Unraveling Federal Decree Law No. 40 of 2023 concerning Mediation and Conciliation in Civil and Commercial Dispute.

By  Timaf Yacoub

By Timaf Yacoub

In a significant stride toward enhancing the efficiency and effectiveness of dispute resolution mechanisms, the United Arab Emirates (UAE) has enacted Federal Decree Law No. 40 of 2023, groundbreaking legislation addressing Mediation and Conciliation in Civil and Commercial Disputes. Effective on December 29th, 2023, this legal milestone serves as a refinement of the mediation and conciliation frameworks previously enforced in the nation namely Federal Law No. 6 of 2021.

A pivotal facet of this legislation is the delegation of responsibility for establishing mediation and conciliation centers within the Court of First Instance to the Federal Judiciary or the local judicial authority. Noteworthy provisions within the decree emphasize accessibility and ease by introducing online platforms for conducting mediation and conciliation proceedings. This article endeavors to dissect the intricacies of Federal Decree Law No. 40 of 2023, shedding light on its implications and nuances.
In a significant stride toward enhancing the efficiency and effectiveness of dispute resolution mechanisms, the United Arab Emirates (UAE) has enacted Federal Decree Law No. 40 of 2023, groundbreaking legislation addressing Mediation and Conciliation in Civil and Commercial Disputes. Effective on December 29th, 2023, this legal milestone serves as a refinement of the mediation and conciliation frameworks previously enforced in the nation namely Federal Law No. 6 of 2021.

A pivotal facet of this legislation is the delegation of responsibility for establishing mediation and conciliation centers within the Court of First Instance to the Federal Judiciary or the local judicial authority. Noteworthy provisions within the decree emphasize accessibility and ease by introducing online platforms for conducting mediation and conciliation proceedings. This article endeavors to dissect the intricacies of Federal Decree Law No. 40 of 2023, shedding light on its implications and nuances.

I. The Role of Mediation and Conciliation

I. The Role of Mediation and Conciliation

Within the expansive scope of dispute resolution outlined in Federal Decree Law No. 40 of 2023, mediation emerges as a consensual and facilitated process crucial for achieving voluntary and mutually acceptable resolutions. In this collaborative framework, an impartial third party, known as the mediator, guides disputing parties through structured communication and negotiation. The legislation, encapsulated in Article 9,[1] delineates the diverse forms that a Mediation Agreement may assume. This includes its incorporation either before a dispute arises, either as a standalone agreement or as part of a pre-existing contract, or after a dispute surfaces, even if a lawsuit is already in progress.

Crucially, the law specifies that the authority to enter into a Mediation Agreement extends to individuals with legal capacity or an authorized representative of a legal entity. Furthermore, it establishes the enduring validity of such agreements, remaining unaffected even in the event of a party’s demise or loss of legal status, unless explicitly agreed otherwise.

The requirements for a valid Mediation Agreement, as stipulated in the decree, mandate that it be in written form and signed by the involved parties. Notably, the agreement may manifest in various forms, ranging from formal contracts to more informal agreements, exchanged letters, electronic messages in compliance with electronic transaction laws, or even be recorded in court minutes. Additionally, explicit mention or reference to a model contract within a broader agreement is deemed a valid inclusion of mediation clauses.

Conciliation, mirroring mediation in its objective of fostering communication and understanding between disputing parties, distinguishes itself by the potential for a more active role played by the conciliator in proposing solutions. Despite this nuanced difference, both mediation and conciliation share the overarching goal of amicably resolving conflicts, whether preemptively or at any stage during legal proceedings. Together, they form an integral part of the UAE’s commitment to providing versatile and effective mechanisms for dispute resolution.
Within the expansive scope of dispute resolution outlined in Federal Decree Law No. 40 of 2023, mediation emerges as a consensual and facilitated process crucial for achieving voluntary and mutually acceptable resolutions. In this collaborative framework, an impartial third party, known as the mediator, guides disputing parties through structured communication and negotiation. The legislation, encapsulated in Article 9,[1] delineates the diverse forms that a Mediation Agreement may assume. This includes its incorporation either before a dispute arises, either as a standalone agreement or as part of a pre-existing contract, or after a dispute surfaces, even if a lawsuit is already in progress.

