On March 22, 2021, H.E. Justice Shamlan Al Sawalehi delivered a decisive blow to the Claimant’s attempt to relitigate a failed arbitration, dismissing all eight grounds of the application to set aside the award in Lachesis v Lacrosse. The ruling, issued at 1:30pm, effectively shuttered a challenge that had sought to re-examine over 40 alleged errors of law and fact under the guise of UAE public policy. By upholding the finality of the Ladonna-seated award, the Court reaffirmed the strict boundaries of the DIFC’s supervisory jurisdiction.
For arbitration counsel and cross-border litigators, this decision serves as a vital reminder that the DIFC Courts will not tolerate the 'merits-review' creep that often plagues post-award litigation. The case clarifies that the public policy gateway under Article 41 of the Arbitration Law is not a back-door appeal mechanism for dissatisfied parties to re-argue the substance of a dispute, nor is it a sanctuary for those who failed to raise procedural objections during the arbitral process itself.
How Did the Dispute Between Lachesis and Lacrosse Arise?
The commercial genesis of the dispute traces back to late 2017, a period characterized by significant infrastructure and maritime development within the region. On 18 December 2017, Lachesis and Lacrosse entered into charters for the purpose of works to be carried out on a project within the Lacey. The contractual framework governing these works was intended to provide a predictable mechanism for the allocation of risk, operational responsibilities, and financial remuneration between the two corporate entities.
As is common in complex charterparty agreements, the operational realities on the ground soon diverged from the contractual expectations. A dispute arose regarding the execution of the works and the corresponding financial obligations under the charters. Bound by a mandatory arbitration clause, the parties were compelled to resolve their differences outside the national courts. Consequently, the Claimant commenced arbitral proceedings against the Defendant in the Ladonna (LADONNA) on 9 August 2018.
The arbitration advanced over the subsequent eighteen months, governed strictly by the LADONNA Arbitration Rules. During this period, both parties had ample opportunity to present their respective cases, submit documentary evidence, and test the opposing side's claims. The tribunal ultimately closed the proceedings and deliberated on the extensive factual and legal matrix presented by the charter dispute. On 20 February 2020, the tribunal rendered its final award, decisively finding in favour of the Defendant, Lacrosse.
Rather than accepting the arbitral outcome and complying with the financial directives of the tribunal, Lachesis immediately sought to nullify the result. In a display of remarkable procedural aggression, on the exact same day the award was published—20 February 2020—the Claimant applied to this Court to have the Award set aside. This initial application was subsequently formalized when the formal claim was issued on 30 March 2020, setting the stage for a protracted supervisory battle before the Dubai International Financial Centre (DIFC) Courts.
The Claimant’s strategy was not one of surgical precision but of overwhelming volume. When Lachesis filed its Detailed Particulars of Claim on 22 August 2020, it advanced eight distinct grounds for setting aside the award under Article 41 of DIFC Law No. 1 of 2008 (the Arbitration Law). The sheer scale of the challenge revealed an underlying dissatisfaction with the tribunal's substantive findings rather than genuine procedural grievances. H.E. Justice Shamlan Al Sawalehi captured the essence of this sprawling attack when describing the Claimant's approach to the alleged defects:
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
By framing these forty-plus alleged errors as a violation of UAE public policy, Lachesis attempted to force the DIFC Court into an appellate role. The factual context of the charter dispute—who owed what under the 2017 agreements—was entirely lost in a manufactured debate over the fundamental legal order of the United Arab Emirates. The Court, however, recognized the tactic for what it was: a backdoor attempt to relitigate the merits of a lost arbitration.
The procedural failures alleged by Lachesis were largely technical and devoid of substantive prejudice. For instance, under Ground 1, the Claimant argued that the arbitral procedure violated the parties' agreement because the tribunal failed to sign every page of the award, as required by Article 37(4) of the LADONNA Rules. While it was uncontroversial that the signatures were missing, Lachesis failed to articulate how this clerical omission impacted the fairness of the proceedings or the integrity of the final decision. The Court emphasized that Article 41(2) of the Arbitration Law grants discretionary power; proving a technical breach does not automatically compel the annulment of an award. The burden rests on the applicant to prove that the breach caused tangible harm.
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
Furthermore, the Court noted that the Arbitration Law provides built-in mechanisms for addressing precisely the types of clerical oversights Lachesis complained of. Rather than seeking annulment, the Claimant had statutory avenues available to rectify the missing signatures long before invoking the supervisory jurisdiction of the DIFC Courts.
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
By failing to utilize Article 40(1)(a) within the prescribed thirty-day window, Lachesis effectively waived its right to complain about the typographical and clerical state of the award. The decision to bypass the corrective mechanism and instead launch a full-scale set-aside application under Article 41 strongly suggested that the procedural objections were an afterthought, engineered solely to escape the financial consequences of the tribunal's findings.
The strict requirement for demonstrable prejudice aligns with the broader jurisprudential trajectory of the DIFC Courts. In cases such as ARB-009-2019 ARB 009/2019 Ocie v Ortensia, the judiciary has consistently held that supervisory jurisdiction is a shield against fundamental procedural unfairness, not a sword for disappointed litigants to strike down unfavorable commercial outcomes. The burden rests entirely on the applicant to prove not only that a rule was breached, but that the breach caused tangible harm that warrants the extreme remedy of setting aside a final award.
The culmination of the Claimant's flawed strategy was exposed during the hearing, which took place by way of teleconference on 30 November 2020. Faced with a tribunal that had meticulously evaluated the charter dispute, Lachesis could not point to any moment where it was denied the right to be heard. Instead, it relied on the cumulative weight of its forty alleged errors, hoping the Court would conflate volume with validity. To succeed on public policy grounds, an applicant must point to a violation of the state's most fundamental legal principles. H.E. Justice Shamlan Al Sawalehi clarified the standard for identifying such principles:
It follows that if a part of the UAE’s public policy was authoritatively articulated in Dubai law, it would be an articulation of the public policy of the UAE for the purposes of DIFC law, too.
