Reshaping DIFC Arbitration: A Guide to the Key Amendments – Part 2

In Part 1 of this series, we examined the DIFC Authority's Consultation Paper No. 2 of 2026, which proposes wide-ranging amendments to the DIFC Arbitration Law (DIFC Law No. 1 of 2008) — to be renamed the Arbitration and Mediation Law of 2026 if adopted. 

We looked at the new default rule on the law governing the arbitration agreement itself (the proposed Article 12A), modelled on the English Arbitration Act 2025’s reversal of Enka v Chubb; the expanded enforceability protections and new rules on asymmetrical clauses and tribunal constitution; the restructured confidentiality regime and its detailed list of permitted disclosures; the changes to interim measures and the DIFC Court's supportive powers; and the broadened scope and transitional provisions extending the Law's reach beyond DIFC-seated arbitrations.

In this second instalment, we turn to four further topics for which, if the relevant provisions are enacted, reshape both how DIFC arbitrations are conducted and the DIFC's standing as a mediation venue: a suite of entirely new express tribunal powers; new disclosure and conduct obligations addressing third-party funding and party misconduct; changes to remedies, interest and awards, and most significantly, a materially shortened challenge period and an entirely new statutory mediation framework introduced under a reformed Part 5. 

As in Part 1, many of these proposals track the English Arbitration Act 2025 and other leading regimes such as the ADGM Arbitration Regulations, while others chart a more distinctly DIFC-specific course.

1. Proposed new tribunal powers

Articles 24A to 24G, if adopted, would be entirely new and would considerably expand the express powers available to tribunals, with several drawing directly on the provisions of the English Arbitration Act:

• Article 24A would empower tribunals to order security for costs, while preventing such orders merely because a claimant is foreign or managed outside the DIFC, mirroring equivalent safeguards in England, Singapore, Hong Kong, Australia and the ADGM against discrimination on grounds of foreign residence.
  • Article 24B would permit consolidation or concurrent proceedings only where the parties agree.
  • Article 24C would create a detailed joinder regime, with safeguards on consent, prejudice and tribunal constitution.
  • Article 24D would introduce a summary-award power where a claim, issue or defence has no real prospect of success, subject to a right to be heard. This closely mirrors the new summary disposal power inserted as section 39A of the English Arbitration Act 1996 , itself following a Law Commission recommendation. Indeed, the DIFCA’s stated rationale echoes the English reasoning that tribunals were thought to have this power implicitly, but often hesitated to use it for fear of due-process concerns infecting any resulting award.
  • Article 24E would permit provisional awards, including for money, property and interim costs.
  • Article 24F would introduce peremptory orders backed by DIFC Court enforcement, following the long-standing English model in sections 41 and 42 of the Arbitration Act 1996. A peremptory order is a powerful tool to compel compliance that would be welcomed by users seeking greater efficiency in the arbitral process. 
  • Article 24G would recognise emergency tribunals and their power to issue peremptory orders, echoing the new section 41A of the English Arbitration Act 1996, which likewise makes emergency tribunals’ orders enforceable through the court.

These provisions would bring the statutory framework closer to the toolkit already found in leading institutional rules, and, on several points, closer to the modernised English regime.

2. Proposed rules on third-party funding and conduct

Articles 28A and 32A address two topics of growing importance. Article 28A would require a party with a third-party funding agreement to disclose the funder’s identity and whether it has assumed adverse costs liabilities. This must be disclosed to the other parties, any arbitral institution and the tribunal. It also would prevent a party from entering into a funding agreement after the tribunal is constituted where that would create a conflict with a tribunal member. Disclosure must be immediate if funding pre-dates the arbitration, or within seven days if entered later. This drafting is based on the DIAC Rules 2022 and Article 37 of the ADGM Arbitration Regulations 2015. The UK’s Law Commission considered, but ultimately did not recommend, a statutory funding-disclosure requirement in the Arbitration Act 2025, so this DIFC proposal would go further than the current English statutory position.

