• Dubai Expands the Jurisdiction of the Dubai International Financial Centre (DIFC) Court
  • November 4, 2011
  • Law Firm: Norton Rose Canada LLP - Montreal Office
  • In a significant move, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has expanded the jurisdiction of the DIFC Court by signing a law on 31 October 2011 which allows any parties to use the English language DIFC Court to resolve commercial disputes (the New Law).

    Prior to the coming into force of the New Law the jurisdiction of the DIFC Court was restricted under Article 5(A) of The Law of the Judicial Authority at Dubai International Financial Centre, Law No.12 of 2004 (Judicial Authority Law). This, in summary, only granted the DIFC Court jurisdiction in relation to disputes that involved, arose from or related to the DIFC.

    The expanded jurisdiction of the DIFC Court is a significant development for parties conducting their business in, or with parties based in, the United Arab Emirates or the wider Gulf Cooperation Council. Parties can now contractually agree to resolve commercial disputes between them in the DIFC Court without first having to establish whether the dispute falls within the DIFC’s previously limited jurisdiction.

    The move is likely to be welcomed by both the legal and business communities. The DIFC Court, which uses electronic case management, has heard over 400 cases and as a consequence of which has begun to develop a body of case law covering a wide range of commercial disputes.

    The expanded jurisdiction of the DIFC Court will in due course result in an increase in its caseload because international parties may be more likely to wish to resolve their disputes in, what may appear to them as, a more familiar forum which uses the English language. As a result, parties will be able to take advantage of additional benefits associated with the use of the DIFC Court.

    For example, Article 12 of the DIFC Court (Interim Arrangements) Order No.1 of 2005 permits the registration of law firms and individuals with rights of audience to register with the DIFC Court for issuing and conducting proceedings. Therefore, in addition to providing parties with a greater choice of forum for resolving their commercial disputes, the New Law also provides greater flexibility to parties with regard to the appointment of their legal representatives.

    DIFC Court judgments are enforceable by the UAE Courts without a review of the merits of the case. Outside of the UAE a DIFC judgment once converted to a Dubai Courts judgment can be enforced in any country which has a mutual recognition treaty with the UAE.

    In light of the New Law, parties involved in existing disputes or negotiating contracts should consider the advantages of transferring existing cases to the DIFC Court and amending/inserting jurisdiction clauses in their contracts specifically agreeing to the DIFC Court jurisdiction.