Yemen

The Yemeni legal system is improving in recent years, however still legal decisions are not executed according to international standards. Hence, national and international trade requires alternatives for disputes resolution. Two arbitration centers are currently operating in Yemen and offer businesspeople an alternative to court based adjudication, this creates investment-friendly atmosphere as arbitration is a very important alternative for providing legal certainty when the court system continues to develop.
The Arbitration Law in Yemen is based on Shari’ah Law. Currently, arbitration in Yemen is governed by Law No 22 of 1992, as amended in 1997 (“the Arbitration Law”) which regulates national and international arbitration in the field of commercial transactions. It offers parties a legal base for maximum flexibility in procedural law, while upholding international standards of arbitration.
Arbitration is defined as a dispute resolution procedure when the parties agree to appoint one or several third parties in order to arbitrate the disputes or conflicts which might arise between them, without resorting to the competent court. This decision of the parties and their choice of this method of dispute resolution should be respected. Yemen’s first Center for Conciliation and Arbitration was established in Sana in 1997 specifically for addressing the needs of commercial and private arbitration.
According to Article 5 of the Yemeni Arbitration Law, arbitration may not take place on the following matters: (a) “forbidden” things, divorce for adultery by women and the dissolution of the marriage; (b) challenge of judges; (c) disputes relating to forced enforcement; (d) questions which may not be subject to a settlement out of court; (e) matters related to public order.
According to Article 19, “a court which was seized of a dispute or conflict which is subject to an agreement to arbitrate, must refer the parties to arbitration except in the following cases: (a) if the court notes that the agreement to arbitrate is expired, ineffective or does not concern the dispute referred to it; (b) if the parties continue the legal proceedings before the court, the agreement to arbitrate is held to be non-existent.”
The courts in Yemen are involved to determine the arbitral tribunal jurisdiction. According to Article 24 of the Yemeni Arbitration Law, “the request for removal of an arbitrator must be made to the competent court within one week of the notification of the appointment of the arbitrator to the challenging party or of its becoming aware of the circumstances justifying the challenge. The court, using summary proceedings, shall rule on the question within one week. If the court rejects the request, the author of the request may appeal against this decision before the Supreme Court within two weeks as of receipt of this judgment. If the competent court does not rule on the request for challenge within one week, the court shall be held to have rejected the request at the expiry of this time-period.” The request for challenge can also be presented to the arbitral tribunal and the same procedure described above, shall be applied.
The principle of Kompetenz-Kompetenz, meaning that the tribunal decides whether it can hear a case or not, without intervention of a court is recognized in Yemen and according to Article 28 “the arbitral tribunal has jurisdiction over its own jurisdiction including arguments as to the non-existence, expiry or voidness of the agreement to arbitrate or arguments to the effect that the subject-matter of the dispute was not included in the agreement to arbitrate. If the arbitral tribunal rejects such arguments, a recourse against this decision may be made before the Court of Appeal within one week following notification thereof.
Regarding the order of provisional measures, Article 30 of the Arbitration Law stipulates that “upon request of one of the parties, the arbitral tribunal may order the other party to make any provisional or conservatory measure it deems necessary. If such party refrains from performing the order, the arbitral tribunal may, upon request of the other party, authorize the latter to perform this measure itself and the cost thereof is to be borne by the defaulting party.”
Regarding the assistance of local courts, Article 43 of the Arbitration Law explains that “the arbitral tribunal or any of the parties may request the assistance of the competent court for production of evidence or any provisional or conservatory measures. The arbitral tribunal may also request the court to settle questions which are not of its jurisdiction; this does not entail a suspension of the arbitral proceedings.”
As a control mechanism, the Arbitration Law requires that arbitration decisions (ahkâm al-muhakkamîn) be registered at the competent court, as Article 50 clarifies that “the arbitral tribunal shall register the original of the award or the injunctions it makes, accompanied with the agreement to arbitrate, with the Secretariat of the competent court within thirty days following the making of the award. The Secretariat shall record this registration. The parties may request communication of the copy of this record.”
The means of recourse to dispute are laid down in Article 53 of the Arbitration Law, the validity of the arbitral awards follow the grounds of refusal for recognition and enforcement of the arbitral awards, enumerated in Article V of the New York Convention with one addition of violation of Shari`a law. According to the above mentioned article, “without prejudice to the provisions hereof, the avoidance of the award may only be requested in the following cases: (a) if the award was made without agreement to arbitrate or if the agreement to arbitrate was null or void or expired; (b) if one of the parties lacked capacity; (c) if there was an irregularity in the proceedings; (d) if the arbitral tribunal exceeded its mission; (e) if the arbitral tribunal was constituted in a manner contrary to the agreement to arbitrate; (f) if the award was not reasoned; (g) if the award is against the provisions of the Moslem Shari'a or public order. In all other cases, awards made in compliance with this Act are not subject to the means of recourse foreseen in the Code of Civil and Commercial Procedure.”
The Court of Appeal may set aside an award on its own motion in the following cases: “(a) if the award was made on an unarbitrable question; (b) if the award is against public order or the provisions of the Moslem Shari'a”, as stipulated in Article 55 of the Yemeni Arbitration Law. Consequently, all arbitration decisions ultimately must comply with the rules of the Islamic Shari`a.
It is worth noting that according to Article 57 “awards become final and enforceable after expiry of the time-period for making an appeal if no request for setting-aside was made or if such a request was made and rejected by the court.”
The following conditions must be satisfied in order to obtain the leave for enforcement of the arbitral awards, as stipulated in Article 60, “leave to enforce shall only be granted if the award: (a) has become final and enforceable; (b) is not contrary to a final judgment already given by the courts; (c) was made in compliance with the provisions hereof.”
Arbitration can be initiated only with a prior written agreement of both parties,
be they private persons, companies, or tribes. Judges cannot act as arbitrators in cases pending before
them, even if the parties request so.
Based on these 1997 amendments, one can conclude that in Yemen Shari`a rules are designated as the ultimate legal reference for all arbitrations. The court is entitled to review the arbitral award only when an official appeal is initiated by one of the parties, and on grounds specified by the
Arbitration Law (Arts. 53-55).
Yemen is not a signatory state to the NYC and certainly, modernization of the arbitration system is required. The New York Convention is the contemporary instrument to deal with the international arbitration system, in terms of recognition and enforcement of arbitration agreement and international arbitral award. Moreover, adequate arbitration legislation serving the needs of the business parties brings positive effects to the national economy of the states. In Yemen due to some tribal and political intervention the enforcement of the arbitral awards does not happen smoothly.