Arbitration Law in Jordan
Arbitration Law in Jordan
Jordan's arbitration framework is well-established, and the country has made significant efforts to align its laws with international standards, making it a reliable jurisdiction for both domestic and international arbitration. The primary legal instrument governing arbitration in Jordan is the Jordanian Arbitration Law No. 31 of 2001, which was amended in 2018.
1. Legal Framework
The Jordanian Arbitration Law of 2001 provides the legal foundation for arbitration in Jordan, and the law is largely based on the UNCITRAL Model Law on International Commercial Arbitration, making it consistent with international arbitration standards.
Amendment in 2018: The 2018 amendments to the Arbitration Law aimed to enhance Jordan's arbitration framework by introducing clearer rules for arbitration procedures, and addressing issues related to the appointment of arbitrators, the enforcement of arbitral awards, and the recognition of international treaties.
International Treaties: Jordan is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), and it adheres to the principles set out by this treaty for the recognition and enforcement of foreign arbitral awards.
2. Arbitration Agreement
Arbitration in Jordan is based on the existence of a valid arbitration agreement. The Jordanian Arbitration Law specifies that arbitration can take place either as a result of a pre-dispute agreement or a post-dispute agreement.
Form: The agreement must be in writing, either in the form of a separate agreement or as a clause within a broader contract.
Enforceability: Courts in Jordan generally enforce arbitration agreements, but they may not enforce agreements that are deemed invalid or contrary to public policy. If a dispute arises, the parties can seek the enforcement of an arbitration agreement before the Jordanian courts.
3. Types of Arbitration
Jordan's arbitration law supports both domestic and international arbitration.
Domestic Arbitration: Arbitration involving parties that are based in Jordan. This can cover commercial, civil, and other disputes between local entities.
International Arbitration: Arbitration involving parties from different countries. The Jordanian Arbitration Law is designed to accommodate international disputes and is aligned with global standards to facilitate international trade and business.
4. Arbitration Procedure
The arbitration procedure in Jordan is flexible, allowing parties to select the rules and procedures that best suit their needs. If the parties do not agree on the procedural rules, the arbitral tribunal has the authority to determine the procedures.
Arbitrators: The parties are free to choose their arbitrators. If the parties cannot agree on an arbitrator, the Jordanian courts can intervene to appoint an arbitrator or tribunal.
Tribunal Composition: The number of arbitrators is typically agreed upon by the parties. Most arbitrations involve a panel of three arbitrators, but a single arbitrator may be used if agreed upon by the parties.
Arbitration Rules: Parties have the freedom to choose the rules governing the arbitration. If no choice is made, the tribunal will determine the rules. Commonly used rules include those of UNCITRAL, the International Chamber of Commerce (ICC), and the Jordanian Arbitration Law itself.
Language: The language of arbitration is decided by the parties. If they cannot agree, the tribunal will decide the appropriate language for the proceedings.
Place of Arbitration: The seat of the arbitration is typically agreed upon by the parties. If the parties do not specify a location, the tribunal will determine the place of arbitration, which could be in Jordan or another jurisdiction.
5. Court Involvement
Jordan’s arbitration system is designed to minimize court interference. However, the courts retain certain supervisory powers:
Appointment of Arbitrators: If the parties cannot agree on the appointment of arbitrators, they can apply to the Jordanian courts to appoint one or more arbitrators.
Interim Measures: The Jordanian courts have the authority to grant interim measures before or during arbitration to preserve the status quo, prevent harm to a party’s rights, or ensure the enforcement of an eventual arbitral award.
Setting Aside an Award: A party may challenge an arbitral award before the Jordanian courts if the award is alleged to violate the law or public policy. The grounds for challenging an award include:
- Lack of jurisdiction of the tribunal.
- Violation of due process or procedural fairness.
- The award is contrary to public policy in Jordan.
Recognition and Enforcement of Arbitral Awards: As a signatory to the New York Convention, Jordan will recognize and enforce foreign arbitral awards. A party wishing to enforce an arbitral award in Jordan must apply to the Jordanian courts for enforcement.
6. Recognition and Enforcement of Foreign Arbitral Awards
Jordan recognizes the validity of foreign arbitral awards under the New York Convention, making it a reliable jurisdiction for international arbitration.
Procedure for Enforcement: To enforce a foreign arbitral award in Jordan, the party seeking enforcement must apply to the Jordanian courts. The courts will assess whether the award complies with the requirements of the New York Convention.
Grounds for Refusal: A foreign arbitral award may be refused recognition and enforcement in Jordan on several grounds:
- The award is not in compliance with the New York Convention or the principles of international law.
- The party against whom the award is being enforced was not properly notified of the proceedings.
- The award violates public policy in Jordan.
7. Arbitration Institutions in Jordan
Jordan is home to several arbitration institutions that facilitate both domestic and international arbitration proceedings:
Jordanian Center for Arbitration (JCA): The JCA provides arbitration services and offers institutional rules to govern arbitral proceedings. It handles both commercial and investment disputes and is one of the main arbitration institutions in the country.
Jordanian Arbitration Court: This court is responsible for overseeing arbitration cases and ensuring that the proceedings comply with the Jordanian Arbitration Law. It assists in the appointment of arbitrators and provides oversight in specific instances where required.
International Arbitration Institutions: While Jordan does not have as many arbitration institutions as other jurisdictions, international arbitration rules and institutions like the ICC and UNCITRAL are often used in Jordan.
8. Challenges and Opportunities in Arbitration in Jordan
Challenges
Awareness and Acceptance: While Jordan has a robust arbitration framework, some parties may still prefer traditional litigation methods, particularly in commercial disputes, and there may be a lack of widespread awareness about arbitration benefits.
Court Involvement: Despite the emphasis on minimizing court interference, parties may still experience delays or complications when the courts are involved in the arbitration process, such as in the appointment of arbitrators or in challenging an award.
Opportunities
Strategic Location: Jordan’s geographical location and stability make it an attractive place for resolving disputes in the Middle East and North Africa (MENA) region.
Growing Reputation: With its adherence to international treaties and commitment to aligning its laws with international standards, Jordan is increasingly seen as an important arbitration hub in the MENA region, particularly for commercial and investment disputes.
International Investment: Jordan’s arbitration laws are designed to protect the interests of international investors, providing an attractive alternative to litigation for cross-border disputes.
Conclusion
Jordan’s Arbitration Law No. 31 of 2001, along with the 2018 amendments, provides a modern and flexible framework for both domestic and international arbitration. With its alignment to the UNCITRAL Model Law and membership in the New York Convention, Jordan is a reliable jurisdiction for resolving disputes through arbitration. While challenges such as awareness and court involvement may persist, the country's legal framework, strategic location, and growing reputation as an arbitration hub make it an increasingly attractive destination for dispute resolution in the MENA region.
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