launch of the Virtual Assets Regulatory Authority (VARA) signals that the UAE is poised to take bold steps ahead of almost every other country in the world. VARA is the world’s first regulatory body dedicated solely to the regulation and control of virtual assets, which includes cryptographic assets such as cryptocurrencies, and non-fungible tokens (NFTs).

The UAE is a global business hub. Government support for the business community is further evidenced by a range of developments we are seeing at the legislative and regulatory level across industries from technology to business to finance to banking to construction and energy. Businesses can now be confident that when they do business in the UAE, they are choosing to invest in a jurisdiction that supports their interests and creates an environment for them to succeed.

Sachin Kerur is managing partner of Reed Smith Middle East