A8 vs B8

This case concerned the recognition and enforcement of an arbitral award within the Abu Dhabi Global Market (ADGM), despite jurisdictional objections from the defendant.

TLDR:

• A8 sought recognition and enforcement of an arbitral award.
• B8 objected, claiming the court lacked jurisdiction.
• The court dismissed B8's objections and granted A8's application.

The dispute originated from a construction contract between A8 and B8, signed on 20 November 2015, for the design and construction of a residential apartment building in Abu Dhabi. The contract stipulated that any disputes were to be settled by arbitration under ICC Rules, governed by UAE law, and seated in Abu Dhabi.

A dispute arose, leading A8 to commence arbitration proceedings against B8 on 17 June 2019. The arbitral tribunal rendered its award on 4 September 2022, directing B8 to pay AED 7,001,818.15 to A8, along with interest and other declarations/orders related to the building.

Following the award, B8 neither responded to A8's demand for payment nor made any payment. Consequently, B8 filed an application with the Abu Dhabi Judicial Department Court of Appeal (ADCA) to set aside the award, while A8 sought to ratify it. The ADCA dismissed both applications, stating it lacked jurisdiction, which now resided with the ADGM Courts due to the establishment of an ICC office in ADGM.

Both parties appealed to the Abu Dhabi Judicial Department Court of Cassation (ADCC), which dismissed the appeals, affirming that the ADGM Courts had exclusive jurisdiction. B8 then filed a 'Reversal Application' with the ADCC, which was also dismissed.

At the ADGM Courts, A8 sought recognition and enforcement of the award, while B8 challenged the court's jurisdiction. A8 argued that the Arbitration Regulations 2015 and the ADGM Founding Law granted the court jurisdiction. B8 countered that the award was not enforceable within ADGM due to a lack of assets and the 'conduit jurisdiction' issue.

The court found no grounds to refuse recognition of the award, noting that none of the exclusive grounds for refusal under section 62 of the Arbitration Regulations were applicable. The court also dismissed B8's jurisdictional objections, stating that the presence of assets was not a prerequisite for enforcement.

However, the court could not affix the 'executory formula' to the order, which would facilitate enforcement outside ADGM, due to the mandatory wording of Article 13(14) of the Amended Founding Law. The court granted recognition and enforcement of the award within ADGM but left open the possibility for A8 to seek enforcement elsewhere based on this order.

Legal representatives: Nathan Baikie of Mahmood Hussain Law Firm for the Claimant, David Russell KC and Ms Haifa Shakra of Khalid Atiq Almarri Advocates for the Defendant.

Judicial Panel: Justice William Stone SBS KC

Case Citation Reference: [2023] ADGMCFI 0015