Morgan Lewis partner Sara Aranjo was quoted in a Global Arbitration Review (GAR) article about a recent ruling by Dubai’s Court of Cassation that invalidated unilateral arbitration clauses—a divergence between the United Arab Emirates’ onshore and offshore courts regarding the enforceability of such clauses. Sara highlighted that the Dubai Court of Cassation has reaffirmed its stance that unilateral arbitration clauses are invalid, which emphasized the need for clear, mutual consent in arbitration agreements under UAE law.
The ruling is “notable for showing the court’s stance has not changed following the enactment of the UAE’s Federal Arbitration Law in 2018,” said Sara, adding that it is helpful because it “affirms the continuity of the UAE onshore courts’ established stance with respect to the invalidity of asymmetrical arbitration clauses, often dubbed in the UAE legal scene as ‘non-binding clauses’.”
She further noted that onshore courts historically “rectify” such clauses by voiding them due to “inequality of rights and unconscionability,” in contrast to UAE offshore courts, which have taken a “diametrically opposite” approach by upholding them.