Judgment: Arbitration and the Court's Jurisdiction

Analysis

The courts in the UAE will not hear an action if the parties have agreed to refer the matter to arbitration.

Facts of the case:

The Claimant in this case brought court proceedings against the Defendant, seeking an order from the Court requiring the Defendant to pay the sum of AED 6,620,000 plus the legal interest accrued as of 6/4/1996 until payment is made in full.

The parties had entered into contracts, pursuant to which the Defendant was required to pay the Claimant commission in respect of services provided by the Claimant.

Further, the Claimant argued that the Defendant had terminated the last contract without justification, causing the Claimant to incur financial and moral losses estimated at AED 500, 000.

The Defendant argued that the Court did not have jurisdiction due to the existence of an arbitration clause. The Claimant filed a precautionary application requesting that the case be transferred to arbitration and that it is supervised by the court.

The lower court issued a judgment confirming that it did not have jurisdiction due to the existence of the arbitration clause and accordingly, the Claimant's objection on jurisdictional points was dismissed.