Lachesis failed to link its forty errors to any authoritative articulation of Dubai or UAE public policy. A mere error of fact or law by an arbitrator regarding a maritime charter does not violate the fundamental moral or legal fabric of the state. Systematically dismantling the Claimant's approach, the judge delivered a definitive rebuke to the practice of disguising merits appeals as jurisdictional or public policy challenges:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
The dismissal of the set-aside application in its entirety reinforces the finality of arbitral awards seated in the jurisdiction. As explored in related commentary on ARB-027-2024: ARB 027/2024 Nalani v Netty, the DIFC Courts maintain an exceptionally high threshold for interference. The factual origins of the Lachesis and Lacrosse dispute—a standard commercial disagreement over maritime works in the Lacey—did not justify the invocation of the UAE's public policy exception. By holding the line against such expansive interpretations of Article 41, the Court preserved the integrity of the arbitral process and ensured that technical omissions, such as missing signatures on a page, cannot be weaponized to undo years of substantive legal work.
How Did the Case Move From the Initial Claim to the Final Dismissal?
The trajectory of the annulment application in Lachesis v Lacrosse reveals a fundamental misunderstanding by the Claimant of the DIFC Courts’ supervisory jurisdiction. Rather than engaging with the arbitral tribunal to cure alleged procedural defects, Lachesis weaponized those defects in a sprawling, multi-pronged attack designed to relitigate the substantive merits of the dispute. The arbitral tribunal rendered the Award on 20 February 2020, finding entirely in favor of the Defendant, Lacrosse. Instead of seeking clarification or correction from the tribunal under the applicable LADONNA Rules, the Claimant immediately pivoted to the judicial arena. The formal challenge commenced when the claim issued on 30 March 2020, setting in motion a year-long procedural battle that tested the boundaries of Article 41 of the DIFC Arbitration Law (DIFC Law No. 1 of 2008).
The procedural lifecycle of the challenge was characterized by voluminous, scattergun pleadings. The Court was tasked with dissecting the Claimant’s arguments set out in its Detailed Particulars of Claim dated 22 August 2020, which advanced eight distinct grounds for setting aside the Award. Lacrosse countered with robust submissions in opposition to the Claim, framing the application as a transparent attempt to bypass the finality of the arbitral process. The culmination of this exchange occurred during a teleconference on 30 November 2020, where H.E. Justice Shamlan Al Sawalehi heard oral arguments from both sets of counsel. The shift to a virtual hearing format did not diminish the rigorous scrutiny applied to the Claimant's jurisdictional and procedural complaints.
The analytical crux of the Court’s dismissal rested on the Claimant’s deliberate failure to utilize the corrective mechanisms built into the arbitral framework. A primary grievance raised under Ground 1 was that the Award lacked signatures on every page, allegedly violating Article 37(4) of the LADONNA Rules. The Claimant argued that this technical omission meant the arbitral procedure was not in accordance with the parties' agreement, thereby triggering annulment under Article 41(2)(a)(iv). However, H.E. Justice Al Sawalehi identified a fatal strategic flaw: the Claimant had sat on this curable defect rather than raising it with the tribunal.
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
By ignoring the 30-day statutory window provided by Article 40(1)(a), Lachesis forfeited its right to complain about clerical irregularities. The DIFC Courts have consistently maintained that parties cannot warehouse procedural grievances during the arbitration only to deploy them as torpedoes against the final award. This principle of waiver is foundational to the DIFC's pro-arbitration stance, echoing the judicial philosophy seen in ARB-009-2019 ARB 009/2019 Ocie v Ortensia, where the integrity of the arbitral process is fiercely protected against ex post facto procedural ambushes. A party seeking annulment must furnishes proof that the deviation caused actual prejudice, a burden the Claimant entirely failed to discharge.
Furthermore, H.E. Justice Al Sawalehi emphasized the discretionary nature of Article 41(2). The statute dictates that an award "may" be set aside, granting the Court a vital discretionary shield against opportunistic challenges. Even if a procedural irregularity is proven, annulment is not an automatic remedy. The Claimant failed to articulate why the Court should exercise its discretion to unravel a complex commercial award over a missing signature, particularly when the Claimant could not demonstrate how the outcome was affected.
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
The Claimant’s strategy devolved further into a scattergun approach, advancing multiple grounds that were fundamentally disconnected from the statutory framework of the Arbitration Law. Several of the eight grounds advanced by Lachesis were so poorly formulated that they failed to even engage the specific provisions of Article 41. The Court noted that the arguments under Ground 2 did not concern incapacity for the purposes of Article 41(2)(a)(i), and that the Claimant did not even purport that the objections under Grounds 7 and 8 engaged any specific provision for setting aside an award. This lack of statutory anchoring exposed the application as a desperate attempt to find any viable hook to sink the Award.
The most egregious aspect of the Claimant’s litigation strategy, however, was its attempt to disguise a comprehensive merits appeal as a public policy challenge under Ground 4. The DIFC Arbitration Law expressly forbids the Court from reviewing the substantive merits of an arbitral award. Recognizing this jurisdictional bar, the Claimant attempted a Trojan horse maneuver, packaging dozens of factual and legal grievances into a single, unwieldy public policy argument.
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
The Court swiftly dismantled this tactic. H.E. Justice Al Sawalehi recognized that conflating mere errors of law or fact with violations of fundamental UAE public policy would effectively destroy the finality of arbitration in the DIFC. The public policy exception under Article 41(2)(b)(iii) is a narrow gateway reserved for awards that offend the most basic notions of morality and justice, not a backdoor for disgruntled parties to demand a second bite at the apple.
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
The lifecycle of the challenge concluded decisively on 22 March 2021, when the Court issued its order at exactly 1.30pm. The dismissal of all eight grounds reinforced the exceptionally high threshold required to annul an award in the jurisdiction. The Court’s refusal to entertain the Claimant’s sprawling, multi-pronged attack serves as a stark warning to future litigants: the DIFC Court of First Instance will not act as an appellate tribunal. The finality of the arbitral process remains paramount, and attempts to circumvent it through manufactured procedural grievances or inflated public policy claims will be met with swift rejection, a theme similarly explored in ARB-005-2014: Eava v Egan [2014] ARB 005.
The financial consequence of this failed strategy was immediate and punitive. The Court ordered that the Claimant shall pay the Defendant its costs of the proceedings on the standard basis.
The Claimant shall pay the Defendant its costs of these proceedings on the standard basis, to be assessed by a Registrar if not agreed.