Crucially, the law specifies that the authority to enter into a Mediation Agreement extends to individuals with legal capacity or an authorized representative of a legal entity. Furthermore, it establishes the enduring validity of such agreements, remaining unaffected even in the event of a party’s demise or loss of legal status, unless explicitly agreed otherwise.

The requirements for a valid Mediation Agreement, as stipulated in the decree, mandate that it be in written form and signed by the involved parties. Notably, the agreement may manifest in various forms, ranging from formal contracts to more informal agreements, exchanged letters, electronic messages in compliance with electronic transaction laws, or even be recorded in court minutes. Additionally, explicit mention or reference to a model contract within a broader agreement is deemed a valid inclusion of mediation clauses.

Conciliation, mirroring mediation in its objective of fostering communication and understanding between disputing parties, distinguishes itself by the potential for a more active role played by the conciliator in proposing solutions. Despite this nuanced difference, both mediation and conciliation share the overarching goal of amicably resolving conflicts, whether preemptively or at any stage during legal proceedings. Together, they form an integral part of the UAE’s commitment to providing versatile and effective mechanisms for dispute resolution.

II. Registration, Appointment, and Procedure

II. Registration, Appointment, and Procedure

The regulation extends its purview to the critical aspect of registering and appointing competent mediators and conciliators. The responsibility for maintaining this roster lies with the Department or local judicial authority, encompassing individuals from the Ministry of Justice’s experts’ schedule or local judicial authorities. Furthermore, the law welcomes the inclusion of Expert Mediators appointed by the Council or local judicial authority, drawing from a pool of distinguished professionals such as retired judges, lawyers with a minimum of five years’ experience, and other highly qualified international experts renowned for their expertise, integrity, and impartiality.

The conditions and procedures governing the registration process are judiciously determined by the Council or local judicial authority, covering aspects such as registration, renewal, selection, and removal of Mediators. Prospective mediators must submit a formal application on the designated form to the Supervising Judge, accompanied by the Mediation Agreement and relevant documents pertaining to the dispute. The application entails a commitment to attend sessions and furnish necessary information or documents, alongside a clear articulation of the dispute subject. Parties are empowered to select a Private Mediator from the registered Mediators’ Lists and agree on a Mediation period, initially capped at three months, extendable once with mutual consent and approval from the Supervising Judge. During this period, the court judiciously suspends the case, awaiting the outcome of the mediation process.

Distinguishing between enrolled mediators and private mediators, the legislation also permits the establishment of private mediation centers and branches of foreign mediation centers within the UAE, promoting a diverse array of options for dispute resolution.

Turning attention to conciliators, their appointment and qualification conditions are meticulously defined by the chairman of the Council or the local judicial authority. These conditions encompass criteria such as maintaining capacity, lack of conviction for specific crimes, integrity, neutrality, and successful completion of specified courses and examinations. The Minister or local judicial authority holds the authority to appoint or delegate conciliators, who, upon appointment, take a legal oath before the president of the circuit.

A distinctive compensation scheme for conciliators is established based on the proposal of the Council or the local judicial authority. The conciliation process culminates with the parties’ agreement on a Settlement Agreement, their mutual decision to discontinue, the conciliator’s notification of non-feasibility, or the natural expiration of the conciliation period. In cases where conciliation proves unsuccessful, the parties are briefed, and the dispute file is then referred to the competent court, embodying a clear procedural framework underlining the efficiency and accountability of the UAE’s dispute resolution mechanisms. The regulations additionally institute stringent restrictions on both mediators and conciliators regarding conflicts of interest, as outlined in Article 6,[1] reinforcing the ethical underpinnings of the mediation and conciliation processes. [1]  Federal Decree Law No. 40 of 2023 concerning Mediation and Conciliation in Civil and Commercial Dispute.
The regulation extends its purview to the critical aspect of registering and appointing competent mediators and conciliators. The responsibility for maintaining this roster lies with the Department or local judicial authority, encompassing individuals from the Ministry of Justice’s experts’ schedule or local judicial authorities. Furthermore, the law welcomes the inclusion of Expert Mediators appointed by the Council or local judicial authority, drawing from a pool of distinguished professionals such as retired judges, lawyers with a minimum of five years’ experience, and other highly qualified international experts renowned for their expertise, integrity, and impartiality.

