Five years since their establishment, the Dubai International Financial Centre (DIFC) Courts have become a prominent feature of the legal landscape in Dubai. This article explores the ground breaking developments and major issues that have dominated the DIFC Courts agenda during the past year.

The DIFC is the world's fastest growing international financial centre. The brainchild of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE, Ruler of Dubai, the DIFC stands today as the embodiment of his vision to establish a gateway to financial markets in the Middle East. The establishment of the DIFC Courts was seen as pivotal to the development of the DIFC as a global financial centre and to date has played a critical role in attracting business to the DIFC, and therefore to Dubai. The laws establishing the DIFC Courts are designed to ensure the highest international standards of legal procedure, which in turn creates a legal and judicial environment that is conducive to trade, finance and investment and provides the certainty, transparency and efficiency expected by the global institutions operating within the DIFC.

The DIFC Courts were set up under two laws enacted by His Highness, Dubai Law No. 12 of 2004 established the Judicial Authority at the DIFC and sets out the jurisdiction of the Courts, while allowing for the independent administration of justice in the DIFC. DIFC Law No. 10 of 2004 outlines the powers, procedures, functions and administration of the DIFC Courts.

The DIFC Courts are an English language court based on the common law legal system, with rules of procedure drawn from the court rules of England and Wales (although with modifications to reflect best practices from around the world). Given the international, cross-border nature of financial disputes today, the courtroom itself is among the most technologically advanced in the world. The judicial bench is led by Chief Justice Sir Anthony Evans, a former English Court of Appeal Judge who regularly sits on the Cayman Court of Appeal and the Deputy Chief Justice, Justice Michael Hwang, a former Judicial Commissioner of the Supreme Court of Singapore and a world renowned arbitrator. Of the 8 judges on the DIFC Court bench, 6 are drawn from major common law jurisdictions around the world and who bring a wealth of international experience in commercial and civil cases and 2 are resident judges.

To date, the DIFC Courts have delivered judgment in a number of significant cases, with a case load that is likely to increase during 2010, if early indications are anything to go by. In addition to their judicial function, the DIFC Courts have also been active in ensuring transparency and integrity of their process and procedure as well as enhancing access to justice in the DIFC. These efforts have culminated in the signing of a number of protocols with the Dubai Courts as well as the establishment of a Pro-Bono Programme and Professional Code of Conduct. Importantly, the DIFC Courts have openly emphasised their close relationship with the Dubai Courts and on 16th June 2009, the DIFC Courts, and the Dubai Courts signed a landmark Memorandum of Understanding to formalise their ongoing cooperation. The memorandum reinforced the close ties between the two Courts and their ongoing commitment to collaboration and knowledge sharing in order to deliver world-class justice in Dubai and strengthen judicial cooperation at local, federal, regional and international levels.

Jurisdiction Protocol between DIFC Courts and Dubai Courts

One of the most fundamental issues to arise for consideration during 2009 concerned the jurisdiction of the DIFC Courts to hear and determine cases.

The DIFC Courts have exclusive jurisdiction established under Article 5A(1) of Dubai Law No.12 of 2004, The Law of the Judicial Authority of the DIFC. Article 5A(1) provides that the DIFC Court of First Instance shall have jurisdiction over:

  • Civil or commercial cases and disputes involving the DIFC or any of the DIFC's bodies or any of the DIFC's establishments.
  • Civil or commercial cases and disputes arising from or related to a contract that has been executed or a transaction that has been concluded in whole or in part in the DIFC or an incident that has occurred in the DIFC.
  • Objections filed against decisions made by the DIFC's bodies which are subject to objection in accordance with the DIFC's laws and regulations.
  • Any application over which the Courts have jurisdiction in accordance with the DIFC's laws and regulations.

Where the DIFC Court has jurisdiction, the jurisdiction of the Dubai Courts is specifically excluded except in relation to criminal and matrimonial matters. Jurisdiction is, therefore, partly territorial, partly based on the identity of the parties and partly based on the subject matter of the proceedings.

There are some cases that are clearly within the DIFC Courts' jurisdiction - these are civil and commercial cases which arise within the DIFC or to which a DIFC entity is a party, or where the references to contracts, transactions and incidents are clearly satisfied. Equally clear is a case where neither the parties nor their contract has anything to do with the DIFC, such a case would be outside the jurisdiction of the DIFC Courts as defined. Between these two extremes there will be borderline cases where issues as to the DIFC Courts jurisdiction will be raised and the relationship between the DIFC Courts and the Dubai local Courts will require further clarification.

