Regulatory change makes the Middle East more attractive for (re)insurers

For example in Dubai, the opening of the DIFC-LCIA Arbitration Centre (the Centre) and the recent issue of a new Dubai International Financial Centre (DIFC) Arbitration Law, now provides an accessible and credible forum for international commercial arbitration. Some of the benefits to the international market were outlined by Wayne Jones, a partner in Clyde & Co's Abu Dhabi office.

"There is no doubt that confidence in doing business in the region will increase as a result of having a useful and comprehensible dispute resolution process available," commented Mr Jones. "Especially one that is based on the English model with which international businesses will be familiar.

"For example, parties are free to choose a language other than Arabic for the conduct of arbitration. This means that regionally-based parties, that have previously favoured arbitration in traditionally English language forums, should now find comfort from the fact that the Centre offers them the same freedom on their doorstep.

"Another less publicised aspect has been the provision of a mediation service. The inclusion of a mediation provision in commercial contracts is becoming increasingly popular given the potential savings of time and cost, and the convenience of having a local service can only be another string the Centre's bow."

Some of the challenges posed by the fast-changing face of regulation in the region are evident from the establishment of the Qatar Financial Centre. The QFC permits firms to operate in Qatar using principle-based regulation international standards, modelled closely on the laws used in other major financial regulators - for example, the FSA. This has transformed the face of Qatar insurance regulation which is based on legislation last updated in 1966.

Glenn O'Brien, a senior lawyer who has spent the last 3 years in Qatar said:

"This is the perfect example of where the new world meets the old. The QFCRA has announced that it intends to introduce integrated financial services regulation for the whole of Qatar by 2010. This will include the challenge of aligning traditional Arab courts, based on local and Sharia laws, with the new QFC courts. Another significant challenge will be harmonising the modern approaches of the QFC with the more traditional 'form-based' approach adopted by the government ministries in the past."