The conditions and procedures governing the registration process are judiciously determined by the Council or local judicial authority, covering aspects such as registration, renewal, selection, and removal of Mediators. Prospective mediators must submit a formal application on the designated form to the Supervising Judge, accompanied by the Mediation Agreement and relevant documents pertaining to the dispute. The application entails a commitment to attend sessions and furnish necessary information or documents, alongside a clear articulation of the dispute subject. Parties are empowered to select a Private Mediator from the registered Mediators’ Lists and agree on a Mediation period, initially capped at three months, extendable once with mutual consent and approval from the Supervising Judge. During this period, the court judiciously suspends the case, awaiting the outcome of the mediation process.

Distinguishing between enrolled mediators and private mediators, the legislation also permits the establishment of private mediation centers and branches of foreign mediation centers within the UAE, promoting a diverse array of options for dispute resolution.

Turning attention to conciliators, their appointment and qualification conditions are meticulously defined by the chairman of the Council or the local judicial authority. These conditions encompass criteria such as maintaining capacity, lack of conviction for specific crimes, integrity, neutrality, and successful completion of specified courses and examinations. The Minister or local judicial authority holds the authority to appoint or delegate conciliators, who, upon appointment, take a legal oath before the president of the circuit.

A distinctive compensation scheme for conciliators is established based on the proposal of the Council or the local judicial authority. The conciliation process culminates with the parties’ agreement on a Settlement Agreement, their mutual decision to discontinue, the conciliator’s notification of non-feasibility, or the natural expiration of the conciliation period. In cases where conciliation proves unsuccessful, the parties are briefed, and the dispute file is then referred to the competent court, embodying a clear procedural framework underlining the efficiency and accountability of the UAE’s dispute resolution mechanisms. The regulations additionally institute stringent restrictions on both mediators and conciliators regarding conflicts of interest, as outlined in Article 6, reinforcing the ethical underpinnings of the mediation and conciliation processes.

III. Restrictions and Ethical Guidelines

III. Restrictions and Ethical Guidelines

Beyond the encompassing realm of mediation and conciliation, Federal Decree Law No. 40 of 2023 delineates explicit boundaries and restrictions for those involved in these alternative dispute resolution processes. Notably, individuals engaged in mediation or conciliation are expressly barred from assuming roles as arbitrators or lawyers in subsequent disputes involving any party connected to the mediated or conciliated issue. This prohibition endures even after the resolution process concludes, underscoring the commitment to impartiality and the prevention of conflicts of interest unless all parties involved provide their explicit consent.

Moreover, individuals participating in mediation or conciliation are precluded from testifying against any party involved in the mediated or conciliated dispute unless express permission is granted by the concerned parties or in cases related to criminal offenses. This stands in stark contrast to adversarial processes in arbitration and court proceedings, reinforcing the distinct nature of mediation and conciliation, which inherently requires the consent of both parties. Notably, if the respondent does not cooperate, the mediation process cannot proceed, placing a premium on the voluntary nature of these dispute resolution mechanisms.

Additionally, the regulations prescribe a stringent limitation on familial involvement in mediation or conciliation processes. A mediator or conciliator is prohibited from participating in a dispute involving a spouse or a relative up to the fourth degree by blood or marriage, further ensuring the integrity and impartiality of the resolution process.

Article 14 of the regulations introduces a pivotal principle, stating that mediation won’t be considered if conciliation has previously been attempted. Similarly, if mediation was previously employed to settle a dispute, the regulations mandate that the matter will not be redirected to conciliation. This provision underscores the commitment to avoiding duplication of efforts and emphasizes a clear procedural path for the resolution of disputes, aligning with the overall objective of creating an effective and streamlined framework for dispute resolution within the UAE.
Beyond the encompassing realm of mediation and conciliation, Federal Decree Law No. 40 of 2023 delineates explicit boundaries and restrictions for those involved in these alternative dispute resolution processes. Notably, individuals engaged in mediation or conciliation are expressly barred from assuming roles as arbitrators or lawyers in subsequent disputes involving any party connected to the mediated or conciliated issue. This prohibition endures even after the resolution process concludes, underscoring the commitment to impartiality and the prevention of conflicts of interest unless all parties involved provide their explicit consent.

Moreover, individuals participating in mediation or conciliation are precluded from testifying against any party involved in the mediated or conciliated dispute unless express permission is granted by the concerned parties or in cases related to criminal offenses. This stands in stark contrast to adversarial processes in arbitration and court proceedings, reinforcing the distinct nature of mediation and conciliation, which inherently requires the consent of both parties. Notably, if the respondent does not cooperate, the mediation process cannot proceed, placing a premium on the voluntary nature of these dispute resolution mechanisms.

