The Dubai Court of Cassation issued a significant judgment on 19 November 2024, clarifying the legal effect of pre-conditions to arbitration agreed by the partis, particularly those that require preliminary steps before arbitration may be commenced.

The Court of Cassation held that the pre-conditions agreed by the parties before they can commence arbitration do not impact the jurisdiction of arbitral tribunals. Instead, such conditions are procedural in nature and pertain to the admissibility of claims before arbitral tribunals. Failure to satisfy these pre-conditions may result in a temporary bar to initiating arbitration proceedings but does not vest jurisdiction back to the national courts. The Court of Cassation held that arbitral tribunals retain competence, even if the pre-conditions are not satisfied. The non-compliance with the pre-conditions, according to the Court, only delays the arbitration proceedings. 

This position reinforces the UAE’s pro-arbitration stance. 

Freedom of Contract and Jurisdiction of arbitral tribunals

The Court of Cassation emphasised, in its judgment, that arbitration is consensual and relies on the parties’ agreement, and as such, parties are free to impose conditions preceding the commencement of arbitration proceedings, provided such conditions do not conflict with public order or morality.

The Court, therefore, recognising the principle of contractual autonomy, confirmed that a party who agrees to a pre-condition, such as engaging in negotiation prior to commencing arbitration proceedings, is bound by that agreement. If a party seeks to commence arbitration without first complying with such a condition, the arbitral tribunal may find the claim inadmissible, but this does not affect the tribunal’s jurisdiction.

The non-compliance with the pre-conditions to arbitration 

Importantly, the Court of Cassation clarified that procedural rules serve to facilitate the enforcement of substantive rights rather than to obstruct them. Accordingly, the Court of Cassation concluded that procedural matters are presumed valid and may only be invalidated if the law expressly provides for such invalidity. Therefore, procedural irregularities, such as failure to meet a condition precedent, do not automatically invalidate the arbitration or reassign jurisdiction to the courts.

By drawing this distinction, the Dubai Court of Cassation brings the UAE jurisprudence in line with international arbitral practice, including the doctrine of kompetenz-kompetenz, which affirms arbitral tribunals' authority to rule on their own jurisdiction, including questions of pre-conditions to arbitration proceedings. It is therefore for arbitral tribunals to determine whether the pre-conditions to commencing arbitration proceedings have been fulfilled or not.