The role of state courts in international arbitration: a comparison between Sudan and the UAE
Aztan Law Firm, Khartoum
Source of law
Similar to the situation in all Arab countries, the UAE is a civil law jurisdiction. Most of its laws are derived from the Jordanian and Egyptian laws which, in turn, are heavily influenced by the French civil law system.
The exception, among Arab countries, is Sudan which is the only Arab country that follows the system of common law. The stare decisis doctrine is strictly respected by courts in Sudan. To date, in the absence of a Sudanese precedent governing a certain issue, English judicial precedents apply.
Powers of arbitral tribunals
Prior to May 2018, arbitration in the UAE was governed and regulated by the Civil Procedures Law 1992. This legislation was silent with respect to the power of an arbitral tribunal to issue interim measures. That could be construed to indicate not allowing tribunals to issue them. This construction of the law was upheld by the Dubai Court of Cassation which held in one case that in the absence of the parties’ agreement in the arbitration clause to empower the arbitrators to issue interim measures, such powers shall not vest on the arbitrators.
The case in Sudan is similar to that in UAE. Before 2005, arbitration in Sudan was governed and regulated by the Civil Procedures Act 1983. The abolished Civil Procedures Act 1974, as well as the 1983 Act, were also silent regarding the power of an arbitral tribunal to grant provisional remedies. A full search of Sudan’s law journals and reports from 1956 to 2005 do not turn up a single precedent similar to the UAE Dubai Court of Cassation case.
The Abu Dhabi Supreme Court reached the same conclusion of Dubai Court of Cassation. In the case of Petition No 118 of 2014, Abu Dhabi Court of Cassation dated 26 March 2014, the Court held that:
‘in the absence of a specific agreement of the parties in the main contract or in a submission agreement, arbitrator(s) do not have power to order interim, conservatory or summary relief. […] the parties’ agreement to arbitrate any disputes concerning the interpretation or performance of the main contract would not give the arbitrators the authority or jurisdiction to order such measures or relief. In such instance, the parties may have recourse to the courts as the forum of general and competent jurisdiction over such matters.’
There is no similar precedent in Sudan.
According to the UAE Civil Procedures Law, an interim order could be obtained before filing the substantive/merits claim. This is done by a petition to the Urgent Matters Court. Where such an order is granted, it must be followed by filing the substantive/merits claim within eight days of the date of granting the order. One of the interesting cases which was to be heard by an arbitral tribunal sitting in Panama. The Dubai court granted our firm’s request for the arrest of a vessel in Dubai pending filing the substantive/merits claim before the arbitral tribunal in Panama.
In Sudan, the judicial system does not recognise the system of Urgent Matters Court. A request for a provisional remedy is heard by the same judge hearing the substantive/merits claim. In other words, a motion for a provisional remedy cannot be filed independently from the substantive/merits claim. That means, it may not be possible to get a provisional remedy for a claim filed or to be filed before an arbitral tribunal sitting outside Sudan.
In the UAE, the position has changed since the Arbitration Law came into force on 15 June 2018. Article 21 provides for the arbitral tribunal’s power, either on the request of a party or on its own motion, to order any party to take such interim or conservatory measures as the arbitral tribunal may deem necessary given the nature of the dispute.
In Sudan, the position has also changed following Arbitration Act 2005 being superseded by the Arbitration Act 2016. Both laws were based on the UNCITRAL. Section 11 of the 2016 Act provides for the arbitral tribunal’s power to grant provisional orders.
Revocability of orders
There is one noticeable difference between the laws of the two countries. There is a loophole in the UAE law concerning the finality of an interim order granted by the arbitral tribunal. Article 21/3 of the Law provides that: ‘in exceptional circumstances, the arbitral tribunal may, by prior notice to be given to the parties, at the request of any party or on its own motion, amend, suspend or cancel an interim measure it has ordered.’
The case is different under the Sudan’s Arbitration Act which explicitly provides for the finality of any provisional order granted by the arbitral tribunal, and also for the finality of any court judgment enforcing such a provisional order.
In the UAE, there has not been any interim orders under the Arbitration Law or a declined request. This is of course due to the recent enactment and application of the Law which is yet to be tested in the local courts.
In spite of the recent promulgation of the Sudanese Act, however, there is a very rich volume of provisional remedy orders issued by Arbitration Tribunals and enforced by courts. A landmark order under the superseded Arbitration Act 2005 was one issued by a tribunal staying a demolition order issued by Khartoum State. In the most recent case (in 2018), the tribunal issued a provisional remedy attaching the assets of a private hospital and appointing a judicial receiver. In another 2018 case, the tribunal ordered a bank to stay liquidation of a bank guarantee. Courts were cooperative and all the aforesaid orders were enforced. In an extremely limited research, the author of this article managed to spot more than 20 orders which had been issued by tribunals between 2016 and 2020. Summing up the situation in Sudan, it may confidently be concluded that the cooperation between courts and arbitral tribunals concerning courts’ enforcement of provisional orders issued by tribunals is well established.
Finally, the Sudanese Arbitration Act is in many ways, an effective piece of legislation. However, there has been a recent negative development where the former Undersecretary of the Ministry of Justice issued a circular banning agreements on arbitration in government contracts except where there is extra necessity. In seeking an interpretation to this ‘extra necessity’, a counsellor at the Ministry of Justice said ‘it is where there is an important contract with a foreign entity.’