Additionally, the regulations prescribe a stringent limitation on familial involvement in mediation or conciliation processes. A mediator or conciliator is prohibited from participating in a dispute involving a spouse or a relative up to the fourth degree by blood or marriage, further ensuring the integrity and impartiality of the resolution process.

Article 14 of the regulations introduces a pivotal principle, stating that mediation won’t be considered if conciliation has previously been attempted.[1] Similarly, if mediation was previously employed to settle a dispute, the regulations mandate that the matter will not be redirected to conciliation. This provision underscores the commitment to avoiding duplication of efforts and emphasizes a clear procedural path for the resolution of disputes, aligning with the overall objective of creating an effective and streamlined framework for dispute resolution within the UAE. [1]  Federal Decree Law No. 40 of 2023 concerning Mediation and Conciliation in Civil and Commercial Dispute.

IV. Online Mediation and Conciliation Platforms

IV. Online Mediation and Conciliation Platforms

In acknowledgment of the dynamic shifts within the realm of dispute resolution, Federal Decree Law No. 40 of 2023 introduces progressive provisions catering to the digital age – online mediation and conciliation platforms. This forward-looking dimension signifies a pivotal step towards fostering a more adaptive and accessible alternative, particularly catering to the needs of parties unable to participate physically in mediation sessions. The integration of online platforms into the legal framework underscores a resolute commitment to harnessing technological advancements in the service of effective dispute resolution.

This embrace of digital avenues aligns with the contemporary landscape, where connectivity and virtual interactions have become integral facets of daily life. The law’s recognition of online mediation and conciliation platforms underscores an awareness of the changing dynamics in legal proceedings, offering a flexible solution that accommodates diverse circumstances.
In acknowledgment of the dynamic shifts within the realm of dispute resolution, Federal Decree Law No. 40 of 2023 introduces progressive provisions catering to the digital age – online mediation and conciliation platforms. This forward-looking dimension signifies a pivotal step towards fostering a more adaptive and accessible alternative, particularly catering to the needs of parties unable to participate physically in mediation sessions. The integration of online platforms into the legal framework underscores a resolute commitment to harnessing technological advancements in the service of effective dispute resolution.

This embrace of digital avenues aligns with the contemporary landscape, where connectivity and virtual interactions have become integral facets of daily life. The law’s recognition of online mediation and conciliation platforms underscores an awareness of the changing dynamics in legal proceedings, offering a flexible solution that accommodates diverse circumstances.

FINAL REMARKS

FINAL REMARKS

Federal Decree Law No. 40 of 2023 marks a significant advancement in the UAE’s dispute resolution landscape. This legislation addresses Mediation and Conciliation in Civil and Commercial Disputes, replacing the previous federal mediation law. Key features include the delegation of responsibility for mediation and conciliation centers to the Federal Judiciary or local judicial authorities, emphasizing accessibility through online platforms.

Mediation, outlined in Article 9, is a consensual process, offering flexibility in various forms, while conciliation complements this approach. The law also focuses on registering and appointing qualified mediators and conciliators, ensuring transparency and ethical standards.

Additionally, the legislation adapts to the digital age, incorporating online mediation and conciliation platforms for enhanced accessibility. Overall, Federal Decree Law No. 40 of 2023 reflects a progressive approach, providing efficient and modernized mechanisms for resolving disputes in the UAE.
Federal Decree Law No. 40 of 2023 marks a significant advancement in the UAE’s dispute resolution landscape. This legislation addresses Mediation and Conciliation in Civil and Commercial Disputes, replacing the previous federal mediation law. Key features include the delegation of responsibility for mediation and conciliation centers to the Federal Judiciary or local judicial authorities, emphasizing accessibility through online platforms.

Mediation, outlined in Article 9, is a consensual process, offering flexibility in various forms, while conciliation complements this approach. The law also focuses on registering and appointing qualified mediators and conciliators, ensuring transparency and ethical standards.

Additionally, the legislation adapts to the digital age, incorporating online mediation and conciliation platforms for enhanced accessibility. Overall, Federal Decree Law No. 40 of 2023 reflects a progressive approach, providing efficient and modernized mechanisms for resolving disputes in the UAE.

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