This costs order underscores the severe risk associated with launching speculative annulment applications. The trajectory from the initial claim in March 2020 to the final dismissal a year later illustrates the robust filtering mechanism of the DIFC Courts. By holding the line against disguised merits appeals and enforcing the requirement that parties utilize arbitral corrective mechanisms before seeking judicial intervention, the Court preserved the integrity of the LADONNA-seated arbitration and reaffirmed the DIFC’s status as a jurisdiction that fiercely protects the finality of binding dispute resolution.
What Is the 'Merits Review' Prohibition and Why Does It Matter Here?
The fundamental bargain of international commercial arbitration is the exchange of appellate rights for procedural finality. When sophisticated commercial actors draft arbitration clauses, they deliberately opt out of the state court apparatus, accepting the risk that a tribunal might misapply the law or misapprehend the facts. In exchange, they secure a binding, enforceable resolution that cannot be endlessly relitigated. The Dubai International Financial Centre (DIFC) Courts have built their reputation as a premier arbitral seat by fiercely protecting this bargain. The strict prohibition on reviewing the substantive merits of an arbitral award is not merely a procedural guideline; it is the jurisdictional cornerstone of the DIFC’s arbitration-friendly regime.
In Lachesis v Lacrosse [2021] DIFC ARB 005, the Claimant launched a sprawling, multi-front assault on a Ladonna-seated award, asking the Court to set it aside on eight grounds. While the application invoked various statutory provisions under DIFC Law No. 1 of 2008 (the Arbitration Law), the core of the Claimant’s strategy relied on a familiar, albeit desperate, tactic: dressing up substantive disagreements as violations of public policy.
The most egregious manifestation of this strategy was found in Ground 4 of the application. The Claimant sought to bypass the merits review prohibition by utilizing the public policy gateway found in Article 41(2)(b)(iii) of the Arbitration Law. Rather than pointing to a fundamental breach of natural justice, corruption, or a violation of the UAE’s core moral and economic principles, the Claimant submitted a laundry list of grievances regarding how the tribunal weighed the evidence and interpreted the underlying contracts. H.E. Justice Shamlan Al Sawalehi documented the sheer scale of this attempt:
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
The Court explicitly rejected the attempt to use the public policy gateway to re-litigate these 40+ errors. By refusing to even recount the specific factual and legal grievances in the judgment, H.E. Justice Shamlan Al Sawalehi signaled that the Court will not entertain substantive arguments, regardless of how they are packaged. The public policy exception is a narrow safety valve designed to protect the integrity of the forum, not a backdoor for disappointed litigants to secure an appellate review.
The distinction between procedural fairness and substantive outcome is absolute in DIFC jurisprudence. If a tribunal conducts a fair hearing, gives both parties a reasonable opportunity to present their case, and issues an award within the scope of its mandate, the supervisory court’s inquiry is effectively concluded. Whether the tribunal’s ultimate conclusions were "correct" as a matter of law or fact is entirely irrelevant to an annulment application. H.E. Justice Shamlan Al Sawalehi articulated this boundary with uncompromising clarity:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
The Court views merit-based challenges as an abuse of the supervisory process. When a party attempts to convert an annulment proceeding into a de facto appeal, it undermines the efficiency and finality that make arbitration commercially viable. This strict textualist approach to the Arbitration Law aligns with the broader trajectory of DIFC jurisprudence, as seen in cases like ARB-009-2019 ARB 009/2019 Ocie v Ortensia, where the Court similarly insulated arbitral outcomes from substantive second-guessing. The message to practitioners is unequivocal: the DIFC Court is a supervisory body, not an appellate tribunal.
The Claimant’s inability to distinguish between procedural irregularity and substantive disagreement infected other parts of its application as well. Under Ground 3, the Claimant argued that it was unable to present its case within the meaning of Article 41(2)(a)(ii). In theory, a genuine inability to present a case—such as a tribunal refusing to hear a key witness or denying a party access to critical evidence—constitutes a valid ground for annulment. However, the Claimant’s argument quickly collapsed into another complaint about the tribunal’s substantive decision-making. The Claimant asserted that the outcome would have been different had the tribunal adopted a different procedural course, but failed to establish any actual breach of the agreed LADONNA Rules.
H.E. Justice Shamlan Al Sawalehi dismantled this argument by highlighting the Claimant's failure to demonstrate concrete prejudice:
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
This ruling reinforces a critical doctrinal hurdle for parties challenging awards in the DIFC: the burden of proving prejudice. It is insufficient to merely identify a procedural decision that a party dislikes; the challenging party must prove that the decision violated the agreed rules and that this violation fundamentally compromised the fairness of the proceedings. Vague assertions that the award "would have been different" carry no weight. This intolerance for procedural obstructionism and speculative grievances is a recurring theme in the jurisdiction, thoroughly explored in ARB-027-2024: ARB 027/2024 Nalani v Netty.
The Claimant’s scattergun approach also extended to highly technical, formalistic complaints. For instance, under Ground 1, the Claimant argued that the award was invalid because it was not signed on every page, as required by Article 37(4) of the LADONNA Rules. The Claimant sought annulment under Article 41(2)(a)(iv), which deals with arbitral procedures not being in accordance with the agreement of the parties.
Here, the Court provided a masterclass in the application of judicial discretion. H.E. Justice Shamlan Al Sawalehi noted that even if a procedural requirement was technically breached, Article 41(2) states that an award may be set aside, not that it must be. The statutory language deliberately confers discretion upon the supervisory court to prevent the annulment of awards based on harmless technicalities. The Claimant failed entirely to address why the Court should exercise its discretion to destroy a final award over missing signatures on intermediate pages, especially when no substantive prejudice was alleged to have flowed from that specific omission.
Furthermore, the Court pointed out that the Arbitration Law provides specific, time-bound mechanisms for addressing minor clerical issues, which the Claimant simply ignored:
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
By failing to utilize the proper statutory tools at the appropriate time, the Claimant effectively waived its right to complain about typographical or clerical defects later. The attempt to elevate such minor issues to the level of annulment grounds further demonstrated the artificial nature of the challenge.
Ultimately, the dismissal of all eight grounds in Lachesis v Lacrosse serves as a definitive statement on the limits of the DIFC Court’s supervisory jurisdiction. By ordering that the Claimant pay the costs of these proceedings on the standard basis, the Court penalized the attempt to relitigate the merits under the guise of statutory challenges. The 'merits review' prohibition remains absolute, ensuring that parties who choose the DIFC as their arbitral seat can rely on the finality of their awards, free from the threat of endless, substantive second-guessing by the courts.
