Unlocking arbitration: evolving legal standards for commercial agency disputes in Jordan and the UAE
Authors: Aladaseen Mohammed A. 
Published: January 2025

Purpose

The purpose of this paper is to provide an in-depth analysis of the historical restrictions imposed by the UAE and Jordan on the arbitrability of agency disputes, driven by public policy considerations to protect local agents. It examines recent developments in UAE arbitration law and their alignment with global trends in international arbitration. The study evaluates how these reforms balance local agency interests with contractual autonomy. By offering comparative perspectives, the paper provides valuable lessons for Jordan and other restrictive nations in the Arab world to modernize their arbitration frameworks, reconcile domestic and international priorities, and enhance their appeal for international trade and investment.

Design/methodology/approach

This paper examines the legal framework for arbitrating commercial agency disputes in Jordan and the UAE, two civil law jurisdictions with a shared tradition but distinctly different approaches. While the UAE’s 2022 reforms have clarified questions regarding arbitrability and aligned its legal framework with internationally recognized standards, Jordan’s framework has retained a framework that tends to be constrained by uncertainties within its domestic laws and an excessive reliance on court jurisdiction. These uncertainties undermine the effectiveness of arbitration, limit access to justice and create problems, particularly for international businesses that value what the arbitration provides. The paper, through a comparative analysis, highlights the gaps in Jordan’s arbitration framework and identifies lessons from the UAE’s balanced reform. It provides actionable recommendations for Jordan, including clarifying arbitrability, reducing court interference and harmonizing domestic laws with international arbitration norms, such as the New York Convention. These steps could enhance Jordan’s dispute resolution system, promote legal certainty and create a business-friendly environment. Thus, it encourages economic growth and international investments.

Findings

This study compares Jordan’s restrictive arbitration framework for commercial agency disputes with the UAE’s proactive reforms. The UAE’s 2022 legislative changes align its laws with international standards, balancing public policy considerations with arbitration autonomy, positioning it as a regional leader in dispute resolution. Conversely, Jordan’s framework suffers from ambiguities, excessive court reliance and limited application of the Kompetenz-Kompetenz principle, undermining arbitration’s effectiveness and discouraging investment. Key recommendations for Jordan include clarifying arbitrability, reducing judicial intervention and narrowing public policy considerations. Aligning with international standards would foster legal certainty, attract investments and promote Jordan as a hub for international commerce.

Practical implications

This study provides actionable insights for improving Jordan’s arbitration framework, addressing legal ambiguities and excessive court intervention in commercial agency disputes. By aligning domestic laws with international standards like the UNCITRAL Model Law and the New York Convention, Jordan can enhance legal certainty and arbitration’s effectiveness. Limiting judicial interference and clearly defining public policy considerations will create a more business-friendly environment. These reforms not only strengthen access to justice but also cross-border commerce. Learning from the UAE’s balanced approach, Jordan can position itself as a regional hub for efficient and reliable dispute resolution.

Originality/value

This research provides a unique contribution by highlighting the uncertainty surrounding the non-arbitrability of commercial agency disputes in Jordan, an area of significant legal importance that has yet to be thoroughly explored. By comparing Jordan’s approach with the UAE’s legislative framework before and after its 2022 reforms, the study offers a legal analysis of two civil law jurisdictions with similar legal traditions but differing approaches to arbitration in distribution disputes. The research sheds light on these contrasts, providing valuable insights into the evolving interplay between arbitration and commercial agency regulation in the region.