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When parties choose arbitration, they often assume that the institutional rules they select will govern the process end-to-end. But what happens when those rules collide with the mandatory law of the seat? The Abu Dhabi Global Market (ADGM) Court of Appeal's recent decision confirms the answer: the law of the seat will prevail.
The case of A30 v E30 [2025] ADGMCA 0003 is a timely reminder that the seat of the arbitration is not just a technical detail. It determines which courts can step in and what mandatory laws apply – laws that can override institutional rules and even party agreement.
Background
The appellants were a consortium of banks led by A30, which financed a major development project. The respondents were parties entitled to receive payments under various project agreements. Under the financing arrangements, the appellants issued guarantees to the respondents' counterparties, on the basis that all payments to the respondents were required to flow into a designated collection account with A30.
When the guarantees were enforced against A30, the banks sought reimbursement from the collection account. However, they then discovered that the respondents had diverted funds away from the collection account, in breach of the financing arrangements.
The banks commenced LCIA arbitration to recover the payments under the guarantees and the diverted funds. During the arbitration, the banks discovered that the respondents were about to receive further payments and feared that those funds would be dissipated. To prevent this, the banks applied to the ADGM courts – the seat or supervisory courts of the arbitration – for a worldwide freezing order.
The catch was that Article 25.3 of the LCIA Rules requires tribunal consent before any court application for interim relief, which the banks had not obtained. The ADGM Court of First Instance therefore refused the application, ruling that the appellants had breached the agreed LCIA Rules.
Court of Appeal's decision
On appeal, the ADGM Court of Appeal overturned the first instance decision and granted a worldwide freezing order for up to US$250 million.
In particular, the Court noted that section 31 of the ADGM Arbitration Regulations 2015 (Arbitration Regulations) gives the ADGM courts power to grant interim measures before or during arbitration, even if the parties agree otherwise. Section 31 is expressly listed as a mandatory provision in the Arbitration Regulations, which would "have effect notwithstanding any agreement to the contrary" (section 9).
Although section 31 limited court intervention to situations where the tribunal lacked power or could not act effectively, the Court found that any application to the tribunal here would have been futile: it would have alerted the respondents who would have dissipated their assets before relief could be granted.
Concluding thoughts
Through A30 v E30, the ADGM courts have demonstrated a pragmatic approach in granting urgent relief in support of arbitration proceedings – even without notice to the other party – where justified. This reinforces confidence in choosing ADGM as the seat of arbitration, as freezing orders and similar interim measures are often essential to ensure that an award is not just symbolic but effectively enforceable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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