How Did Justice Shamlan Al Sawalehi Interpret the UAE Public Policy Gateway?
The attempt to set aside an arbitral award by invoking the public policy exception is a well-worn tactic in international arbitration, often serving as a last refuge for a party seeking to escape an unfavorable merits determination. In Lachesis v Lacrosse [2021] DIFC ARB 005, the Claimant sought to weaponize Article 41(2)(b)(iii) of DIFC Law No. 1 of 2008 (the Arbitration Law), arguing that the Ladonna-seated tribunal’s findings were so fundamentally flawed that they breached the public policy of the United Arab Emirates. The resulting judgment by H.E. Justice Shamlan Al Sawalehi provides a masterclass in statutory interpretation, firmly shutting the door on disguised merits appeals while clarifying the precise doctrinal relationship between onshore UAE law and DIFC supervisory jurisdiction.
The Claimant’s strategy was expansive. Following the issuance of the final award on 20 February 2020, the Claimant initiated proceedings via a claim issued on 30 March 2020, eventually filing a Detailed Particulars of Claim dated 22 August 2020. Across eight distinct grounds of challenge, the Claimant sought to dismantle the tribunal’s findings. The most ambitious of these was Ground 4, which aggregated over 40 alleged errors of law and fact, packaging them as a collective violation of UAE public policy. To adjudicate this, the Court first had to resolve a foundational jurisprudential question: in a dual-jurisdiction system where the DIFC operates as a common law island within a civil law state, what exactly constitutes "UAE public policy," and how is it defined?
Justice Al Sawalehi anchored his analysis in the precedent established by the Loralia Group litigation, utilizing it to bridge the perceived gap between onshore and offshore legal regimes. The Court decisively rejected any notion of a fragmented or localized public policy that might differ depending on whether a dispute was seated in the DIFC or onshore Dubai. Addressing the geographical and jurisdictional consistency of the doctrine, the Court held:
In my view, Loralia Group can be said to be an authority for the proposition that the public policy of the UAE is the same from jurisdiction to jurisdiction within the UAE.
This unified approach is critical for the stability of the UAE as an arbitration hub. By confirming that public policy is monolithic across the Federation, the DIFC Courts prevent regulatory arbitrage. A losing party cannot successfully argue that an award violates a uniquely "onshore" public policy that the DIFC Courts, applying English-derived common law principles, might otherwise ignore. The baseline standard for what offends the fundamental legal and moral fabric of the State remains identical regardless of the specific emirate or free zone in which the supervisory court sits.
However, acknowledging a unified public policy immediately raises a secondary issue: where does a DIFC judge look to find the substantive content of that policy? The DIFC has its own distinct body of contract, obligations, and arbitration law. Yet, because public policy is a State-level concept, its most authoritative expressions are frequently found in federal statutes or the laws of the individual Emirates. Justice Al Sawalehi articulated a clear mechanism for importing these onshore legislative expressions into the DIFC’s supervisory framework:
It follows that if a part of the UAE’s public policy was authoritatively articulated in Dubai law, it would be an articulation of the public policy of the UAE for the purposes of DIFC law, too.
This formulation is doctrinally elegant. It allows the DIFC Court to respect and apply the mandatory provisions of onshore Dubai law—such as strict rules regarding legal capacity, real estate registration, or commercial agency—when those rules rise to the level of public policy. The DIFC Court does not apply Dubai law directly to the merits of a DIFC-seated arbitration, but it recognizes Dubai law as the definitive articulation of the UAE public policy that Article 41(2)(b)(iii) of the Arbitration Law is designed to protect.
Yet, defining the source of public policy is entirely distinct from determining whether that policy has been breached. It is here that the Claimant’s application fundamentally collapsed. The Claimant attempted to use the public policy gateway to relitigate the tribunal’s substantive findings. By presenting a laundry list of over 40 alleged factual and legal missteps, the Claimant essentially asked the DIFC Court to act as an appellate body, reviewing the tribunal’s weighing of evidence and application of the law.
During the teleconference on 30 November 2020, counsel for the Defendant fiercely opposed this characterization, arguing that the Claimant was conflating ordinary errors of law with violations of fundamental state policy. Justice Al Sawalehi agreed entirely with the Defendant, delivering a sharp rebuke to the Claimant’s tactical maneuvering:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
The distinction drawn by the Court is vital for practitioners to internalize. An error of law by an arbitral tribunal—even a severe or obvious one—does not automatically equate to a breach of public policy. The threshold for a public policy challenge requires demonstrating that the award’s enforcement would shock the conscience of the court or violate the most basic notions of morality and justice within the UAE. A tribunal misinterpreting a contractual clause or misapplying a standard of proof falls entirely outside this narrow gateway. The DIFC Court’s refusal to entertain merits reviews under the guise of public policy aligns perfectly with its broader pro-arbitration jurisprudence, echoing the strict boundaries enforced in parallel enforcement disputes such as ARB-009-2019 ARB 009/2019 Ocie v Ortensia and ARB 027/2024 Nalani v Netty.
The Court’s strict approach to the statutory grounds for setting aside an award extended beyond the public policy arguments to the Claimant’s procedural complaints. Under Ground 1, the Claimant argued that the arbitral procedure violated the agreement of the parties because the tribunal failed to ensure the award shall be signed on every page, a specific requirement under Article 37(4) of the LADONNA Rules. The Claimant asserted that this technical omission automatically invalidated the award under Article 41(2)(a)(iv) of the Arbitration Law.
Justice Al Sawalehi dismantled this argument by focusing on the discretionary nature of the Court’s supervisory power. Article 41(2) states that an award "may be set aside," granting the Court the authority to preserve an award even if a procedural defect is proven. The burden lies squarely on the challenging party not merely to identify a technical breach, but to demonstrate why the Court should exercise its discretion to nullify the entire arbitral process. Because the Claimant failed to articulate any substantive prejudice resulting from the missing signatures, the Court refused to elevate a clerical oversight to a fatal procedural flaw.
Ultimately, the judgment in Lachesis v Lacrosse reinforces the exceptionally high bar required to successfully challenge an arbitral award in the DIFC. By synthesizing the Loralia Group doctrine with a strict textual reading of the Arbitration Law, Justice Al Sawalehi provided a clear roadmap for future litigants: UAE public policy is unified and authoritatively articulated by onshore law, but it cannot be used as a Trojan horse for merits appeals. The dismissal of all eight grounds of challenge, culminating in an order that the Claimant pay the costs of these proceedings on the standard basis, serves as a definitive warning against speculative set-aside applications designed merely to delay enforcement.
