Witness Evidence in Arbitration: A Recent Decision of the Dubai Court of Cassation
Judgment
John GaffneySenior Counsel,Dispute Resolution
Malak NasreddineAssociate,Dispute Resolution
In a recent case before the Dubai Courts on the ratification of an arbitral award issued by an arbitral tribunal under the 2007 rules of arbitration of the Dubai International Arbitration Centre (“DIAC”), the courts invalidated the award on the basis that the witness testimony on which the arbitral tribunal relied was not given on oath. This article reviews the courts’ approach and reasoning in invalidating the award.
Article 17(1) of the 2007 DIAC Arbitration Rules, as approved by Decree No. (11) of 2007 (“DIAC Rules 2007”), states that:
“The proceedings before the Tribunal shall be governed by these Rules and, where these Rules are silent, by any rules which the parties or, failing them, the Tribunal may determine."
Article (29)(7) of the DIAC Rules 2007 states that: "The Tribunal shall require witnesses to swear an oath before the Tribunal before giving evidence in accordance with any mandatory provisions of the applicable procedural law."
Article (33)(7) of Law No. 6 of 2018 (“Federal Arbitration Law”) stipulates that:
"Unless otherwise agreed by the Parties, the hearing of witnesses, including experts, shall be conducted under the laws of the State."
Article (53)(1)(g) of the Federal Arbitration Law provides that:
"An arbitral award can only be challenged by an action for setting aside before the Court or during the pendency of an application to confirm the award. The party seeking to set aside the award must establish any of the following circumstances:
[...]g. that the arbitral proceedings were marred by irregularities that affected the award […]”.
Articles (43)(1) and (46) of Law No. 10 of 1992 (“the Evidence Law”), as amended, requires that in giving testimony, (a) the witness must testify an oath according to his religion, (b) the oath shall be taken before giving testimony, and (c) the witness must be subject to criminal penalties if he refrains from testifying the oath or answering the questions put to him by the judge, or if it is proven that he gave false testimony.
On 14 November 2021, the Dubai Court of Appeal issued an Order on Petition No. 128 of 2021 approving an Arbitration Award issued on 7 October 2020 by an arbitral tribunal constituted under the DIAC Rules 2007 in DIAC Case No. 73 of 2020.
The Appellant filed an appeal by way of grievance No. 25 of 2021. The Appellant also filed Case No. 49 of 2021 before the Court of Appeal. In both cases, it sought to overturn the Order on Petition and a finding that the arbitration award was invalid.
On 2 February 2022, the Court of Appeal rejected Appeal No. 25 of 2021 and Case No. 49 of 2021.
The Appellant successfully appealed the Court of Appeal’s decisions before the Court of Cassation under Case No. 78 of 2021 (appealing the decision in Case No. 49 of 2021) and Case No. 96 of 2022 (appealing the decision in Appeal No. 25 of 2021).
“…unless the parties agree otherwise, the hearing of witnesses, including experts, must be conducted in accordance with the laws in force in the State.”
The Appellant argued that the Court of Appeal misapplied the law because it disregarded the invalidity of the award as a result of the failure of the witnesses to testify on oath before the arbitral tribunal in contravention of the DIAC Rules 2007. The Court of Cassation agreed with the Appellant.
In giving its judgment, the Court of Cassation observed:
First, the applicable procedures before an arbitral tribunal are subject to the provisions of the appliable institutional rules, failing which the arbitral procedures are subject to any rules agreed upon or binding on the parties or decided by the arbitral tribunal if they do not contravene the judicial provisions of the applicable laws in force in the state.
Second, unless the parties agree otherwise, the hearing of witnesses, including experts, must be conducted in accordance with the laws in force in the State.
Third, a witness must testify on oath according to his or her religion, and the oath must be given before giving testimony. (The witness must be subject to criminal penalties if he refrains from testifying on oath or answering the questions put to him by the arbitral tribunal, or if it is proven that he gave false testimony.)
In the present case, the Court of Cassation noted that the applicable rules (i.e., the DIAC Rules 2007) required that the witnesses testify an oath before the arbitral tribunal before authorizing their testimony to proceed. As a result, an arbitration award will be invalid if it is based on the statements of witnesses who did not take an oath before giving their testimony.
Furthermore, although the arbitral tribunal specified in a procedural order that the witnesses would make an oath before the tribunal in accordance with the applicable laws, the minutes of the hearing did not contain any record of the witnesses having taken an oath before they testified.
Hence, the arbitral procedure was invalid. This adversely affected the arbitration award, which relied upon, and emphasised the importance of, the witnesses’ testimony, which it stated were necessary and decisive in clarifying the facts of the case on which the award was based. Consequently, the Court of Cassation revoked the arbitral award as null and void.
The Court of Cassation’s decision is a timely clarification and reminder that, to avoid a successful challenge of onshore arbitral awards made under the DIAC Rules 2007:
Factual and expert witnesses should be required to swear an oath in accordance with UAE law.
The oath should be made according to the witness’s religion and in advance of giving testimony.
The transcript of the hearing, if one is taken, and the arbitral award should record that the evidence was given under oath.
It remains to be seen if the UAE courts will adopt the same approach in cases governed by other institutional rules, which do not expressly stipulate that witness testimony must be given under oath including the DIAC Rules 2022, which provide at Article 27.6 that “[t]he Tribunal may [rather than “shall’] require any witness … to swear an oath prior to giving oral evidence”.
For further information,please contact John Gaffney and Malak Nasreddine.
Published in March 2023