For this reason, on 7th December 2009, the DIFC Courts and Dubai Courts signed a Protocol of Jurisdiction to clarify and interpret certain concepts relevant to the determination of jurisdiction that are not defined in the law and to identify the legal procedures for transferring cases between the Dubai Courts and the DIFC Courts, where appropriate.

The Protocol is not new law and does not replace the existing jurisdiction provisions that apply. Rather the Protocol is an attempt to navigate jurisdictional issues to assist parties in the drafting of their jurisdiction clauses and the filing of their claims so that parties know the correct court to which their cases should be submitted. In addition to the matters addressed in the Protocol, the following general principles are important to bear in mind:

  • The DIFC Court is not an opt-in jurisdiction, that is, parties with no other connection to the DIFC may not choose to submit to the jurisdiction of the DIFC Court where jurisdiction under Article 5A is not satisfied.
  • Parties may agree to submit to the jurisdiction of any other court in respect of matters which would otherwise come under the jurisdiction of the DIFC Courts.
  • The Dubai Courts have general jurisdiction except for the areas mentioned in the Protocol that come within the exclusive jurisdiction of the DIFC Courts.
  • In the event of a final judgment issued by either the Dubai Courts or DIFC Courts that they have no jurisdiction to hear a case, the parties may submit the case to the other Court to deal with the dispute according to the applicable procedural rules of that Court and subject to the procedures outlined in the Protocol.

The million dollar question that is often asked when matters of jurisdiction are debated is in relation to "coffee shop contracts", that is, if two people sign a contract in the DIFC Starbucks but the contract and the parties have no connection with the DIFC, does a dispute in relation to the contract come within the jurisdiction of the DIFC Courts? Whilst each case would have to be decided on its facts and to date this scenario has not been the subject of a DIFC Courts judgment, we can take some guidance from the Chief Justice Sir Anthony Evans who has previously commented in response to a similar question that,

"...in general terms the overall position is clear; the Courts only have jurisdiction in cases which are DIFC-related in one way or another. When they do have jurisdiction, the jurisdiction is "exclusive" i.e. to the exclusion of the Dubai Courts, which would otherwise have jurisdiction on territorial and maybe personal grounds."

What is indisputable is that there is an overriding principle, which informs the analysis as to whether the DIFC Courts have jurisdiction in any given dispute - in order for the dispute to fall within the DIFC Court's jurisdiction there must be a connection to the DIFC whether with respect to the subject matter, the location of the parties or the transaction concluded.

Enforcement Protocol between DIFC Courts and Dubai Courts

Second only to jurisdiction, one of the most important issues a litigant must consider when filing a case is the enforcement of the final judgment against the losing party. Issues relating to the enforcement of DIFC Court orders and judgments outside of the DIFC and conversely enforcement of Dubai Court orders and judgments within the DIFC dominated the minds of legal practitioners and judges alike in 2009.

In June 2009, the Dubai Courts and the DIFC Courts issued a Protocol of Enforcement to clarify enforcement procedures between the two courts and across the jurisdictions of the DIFC and Dubai as well as the UAE.

The Protocol established the following enforcement procedures where: (a) a judgment, award or order of the DIFC Courts (including arbitral awards ratified by the DIFC Courts) falls for enforcement outside the DIFC Courts' jurisdiction; and (b) a judgment, award or order of the Dubai Courts (including arbitral awards ratified by the Dubai Courts) falls for enforcement within the DIFC Courts' jurisdiction:

  • The judgment, award or order must be final and appropriate for enforcement.
  • It must be translated into English or Arabic where applicable by a legal translator ratified by the DIFC Courts' registry or the Dubai Courts' registry.
  • Accompanying the judgment, award or order there must be a letter from the relevant court registry to the court in which enforcement is sought requesting enforcement of the judgment, award or order.
  • The documents must be submitted to the nominated Execution Judge from time to time in the relevant court in which enforcement is sought. The Dubai Courts' Execution Judge will apply the UAE Civil Procedures Law and has no jurisdiction to review the merits of a judgment, award or order of the DIFC Courts. Conversely, the DIFC Courts' Execution Judge will apply the Rules of the DIFC Court and has no jurisdiction to review the merits of a judgment, award or order of the Dubai Courts.
  • The applicable enforcement fee shall be paid by the applicant to the Dubai Courts or DIFC Courts where applicable.
  • Any interim orders issued by either the Dubai Courts or the DIFC Courts shall be enforced by the same method as described above

Where a DIFC Courts' judgment is to be enforced outside of Dubai in another emirate, enforcement will proceed in accordance with the relevant civil procedure rules and procedures that apply with respect to the enforcement of Dubai Court judgments in other emirates.

