<p>Additionally, the Court of Cassation has stated that &ldquo;the agreement  to arbitrate is not established unless the common intent of the  contracting parties is set on it.&rdquo; 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.</p>
<p><strong>Facts of the case</strong></p>
<p>Two Dubai trading companies (the &ldquo;Claimants&rdquo;) filed a commercial  action with the Court of First Instance against another local company  (the &ldquo;Defendant&rdquo;). 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.&nbsp;</p>
<p>The Claimants argued that on 1 March 2008 they had concluded a  services contract with the Defendant to prepare and carry out interior  design works, and to develop the Claimant&rsquo;s private hotels. The Claimant  further submitted that the Defendant had failed to adhere to its  obligations as stipulated in the contract, delivered the assigned work  late and delivered a defective work product which was below the  standards recognized by the hotel industry. As a consequence, the  Claimants terminated the contract.</p>
<p>Due to the fact that the contract contained in Article 13 an  arbitration clause (&ldquo;the Arbitration Clause&rdquo;), the Defendant requested  the Court to dismiss the case for lack of jurisdiction. The Claimants  argued the same contract contained in Article 14 (&ldquo;the Dubai Courts  Clause&rdquo;) a clause which allowed either party to seek an order from the  Dubai Courts for any dispute that arises out of the contract.</p>
<p><strong>Court of First Instance</strong></p>
<p>The Court of First Instance ruled in favor of the Defendant and  dismissed the case for lack of jurisdiction. The Claimants subsequently  appealed the decision.</p>
<p><strong>Court of Appeal</strong></p>
<p>The Court of Appeal upheld the lower&rsquo;s court decision. The Claimants appealed to the Court of Cassation.</p>
<p><strong>Court of Cassation</strong></p>
<p>The Claimants argued that the Court of Appeal had erred in its  decision to uphold the lower court&rsquo;s decision in that reliance had been  placed on the Arbitration Clause of Article 13 of the services contract  instead of the Dubai Courts Clause of Article 14 of the same contract.  The Claimants submitted that the Dubai Courts Clause gave Dubai Courts  the jurisdiction to oversee any dispute arising out of that contract.</p>
<p>The Court of Cassation interpreted Article 203 (1) and 203 (5) of the  Civil Procedure Law (CPL) to mean that if parties agreed to arbitrate a  dispute it shall not be possible to initiate an action before the  Court. If, notwithstanding the arbitration clause, one party did file an  action in Court and the other party did not object at the first  hearing, then the Court would consider the arbitration clause as void  and take jurisdiction of the case.&nbsp; However, if the other party did  raise an objection at the first hearing, the Court should dismiss the  case for lack of jurisdiction.&nbsp;</p>
<p>The Court held also that arbitration is a final and binding form of  dispute resolution which is conducted outside the usual forum (i.e. the  local courts). The Court clarified however, that what the parties  intended to be meant by &ldquo;dispute&rdquo; should be clearly specified in the  arbitration deed.&nbsp;</p>
<p>With regards to the conflict between the two clauses the Cassation  Court stated that the court looking at the essence of the dispute has  the authority to ascertain the facts of the case, the agreements of the  parties and the common intent of the parties. Any decision taken by such  court, as long as it is supported by sound reasoning based on evidence  provided, is not subject to review by the Court of Cassation. The Court  then proceeded to review the factors considered by the lower courts as  follows:</p>
<ul>
<li>The lower court had found that the Arbitration Clause was written in  a very detailed manner, whereas the Dubai Courts Clause was very short.</li>
<li>The Court found that the recourse to the Dubai Court as stated in  Article 13 could be sought only to explain the contract and have a  binding decision in relation to this explanation, whereas the  adjudication of disputes arising out of the contract was to be dealt  with by arbitration as per Article 14 of the contract. The Court of  Cassation held that any explanation to the contrary would result in  conflict between the two Articles. If the Articles were viewed to be  contradictory, then the Court held that the clearer clause and the more  detailed clause should be applied rather than the ambiguous clause as it  did not need any explanation or clarification from the Court.&nbsp;</li>
<li>Additionally, the Court reasoned, the Arbitration Clause came right  before the Dubai Courts Clause which shows that the parties clearly  intended for the Arbitration Clause to be binding. Furthermore, the  Dubai Courts Clause came under the subheading of &ldquo;Legal Procedure&rdquo;  whereas the Arbitration Clause was under the general heading of  &ldquo;Disputes&rdquo; which shows that the Dubai Courts Clause was meant to be used  in very limited situations.</li>
</ul>
<p>Given that these factors were supported by the evidence and the lower  courts relied on them in their determination, the Court of Cassation  upheld their judgment and the Arbitration Clause.</p>