What Are the Limits of 'Incapacity' and 'Inability to Present a Case' Under Article 41?
The architecture of DIFC Law No. 1 of 2008 (the Arbitration Law) is deliberately unforgiving to parties seeking a second bite at the substantive apple. Article 41 provides an exhaustive, narrowly tailored list of grounds upon which an arbitral award may be set aside. It is not a menu of suggestions, nor is it a repository for general dissatisfaction with a tribunal’s procedural management. In Lachesis v Lacrosse, the Claimant attempted to stretch the statutory definitions of "incapacity" and "inability to present a case" to encompass a broad array of procedural grievances. H.E. Justice Shamlan Al Sawalehi’s dismissal of these arguments clarifies a fundamental doctrinal reality: procedural complaints must be strictly tethered to specific statutory grounds to succeed, and the burden of proving actual prejudice rests entirely on the challenger.
The Claimant’s strategy relied heavily on a scattergun approach, asking the Court to set aside the final award on eight grounds. Among these, Ground 2 alleged that the Claimant suffered from an "incapacity" that vitiated the arbitral process. In international arbitration practice, grounded in the UNCITRAL Model Law, the concept of incapacity under Article 41(2)(a)(i) is strictly construed. It refers to a fundamental legal incompetence to enter into the arbitration agreement at the time it was made—such as minority, mental incapacity, or a stark lack of corporate authority (ultra vires). It does not refer to a party finding itself at a tactical or procedural disadvantage during the life of the arbitration.
H.E. Justice Shamlan Al Sawalehi swiftly dismantled the Claimant’s attempt to redefine the term, noting the disconnect between the factual allegations and the statutory requirement:
The Claimant’s arguments under Ground 2 do relate to incapacity but do not concern incapacity for the purposes of Article 41(2)(a)(i) of the Arbitration Law.
By drawing this sharp distinction, the Court reinforced that statutory terms of art cannot be repurposed to fit a losing party's narrative. If a party is legally capable of binding itself to an arbitration agreement, subsequent procedural difficulties do not retroactively render that party "incapacitated" within the meaning of the Arbitration Law.
The Claimant’s arguments under Ground 3 fared no better. Relying on Article 41(2)(a)(ii), Lachesis asserted that it was unable to present its case. This is a frequently invoked, yet rarely successful, ground for challenge. To succeed, a party must demonstrate not merely that a tribunal made a procedural ruling adverse to its interests, but that the ruling fundamentally denied the party a reasonable opportunity to present its case, thereby violating the core tenets of due process. Furthermore, the complaining party must establish a causal link between the procedural breach and the outcome of the award—a concept known as the "prejudice" requirement.
The Court found that the Claimant failed on both fronts. First, the Claimant could not point to any specific violation of the agreed procedural framework. Second, and more fatally, it failed the prejudice test. H.E. Justice Shamlan Al Sawalehi articulated the evidentiary burden required to sustain such a challenge:
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
This ruling establishes a critical practice point for practitioners drafting set-aside applications in the DIFC: the "so what?" test. It is insufficient to allege that a tribunal wrongfully denied a document production request, refused to admit late evidence, or curtailed cross-examination. The applicant must explicitly map out how the denied procedural step would have materially altered the tribunal’s substantive findings. Without a clear explanation of how exactly the Award would be different, an Article 41(2)(a)(ii) challenge is doomed to fail. This strict approach mirrors the Court's broader philosophy on procedural integrity, echoing the high threshold for interference seen in ARB-009-2019 ARB 009/2019 Ocie v Ortensia, where the Court similarly protected the arbitral process from unwarranted judicial intrusion.
The Claimant’s attempt to weaponize technical errors further exposed the fragility of its application. Under Ground 1, Lachesis argued that the arbitral procedure was not in accordance with the agreement of the parties because the Award was not signed on every page, a requirement under Article 37(4) of the LADONNA Rules. While it was uncontroversial that the signatures were missing, the Court refused to elevate a clerical oversight to a fatal jurisdictional defect.
The Court emphasized the discretionary nature of Article 41(2), which states that an award "may be set aside." The presence of a procedural irregularity enlivens the Court's discretion; it does not mandate annulment. A claimant must furnish proof of the ground and simultaneously persuade the Court why its discretion should be exercised to destroy the award. Lachesis offered no such persuasion, treating the missing signatures as an automatic trigger for nullification.
Moreover, the Court highlighted the statutory mechanisms designed to cure such defects, and the consequences of failing to use them. The Arbitration Law provides a specific window for parties to rectify clerical mistakes. By sitting on its hands, the Claimant effectively waived its right to complain:
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
The failure to utilize Article 40(1)(a) transforms a correctable technicality into a waived objection. A party cannot stockpile procedural grievances during the arbitration or the immediate post-award period, only to deploy them later as ammunition in a set-aside application. The DIFC Courts expect parties to engage constructively with the arbitral process to cure defects, rather than ambushing the opposing party at the enforcement stage. This principle of procedural estoppel is a recurring theme in DIFC jurisprudence, heavily penalizing parties who engage in tactical obstruction, a dynamic explored extensively in ARB 027/2024 Nalani v Netty.
Perhaps the most audacious aspect of the Claimant’s application was Ground 4, wherein Lachesis attempted to litigate over 40 alleged errors in the Award. These errors, pertaining to questions of law and questions of fact, were packaged as a violation of UAE public policy under Article 41(2)(b)(iii). The public policy exception is notoriously narrow, reserved for awards that violate the most basic notions of morality and justice in the forum state. It is not a backdoor for appellate review.
H.E. Justice Shamlan Al Sawalehi identified the tactic immediately, delivering a definitive rebuke to the Claimant’s attempt to bypass the finality of the arbitral process:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
The DIFC Court does not sit as a court of appeal over arbitral tribunals. Whether a tribunal misapplied the law, misunderstood the facts, or weighed the evidence poorly is entirely irrelevant to an Article 41 application, provided the tribunal acted within its jurisdiction and afforded the parties due process. By attempting to force a substantive review through the public policy gateway, Lachesis fundamentally misapprehended the supervisory role of the DIFC Courts. The dismissal of these grounds reinforces the absolute boundary between procedural review and merits appeal, ensuring that the finality of arbitral awards remains a cornerstone of the DIFC's dispute resolution framework.