Importantly, a DIFC Court judgment is given the same status and enforced in the same manner as a Dubai Court judgment and vice versa. This is particularly important when considering issues relating to enforcement of DIFC Court judgments outside the UAE, such as the GCC, where bi-lateral treaties exist in aid of the enforcement of judgments between GCC countries.

DIFC Courts Professional Code of Conduct

The lawyers practising in the DIFC Courts are in many ways a mirror of the multi-cultural melting pot that is Dubai. Currently lawyers from a mix of 94 different nationalities and with varying qualifications and professional backgrounds are representing clients in the DIFC Courts.

The need to guarantee that all practitioners dealing with the DIFC Courts operate to the highest standards of professional conduct to ensure transparent, swift and accessible justice led to the implementation of a Professional Code of Conduct for Legal Practitioners on 27th September 2009 pursuant to Practice Direction No.2 of 2009. This is one of the first codes of its kind in the region, and is directed to identifying a standard of conduct with which all legal practitioners must comply. All lawyers registered with the DIFC Courts will be required to act with the utmost integrity and independence, in support of the Court and the communities it serves, or be sanctioned, per the guidelines.

The DIFC Courts Code for Professional Conduct is another step towards ensuring that all parties to a dispute have access to lawyers committed to professional standards of advocacy. Compliance with the Code will ensure that cases heard in the Courts are conducted in a timely and proficient manner and that all parties can be sure of receiving fair, consistent representation. The rules focus on six areas: the Courts' Governing Principles, duties owed to the Courts, duties owed to clients, duties owed to other Practitioners, general duties and sanctions for breach of the Code.

DIFC Courts Pro-Bono Programme

Access to justice is one of the pillars of any legal system. In October 2009, following a one month consultation period and as part of its aim to make justice accessible to all, the DIFC Courts implemented the DIFC Courts' Pro Bono Programme pursuant to Practice Direction No.3 of 2009. The DIFC Courts' Pro Bono Programme allows individuals who cannot afford a lawyer the ability to seek free advice and representation from lawyers registered with the DIFC Courts.

The DIFC Courts' Pro Bono programme is the first of its kind in the region, and was created to address a need in the community for access to justice. All of the services offered as part of the Pro Bono programme, ranging from basic advice to full case management and representation in proceedings, will be delivered to eligible individuals approved by the DIFC Courts registry office. Subject to meeting the eligibility criteria, the individual will then be assigned a legal representative, selected from a register of volunteer lawyers, and offered legal assistance for the duration of their case, free of charge. This new initiative will ensure that all parties are on equal footing in proceedings before the Court.

To ensure consistency of representation, information and procedures, guidelines in relation to the Programme are published on the DIFC Courts' website.

Law firms and individual practitioners who wish to volunteer must be registered and in good standing under Part 1 of the DIFC Courts' list of registered practitioners. In order to take advantage of the pro bono services offered, a pro bono litigant must apply to the Programme Leader briefly describing the nature of their claim and the type of remedy sought. Eligibility for the Programme (and to continue to retain free legal services), requires the pro bono litigant to provide evidence that he or she cannot afford a lawyer. Based on that evidence, the Programme Leader decides whether the litigant is eligible for the Programme, which decision shall be final. The pro bono litigant must also notify the volunteer practitioner and the Programme Leader if, at any time during the pro bono representation, his or her financial position changes such that he or she is, or will be able, to retain a lawyer.

Importantly, volunteer practitioners must ensure that pro bono litigants and matters are administered and handled to the same high standards as for their paying clients.

Whilst this programme is the first of its kind in the region it has been welcomed by litigants and practitioners alike who recognise that a commitment to ensuring that access to justice is made available to all is a cornerstone of our judicial system. A number of pro bono litigants have already approached the DIFC Courts for assistance. In unequivocal support of the Programme, Al Tamimi & Company was the first volunteer firm to be registered with a number of other firms following suit.

Conclusion

The DIFC Courts have taken decisive steps in 2009 to reinforce their position as a world renowned legal system that is transparent, reliable, accessible and efficient whilst staying true to Courts' mission to provide access to justice and consistently dispense equal justice according to the law and international best practice. Whilst 2009 was a pivotal year in the development of the DIFC Courts which witnessed the introduction of significant protocols and initiatives designed to enhance access to justice, led by the DIFC Courts Registrar, Mr Mark Beer, and a distinguished panel of judges, 2010 will no doubt see the DIFC Courts continue to develop the standards of legal procedure and process to provide the certainty, transparency and efficiency expected by the institutions operating within the DIFC.

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