Arbitration clauses: resolving conflicting jurisdictional clauses in the same agreement

Article 203 of the UAE Civil Transactions Law allows parties to agree to seek arbitration for any dispute that arises between them in a given contract, and sets the rules for such agreement. However, since the agreement to arbitrate includes giving up the right to seek court review of the essence of the dispute, the legislators required for it to be expressed in writing. Additionally, the Court of Cassation has stated that “the agreement to arbitrate is not established unless the common intent of the contracting parties is set on it.” We take a look at one of the cases where the parties had both an arbitration clause and a clause given Dubai Courts jurisdiction, and how the Court of Cassation resolved the dispute.

Two Dubai trading companies (the “Claimants”) filed a commercial action with the Court of First Instance against another local company (the “Defendant”). The Claimants requested the Court to order the Defendant to pay them the amount of AED 2,765,253.82 as compensation for breaching a services contract which they had executed…

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