Which Earlier DIFC Cases Frame This Decision?
The jurisprudence of the Dubai International Financial Centre (DIFC) Courts regarding arbitral finality has long been defined by a strict adherence to the pro-enforcement principles codified in DIFC Law No. 1 of 2008 (the Arbitration Law). To understand the doctrinal weight of Lachesis v Lacrosse [2021] DIFC ARB 005, one must look back to the foundational ruling in ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC [2013] DIFC ARB 003. In Banyan Tree, the Court established an expansive jurisdictional gateway for the recognition and enforcement of arbitral awards, famously holding that the DIFC Courts could be used as a conduit jurisdiction even absent assets within the financial centre. If Banyan Tree represents the offensive spear of the DIFC’s pro-arbitration stance, Lachesis serves as its defensive shield. Where the former expanded the Court's willingness to enforce, the latter severely restricts its willingness to annul, cementing an exceptionally high threshold for any party seeking to dismantle an award under Article 41 of the Arbitration Law.
The dispute in Lachesis arose from a series of charters executed in December 2017 for works on a project within the Lacey. Following a breakdown in the commercial relationship, the Claimant initiated arbitral proceedings under the LADONNA Arbitration Rules. The resulting award, issued on 20 February 2020, found entirely in favour of the Defendant. Unwilling to accept the tribunal's findings, the Claimant launched a comprehensive assault on the award, filing a Detailed Particulars of Claim that sought to vacate the tribunal's decision on eight grounds. These grounds ranged from alleged procedural irregularities to sweeping claims of public policy violations, requiring the Court to systematically dismantle a kitchen-sink approach to post-award litigation.
The first ground of challenge tested the limits of procedural strictness versus judicial pragmatism. The Claimant argued that the arbitral procedure deviated from the parties' agreement, specifically invoking Article 41(2)(a)(iv) of the Arbitration Law. The crux of the complaint rested on a technicality: Article 37(4) of the LADONNA Rules mandates that an award shall be signed on every page. It was undisputed that the tribunal had failed to execute this specific administrative task. For the Claimant, this omission was framed as a fatal defect that automatically invalidated the award.
H.E. Justice Shamlan Al Sawalehi’s treatment of this argument provides a masterclass in statutory interpretation and judicial restraint. Rather than treating the procedural defect as an automatic trigger for annulment, the judge focused on the permissive language of Article 41(2), which states that an award "may" be set aside. The Court held that a procedural breach, without more, merely serves to enliven the Court’s discretion to set aside the Award. The burden on the applicant is twofold: they must prove the breach occurred, and they must persuade the Court why its discretion should be exercised in favour of annulment. By failing to articulate any substantive prejudice resulting from the missing signatures, the Claimant's argument collapsed entirely.
This refusal to elevate form over substance aligns perfectly with the trajectory seen in ARB-009-2019 ARB 009/2019 Ocie v Ortensia. In Ocie, the DIFC Court similarly confronted an applicant attempting to weaponize procedural grievances to escape an unfavourable merits determination. The consistent thread across these judgments is the Court's intolerance for tactical pedantry. If a party suffers no actual prejudice from a procedural misstep, the DIFC Courts will not allow that misstep to serve as a backdoor exit from a binding arbitration agreement.
The Claimant's reliance on the public policy exception required the Court to consider the precise boundaries of UAE public policy within the DIFC's legal architecture. The DIFC operates as a common law jurisdiction within a broader civil law framework, but public policy remains a unifying concept across the Emirates. The Court acknowledged that public policy is not a fragmented doctrine; rather, it is a cohesive national standard. As H.E. Justice Shamlan Al Sawalehi noted regarding the interplay between local and federal legal principles:
It follows that if a part of the UAE’s public policy was authoritatively articulated in Dubai law, it would be an articulation of the public policy of the UAE for the purposes of DIFC law, too.
Yet, acknowledging the unified nature of UAE public policy does not mean the Court will allow the concept to be diluted into a catch-all repository for a losing party's grievances. The Claimant in Lachesis attempted exactly that. Ground 4 of the application sought to invoke Article 41(2)(b)(iii) of the Arbitration Law, arguing that the award conflicted with the public policy of the United Arab Emirates. To support this heavy allegation, the Claimant did not point to a fundamental breach of morality, fraud, or a violation of natural justice. Instead, it compiled a staggering list of alleged factual and legal misjudgments by the tribunal.
H.E. Justice Shamlan Al Sawalehi summarized the sheer volume of these complaints with clear skepticism, exposing the true nature of the application:
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
The strategy of repackaging merits-based appeals as public policy violations is a known hazard in international arbitration, often deployed by desperate award debtors in jurisdictions with less sophisticated supervisory courts. The DIFC Courts, however, have long maintained a strict prohibition against reviewing the substantive merits of an arbitral award. The public policy exception is reserved for the most egregious violations of fundamental legal principles, not for correcting a tribunal's alleged misapplication of contract law or misweighing of evidence.
The Court's dismissal of Ground 4 was absolute, reinforcing the boundary between supervisory review and appellate intervention. H.E. Justice Shamlan Al Sawalehi delivered a definitive rebuke to the Claimant's methodology, ensuring that the public policy gateway remains tightly guarded:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
What Does This Mean for Practitioners and Enforcement Strategies?
The judgment delivered by H.E. Justice Shamlan Al Sawalehi in Lachesis v Lacrosse [2021] DIFC ARB 005 provides a masterclass in the strategic missteps that counsel must avoid when seeking to challenge an arbitral award within the Dubai International Financial Centre. By systematically dismantling an eight-pronged attack on a LADONNA-seated award, the Court established a clear boundary: the statutory set-aside mechanism is not a backdoor for appellate review. For practitioners advising on enforcement or resisting an adverse award, the ruling dictates a fundamental shift in tactical thinking. Objections must be raised contemporaneously, procedural grievances must be tethered to demonstrable prejudice, and the public policy exception must be reserved for genuine violations of fundamental justice, rather than deployed as a Trojan horse for substantive appeals.
