Presently the whole wide world is concerned about the impact of coronavirus
on the economy and certain other specific sectors, wherein the impact on
arbitration agreements would be today's discussing topic by Arbitration Lawyers
In a recent article, our legal consultants have discussed the aspect of whether
impact of corona virus is a force majeure event within the parameters of UAE
Civil Transactions Law. Accordingly, we are of the opinion that the Pandemic
fulfills the principal state of a force majeure (for example it isn't
predictable) as long as the parties have gone into the agreement prior to the
time when World Health Organization declared COVID-19 as a pandemic.
In any case, so as to effectively drop one's commitments under an agreement by
conjuring ‘force majeure' a party must likewise demonstrate the commitments of
an agreement are difficult to act in this period of the Pandemic; to do
so a party must fulfill the second condition that is the effect of the situation
was unavoidable and has rendered the particular commitment or the agreement's
commitments difficult to perform.
This, in our view, will basically depend on the prudent steps taken by the
experts in reacting to the Pandemic and whether such measures would render the
presentation of the obligation(s) outlandish; and to what degree.
The Agreements to enter into arbitration for dispute resolution, like any other
agreements, are dependent upon the force majeure rule and might be ended by the
activity of law should a force majeure occasion makes the performance of the
contract or agreement impossible to perform.
In such manner, Article 8.1 of the UAE Federal Law no. 6 of 2018 on Arbitration
(UAE Arbitration Law) which allows the court authorities to reject a case
(which shall be subject to arbitration as per the agreement) or application
filed by a defendant, unless the agreement for arbitration is void or impossible
It shows up from the wording of Article 8.1 of the UAE Arbitration Law that
arbitration agreement won't just be ended by operation of law if there should be
an occurrence of a force majeure occasion (which is unforeseeable and brings
about outright difficulty) yet in addition if there should be any occasion which
renders the exhibition of the arbitration proceedings outlandish whether such
occasion is unforeseeable or not.
In such regards, we can mention that arbitration agreement, in contrast to
different understandings, can be terminated by the provision of law in the event
of an occasion that makes its exhibition incomprehensible regardless of whether
such an occasion qualifies as force majeure (for example unforeseeable) or not.
The explanation, in our view, for a difference can be credited to the idea of
the arbitration agreements which offers equal rights to both parties for
Along these lines, the gatherings may not be kept from approaching equity in
light of the fact that the accidental occasion, which settles on the exhibition
of an arbitration agreement incomprehensible, yet unanticipated.