Article 32A would also introduce express conduct standards, prohibiting false statements, the concealment or destruction of relevant documents, and obstructive conduct. It would include a due-process safeguard requiring an opportunity be afforded for submissions before any breach finding. Further, the proposed rule would give tribunals broad sanctioning and costs powersin a shortened, more generalised form than the equivalent Article 44 of the ADGM Arbitration Regulations. It will draw some inspiration from section 40 of the English Arbitration Act 1996 (the parties’ general duty to do all things necessary for the proper and expeditious conduct of proceedings).

3. Proposed changes to awards, interest and challenge period

The proposed provisions would clarify tribunal powers over remedies, awards and interest, each closely mirroring the equivalent, and in most cases long-standing, sections of the English Arbitration Act 1996:

• Article 37A would confirm tribunals’ power to grant any remedy permitted by the applicable law (mirroring section 48 of the English Arbitration Act 1996 and Article 51 of the ADGM Arbitration Regulations);
• Article 37B would confirm tribunals may issue separate awards at different times on different issues (mirroring section 47 of the English Arbitration Act 1996);
• Article 38A would confirm tribunals may award simple or compound interest (mirroring section 49 of the English Arbitration Act 1996, subject to a saving in Article 38A for any applicable law that restricts compound interest — relevant given several GCC jurisdictions generally do not permit it); and
• Article 38B would allow the DIFC Court to extend a contractual time limit for issuing an award where substantial injustice would otherwise result (mirroring section 50 of the English Arbitration Act). 

Most significantly, amended Article 41 would reduce the setting-aside period for DIFC-seated awards from three months to 30 days, unless the parties agree a longer period in writing. This would bring the DIFC regime in line with a broader international trend towards shorter challenge windows. For instance, the equivalent period is 28 days in England (section 70(3) of the Arbitration Act 1996) and 30 days under the UAE Federal Arbitration Law, though it remains markedly shorter than the three-month period retained in Singapore, Hong Kong, Australia and the ADGM. This would materially accelerate post-award finality and compress the window for challenge, so parties wishing to preserve a longer period must address this expressly.

4. Proposed statutory mediation framework

The amended Part 5 would introduce a full statutory mediation framework, drawn substantially from the UNCITRAL Model Law on International Commercial Mediation (2018) and the Singapore Convention on Mediation, and reflecting the DIFC Courts’ recently launched Mediation Service Centre, covering the application and commencement of mediation, party autonomy and exclusions for certain consumer, family, inheritance and employment matters. It would provide for the appointment, independence and impartiality of mediators, regulate the conduct of mediation and confidentiality, and restrict the admissibility of mediation-related evidence in other proceedings. 

The DIFCA considered, but decided against, an express “arb-med-arb” regime of the kind found in Singapore and Hong Kong, under which arbitration is paused for mediation before the same tribunal, concluding that this was better left to party agreement and institutional rules, given the risk that combining the mediator and tribunal roles could compromise both the perceived impartiality of the tribunal and the parties’ candour during mediation. 

Most significantly, it would make mediated settlement agreements binding and enforceable through the DIFC Court, subject to specified proof requirements and refusal grounds. This would sit alongside the UAE's separate accession to the Singapore Convention on Mediation (Federal Decree No. (85) of 2026, gazetted 29 June 2026), which will provide a further, opt-in cross-border enforcement route for mediated settlements once in force.

Conclusion

Taken together with the changes discussed in Part 1, these proposals would substantially expand the tribunal's toolkit and codify powers and standards of conduct. From security for costs and joinder to summary disposal and sanctions for misconduct, while also introducing a full statutory mediation regime alongside the arbitration law for the first time. Several of the changes, including the new peremptory-order and summary-award powers, the enforceable emergency tribunal regime, the shortened 30-day setting-aside window, and the enforceability of mediated settlement agreements through the DIFC Court, would be distinctly pro-enforcement and pro-efficiency, reinforcing the direction of travel identified in Part 1 towards a more modern, internationally aligned DIFC framework. As with the proposals discussed in Part 1, none of the amendments are yet in force, and we will provide a further update once they are enacted.

*We thank our former colleagues Mohamed Khanaty and Janais Bartholomew.