A recurring and fatal error in post-award litigation is the tendency of losing parties to hoard minor procedural defects, hoping to weaponise them later under Article 41 of DIFC Law No. 1 of 2008 (the Arbitration Law). In the present dispute, the Claimant attempted to leverage a purely administrative oversight—the tribunal’s failure to sign every single page of the award, as required by the LADONNA Rules—as a jurisdictional torpedo. The Court rejected this approach entirely, focusing on the discretionary nature of the set-aside power. The Arbitration Law explicitly states that an arbitral award may be set aside by the DIFC Court, granting the presiding judge the latitude to uphold an award even if a procedural requirement was technically breached.
The strategic imperative here is immediate rectification rather than delayed ambush. The Arbitration Law provides specific, time-bound mechanisms for correcting administrative anomalies, which the Claimant entirely ignored. As Justice Al Sawalehi observed:
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
Counsel must therefore audit any incoming award immediately. If clerical or typographical errors exist, the correct strategy is to request that those errors be corrected within the strict 30-day statutory window. Attempting to bypass this corrective mechanism and instead demanding total nullification months later signals to the Court that the applicant is engaged in tactical obstruction rather than seeking genuine procedural fairness.
Beyond merely identifying a procedural misstep, practitioners must clear a significantly higher evidentiary bar: proving actual, outcome-determinative prejudice. The Claimant argued that it was unable to present its case within the meaning of Article 41(2)(a)(ii), yet failed to articulate how the alleged procedural constraints materially altered the tribunal's substantive conclusions. The Court's reasoning demands that applicants draw a direct, undeniable causal link between the procedural breach and the final financial or declaratory outcome.
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
This establishes a rigorous standard for due process challenges. Vague assertions of unfairness or theoretical disadvantage are entirely insufficient. Counsel must construct a detailed counterfactual analysis, providing a granular explanation of how specific excluded evidence, or denied procedural steps, would have definitively shifted the tribunal's findings. Without this counterfactual proof, a challenge under Article 41(2)(a)(ii) is doomed from inception.
Perhaps the most critical strategic lesson from the judgment concerns the misuse of the public policy exception. The Claimant sought to re-litigate the substantive commercial dispute by framing a massive volume of alleged factual and legal errors as violations of UAE public policy.
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
This scattergun tactic represents a fundamental misunderstanding of the DIFC's supervisory jurisdiction. The public policy gateway under Article 41(2)(b)(iii) is exceptionally narrow. It is reserved for awards that offend fundamental notions of justice, morality, or the core economic interests of the State, not for correcting a tribunal's routine misapplication of contract law or misinterpretation of witness testimony. To argue that an award is in conflict with UAE public policy requires a demonstration that the award violates a principle authoritatively articulated in the broader legal framework of the jurisdiction. As the Court clarified regarding the interplay between local and federal norms:
It follows that if a part of the UAE’s public policy was authoritatively articulated in Dubai law, it would be an articulation of the public policy of the UAE for the purposes of DIFC law, too.
Justice Al Sawalehi was unequivocal in shutting down the Claimant's backdoor appellate strategy. The DIFC Courts consistently refuse to act as a court of appeal for arbitral awards, a principle fiercely protected across the jurisdiction's jurisprudence.
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
For practitioners, the directive is absolute: if the grievance is rooted in the tribunal's substantive findings, the DIFC Court is not the appropriate forum for redress. The explicit judicial recognition of an attempt by the Claimant to have the merits of the Award reviewed serves as a warning that judges will easily see through creative drafting designed to disguise an appeal as a jurisdictional challenge. This aligns with the broader pro-arbitration stance seen in related precedent, such as ARB-009-2019 ARB 009/2019 Ocie v Ortensia, where the integrity of the arbitral process is shielded against unwarranted judicial interference.
The strategic calculus for challenging an award must heavily factor in the DIFC Court's willingness to penalise parties who pursue baseless set-aside applications. The comprehensive dismissal of all eight grounds culminated in a straightforward, adverse costs order against the Claimant.
The Claimant shall pay the Defendant its costs of these proceedings on the standard basis, to be assessed by a Registrar if not agreed.
While costs were awarded on the standard basis in this instance, the sheer volume of dismissed grounds—many of which failed to even engage specific provisions of the Arbitration Law—signals a severe risk of indemnity costs in future cases involving similarly unmeritorious approaches. The directive that costs will be assessed by a Registrar if not agreed ensures that the financial consequences of a failed challenge are swiftly quantified and enforced. Counsel must rigorously vet potential challenges, discarding weak arguments rather than throwing everything at the wall to see what sticks. The approach seen in ARB-027-2024: ARB 027/2024 Nalani v Netty reinforces this reality: procedural obstruction and meritless appeals carry a heavy financial price, and the courts will not hesitate to shift the economic burden of delayed enforcement onto the obstructing party.
Ultimately, the ruling demands that practitioners adopt a proactive, rather than reactive, approach to arbitral procedure. Objections must be raised contemporaneously during the arbitration, and any post-award challenges must be strictly confined to the narrow statutory grounds, supported by clear, counterfactual evidence of prejudice. Attempts to re-litigate the merits under the guise of public policy will fail and will result in adverse costs. For enforcement strategies, the judgment provides a robust shield for award creditors, confirming that the DIFC Courts will swiftly dispose of tactical, multi-ground challenges designed merely to delay execution.
What Issues Remain Unresolved in the Wake of Lachesis?
The dismissal of the set-aside application in Lachesis v Lacrosse [2021] DIFC ARB 005 establishes a formidable barrier against backdoor merits appeals, yet it simultaneously exposes the fluid boundaries of judicial discretion under Article 41(2) of DIFC Law No. 1 of 2008 (the Arbitration Law). H.E. Justice Shamlan Al Sawalehi’s reasoning relies heavily on the permissive statutory language—specifically the word "may"—to preserve the Court's supervisory flexibility. While the immediate outcome for Lacrosse was a decisive victory that protected a Ladonna-seated award, the jurisprudence leaves open critical questions regarding exactly how extreme a procedural failure must be to compel judicial intervention.
The first unresolved issue centers on the threshold for procedural irregularities and the limits of party autonomy. The Claimant advanced a highly technical argument under Ground 1, asserting that the arbitral tribunal failed to sign every page of the award, a direct violation of Article 37(4) of the LADONNA Arbitration Rules. Because the parties had explicitly agreed to these institutional rules, the Claimant posited that this deviation meant the arbitral procedure was not in accordance with their arbitration agreement, thereby mandating nullification under Article 41(2)(a)(iv). Justice Al Sawalehi rejected this mechanistic approach. He ruled that even if a procedural defect exists and technically breaches the agreed-upon rules, it merely enlivens the Court's discretion; it does not dictate a mandatory set-aside. The Court retains discretion to set aside awards for extreme procedural failures, but it will not act as a draconian enforcer of empty formalism.
