<p><strong>The Facts<br /><br /></strong>A Civil Action was filed before Dubai Court of  First Instance by a local company (&ldquo;the Claimant&rdquo;) against another local company  (&ldquo;the Defendant&rdquo;). The Claimant requested the Court to confirm an attachment  order recently issued from the summary judge until the issuance of the arbitral  award in related arbitration proceedings.<br /><br />The Claimant submitted that a  Muqawala Agreement incorporating an arbitration clause was concluded between the  Claimant and the Defendant on 14 May 2005. The Claimant contended that muqawala  prescribed that the Claimant would perform the construction work and subsequent  maintenance of an office and warehouse complex on a plot in the Jebel Ali Free  Zone.<br /><br />The Claimant completed the agreed works rendering the Defendant  liable for payment. Of the amount due, the Defendant failed to pay the Claimant  the amount of AED 664,335.16. The Claimant accordingly applied for and obtained  a precautionary attachment order against the Defendant&rsquo;s properties.<br /><br />In  view of the existence of an arbitration clause in the agreement between the  parties, the Claimant also sought the appointment of an arbitrator by the Court  to resolve the dispute.<br /><br /><strong>Court of First  Instance<br /><br /></strong>On 12 June 2008, the Court of First Instance dismissed  the claim. The Claimant appealed to the Court of Appeal.<br /><br /><strong>Court of  Appeal<br /><br /></strong>The Court of Appeal upheld the Court of First Instance&rsquo;s  decision and dismissed the appeal., The Plaintiff subsequently appealed to the  Court of Cassation.<br /><br /><strong>Court of Cassation<br /><br /></strong>Before the  Court of Cassation the Claimant argued that the Court of Appeal had erred in its  decision to uphold the lower Court&rsquo;s decision. The basis for the Claimant&rsquo;s  appeal was that Arbitration may not be conducted in respect of an attachment or  the proceedings required for the confirmation or validation of an attachment  unless referral to arbitration for that purpose has been pre-agreed. However,  the Claimant also submitted that he had simultaneously filed a case to appoint  an arbitrator to resolve the dispute together with the lawsuit filed to confirm  and validate the attachment order.<br /><br />The Court of Cassation overturned the  Court&rsquo;s of Appeal decision and held that pursuant to Article 22 of the Civil  Procedure Law (CPL), Courts shall have jurisdiction over summary and  precautionary proceedings that shall be executed in the country although they  have no jurisdiction over the original action. Unless the arbitration agreement  specifically empowers arbitrators to award precautionary relief such as  attachments, they may not do so &ndash; jurisdiction in this respect remains with the  competent court.&nbsp;<br /><br />It was agreed between the parties that disputes between  them would be resolved by arbitration. However, the arbitration clause within  the parties&rsquo; agreement did not specifically grant the Arbitral Tribunal  jurisdiction over precautionary procedures against the Respondent&rsquo;s properties  in Dubai.<br /><br />The Court of Cassation continued in its analysis and found that  Article 255 of the UAE Civil Procedure Law requires the applicant for attachment  to bring, within eight days from the date of the attachment order, an action  before the Court to prove his right and to validate the attachment. The Court of  Cassation said that this principle applied to cases where the attachment order  has been rendered by a summary court; otherwise, the attachment order shall be  deemed void ab initio.<br /><br />If the substantive has been brought beforehand  (i.e. prior to the awarding of the attachment), and the action to validate the  attachment was brought subsequently before the same Court in order that both  actions be heard together, Article 255 shall be applicable as it deals with  cases where the Court is competent to decide the merits. Therefore, the Court is  competent to hear the claim for validating the attachment  order.&nbsp;<br /><br />However, if the Court is not competent to decide the merits, the  Plaintiff shall still have the right to file an action to validate and enforce  the attachment order independently from the substantive claim. The original rule  is that the action will be admitted unless there is a restriction. The  restriction provided for in Article 255 is a &ldquo;non-standard&rdquo; exception which  deprives the Arbitral Tribunal of jurisdiction over the precautionary summary  procedures decided by the Court.<br /><br />In light of the above, the Court of  Cassation held that the appealed decision did not properly construe Article 255  of the Civil Procedure Law, resulting in the misapplication of the law. The  Court of Cassation overturned the Court of Appeal&rsquo;s decision and remitted it  back for further analysis.</p>