Dubai Court Judgment Concerning Severability and Public Policy in Arbitral Awards

Analysis

For the past two years, the Dubai Court of Cassation has issued a series of rulings concerning the limit of arbitrators to deal with matters of public policy.

Most of these cases have arisen from real estate disputes in which the purchaser of an off-plan unit has sued the developer on the basis that the unit was not registered and accordingly the sale invalid. The court has repeatedly held that issues of property registration are not arbitral and any award upholding such a claim is to be annulled.

In a recent a case the Dubai Court of Cassation has underlined this principle by explaining that even if the award is justified on other grounds, if the award contains a determination on a matter of public policy, the entire award will be annulled and not just the decision concerning public policy.

Severability

The Dubai Court of Cassation has in the past severed elements of an arbitral award which the court found the Tribunal did not have jurisdiction to make.