This discretionary framework places a heavy evidentiary burden on future applicants. It is no longer sufficient to merely identify a procedural breach; a party must actively persuade the Court why its discretion should be exercised to vacate the award. The Claimant in Lachesis failed to clear this hurdle, having effectively merely stated that 41(2)(a)(iv) is engaged without addressing the discretionary element. Consequently, the exact parameters of an "unforgivable" procedural defect remain undefined. Will a tribunal's failure to hold a requested oral hearing suffice? What about the late admission of highly prejudicial expert evidence? By refusing to draw a bright line, the Court ensures that the tension between party autonomy and court supervision continues to evolve on a strictly case-by-case basis.
Closely tied to this procedural threshold is the elusive concept of prejudice. The Court's refusal to intervene was heavily influenced by the Claimant's inability to demonstrate that the procedural missteps actually harmed its substantive position. The definition of 'prejudice' remains a fact-specific inquiry, one that demands a clear causal link between the tribunal's error and the final disposition of the case. Justice Al Sawalehi articulated this stringent requirement when addressing the Claimant's assertion that it was unable to present its case:
The Claimant agreed to arbitration under the LADONNA Rules, but it has not demonstrated that it was unable to present its case in any way in breach of those rules. Moreover, while it has stated that the Award would have been different had it been allowed to take the steps it says it was not allowed to, it has not explained how exactly the Award would be different.
This passage establishes a strict "but-for" test for prejudice in DIFC set-aside applications. An applicant must not only identify the procedural straightjacket they were allegedly placed in but must also map out the alternative reality: how the excluded evidence or denied procedural step would have materially altered the tribunal's findings. This echoes the rigorous standards seen in parallel enforcement disputes, such as ARB-009-2019 ARB 009/2019 Ocie v Ortensia, where the integrity of the arbitral process is presumed unless concrete, quantifiable harm is proven. The burden of proving counterfactuals is notoriously difficult, and Lachesis provides little guidance on the standard of proof required to satisfy the Court's demand to know "how exactly" the outcome would have shifted.
Beyond procedural missteps, the ruling exposes unresolved tensions regarding the public policy exception under Article 41(2)(b)(iii). The Claimant attempted to weaponize UAE public policy to force a wholesale review of the tribunal's substantive findings. The sheer volume of the challenge was unprecedented for a summary set-aside application, transforming what should be a narrow supervisory review into a sprawling relitigation effort.
In its Detailed Particulars of Claim, the Claimant highlights over 40 alleged errors in the Award – pertaining to questions of law and questions of fact (the “Errors”) which need not be recounted here – and says that the Errors render the Award as being in conflict with UAE public policy.
By framing over 40 alleged errors of law and errors of fact as a public policy violation, the Claimant sought to bypass the fundamental principle that the DIFC Court does not review the merits of an arbitral award. Justice Al Sawalehi swiftly dismantled this strategy, characterizing it as a transparent attempt to treat the supervisory court as an appellate tribunal. The Court's rebuke was unequivocal:
As a final remark, in my judgment, Ground 4 – a ground comprised of over 40 alleged errors of law and errors of fact in the Award – is an attempt by the Claimant to have the merits of the Award reviewed, by way the UAE public-policy gateway of Article 41(2)(b)(iii) of the Arbitration Law, as a party to litigation might do so by way of an appeal.
While the Court firmly closed the door on using public policy as a Trojan horse for merits appeals, the substantive content of UAE public policy in the context of DIFC arbitration remains somewhat opaque. The ruling confirms that if a specific legal principle is authoritatively articulated in Dubai law, it simultaneously represents the public policy of the UAE for the purposes of DIFC law. Yet, the practical application of this doctrine remains untested in borderline cases. What happens when an onshore public policy principle—such as strict rules regarding the capacity of signatories or specific commercial agency protections—clashes directly with the DIFC's pro-arbitration stance?
The Claimant in Lachesis attempted to raise a related incapacity argument under Ground 2, but the Court dismissed it summarily, noting the arguments do not concern incapacity for the purposes of Article 41(2)(a)(i). The precise contours of what would constitute a valid incapacity claim under that specific statutory provision, or a genuine public policy violation that does not merely masquerade as an error of law, remain subjects for future litigation.
Furthermore, the decision highlights a strict approach to waiver and the timely correction of technical errors, leaving little room for strategic delay. The Court pointed out that if the Claimant genuinely believed the lack of signatures or other minor defects compromised the Award, the Arbitration Law provided a specific, time-bound mechanism for redress.
Moreover, as the Defendant has argued, pursuant to Article 40(1)(a) of the Arbitration Law, if the Claimant determined that there were in the Award “any errors in computation, any clerical or typographical errors or any errors of a similar nature,” it had 30 days upon receipt of the Award to request that those errors be corrected.
By failing to utilize this internal arbitral mechanism within the statutory window, the Claimant effectively forfeited its right to rely on those same technicalities as grounds for nullification before the DIFC Court. This strict adherence to procedural timelines mirrors the Court's unforgiving approach to delay seen in ARB-005-2014: Eava v Egan [2014] ARB 005, reinforcing the principle that parties cannot hoard procedural objections as an insurance policy against an adverse outcome. A party that spots a clerical or typographical error must raise it with the tribunal immediately; attempting to spring it on the supervisory court months later will be viewed not as a legitimate grievance, but as an act of procedural opportunism.
Ultimately, Lachesis cements the DIFC Court's reputation as a fiercely pro-arbitration jurisdiction that will aggressively defend the finality of arbitral awards against scattergun challenges. However, by anchoring its dismissal in the discretionary language of Article 41(2) and the Claimant's failure to prove specific prejudice, the Court has ensured that the boundaries of its supervisory jurisdiction will continue to be probed. Future applicants will undoubtedly arrive armed with more sophisticated counterfactuals, attempting to prove exactly how a procedural misstep altered their fate. Until the Court is presented with a case where a procedural failure is both undeniable and demonstrably prejudicial, the exact limits of its tolerance for arbitral imperfection will remain one of the DIFC's most compelling unresolved questions.