Jurisdiction Focus: Difc Court Laws Explained

The Dubai International Financial Centre (DIFC) Courts are two-tier English language courts within the Dubai courts system. They were established in 2005 to determine civil and commercial disputes within their statutory jurisdiction. Unlike the Arabic language courts within the Dubai courts system, the DIFC Courts apply common law legal principles and follow common law procedures. The DIFC Courts will apply any law chosen by the parties or, in the absence of an agreement, the Court will determine the applicable law. The DIFC Courts have jurisdiction over civil and commercial matters only and do not deal with criminal matters.

The DIFC Courts apply common law legal principles and procedures

The Dubai International Financial Centre (DIFC) is a financial free zone with a unique, independent legal and regulatory framework. The DIFC Courts are an independent English-language common law judiciary based in the DIFC. Unlike the Arabic language courts within the Dubai courts system, the DIFC Courts apply common law legal principles and follow common law procedures.

The DIFC Courts were established in 2005 by Dubai Law No. 12 of 2004 (as amended by Law No. 16 of 2011) and Dubai Law No. 10 of 2004. The DIFC Courts are part of the sovereign structure of the Emirate of Dubai, within the UAE and independent from the Dubai Courts and Government of Dubai.

The DIFC Courts consist of the Court of First Instance (CFI) and the Court of Appeal (CA). The CFI has exclusive jurisdiction over any civil or commercial case when it relates to the DIFC. The CA has exclusive jurisdiction over appeals filed against judgments and awards made by the CFI, as well as the interpretation of any article of the DIFC's laws, upon the request of any of the DIFC's establishments. The CA is the highest court in the DIFC Courts and its decisions cannot be appealed.

The DIFC Courts have jurisdiction over civil and commercial matters occurring within the DIFC, as well as international jurisdiction. This means that where the DIFC Courts have jurisdiction, it will exclude the jurisdiction of the Dubai Courts. However, the DIFC Courts do not have jurisdiction over criminal, family, or matrimonial matters.

The DIFC Courts apply the DIFC's laws and regulations unless the parties explicitly agree that another law governs their dispute. The DIFC Courts will apply any law chosen by the parties or, in the absence of an agreement, such law as the Court determines applicable. The DIFC laws allow any institution operating within the DIFC to select a legal jurisdiction of its choice, other than the DIFC, when entering into contracts. However, if the parties do not do so, the DIFC laws are applicable by default, and they can file a case in the DIFC Courts.

The Justices of the DIFC Courts are generally from common law jurisdictions, including Australia, England and Wales, New Zealand, Malaysia, and Singapore. Foreign-qualified lawyers can obtain rights of audience in the courts relatively easily as long as they are competent in the English language.

The DIFC Courts' jurisdiction

The DIFC Courts were established in 2005 to determine civil and commercial disputes within their jurisdiction. The DIFC Courts are independent of the Dubai Courts and Government of Dubai and are part of the sovereign structure of the Emirate of Dubai, within the UAE.

The DIFC Courts consist of the Court of First Instance (CFI) and the Court of Appeal (CA). The CFI has jurisdiction over civil or commercial cases in accordance with the DIFC's laws and regulations, and the CA has jurisdiction over appeals filed against awards and judgments made by the CFI. The CA can also provide an interpretation of any article of the DIFC's laws, upon request by any of the DIFC's bodies or establishments.

The DIFC Courts have jurisdiction over civil, commercial, and certain regulatory matters only. They do not have jurisdiction over criminal, family, or matrimonial matters.

The DIFC Courts apply the DIFC's laws and regulations unless the parties explicitly agree that another law governs their dispute. In the absence of an agreement between the parties, the DIFC Courts will apply any law that the Court determines to be applicable.

The DIFC Courts also have a Small Claims Tribunal (SCT) with the power to hear and determine "small" claims within the jurisdiction of the DIFC Courts. The SCT can hear cases related to the DIFC, where the amount of the claim or the value of the subject matter does not exceed specified thresholds, as well as non-employment-related cases where the amount of the claim or the value of the subject matter does not exceed AED 500,000, and all parties agree in writing.

The DIFC Courts' enforcement powers

The DIFC Courts have the power to enforce judgments, orders, or awards made or ratified by the DIFC Courts within the DIFC. The Chief Justice shall appoint a Judge of the First Instance Court as an Executive Judge with the jurisdiction to issue Execution Orders within the DIFC.

The DIFC Courts have the power to make orders and give directions as to the conduct of any proceeding before the DIFC Courts that it considers appropriate. This includes:

• Orders prescribed by any legislation under DIFC law
• Injunctions, including requiring an act to be done
• Interim or interlocutory orders
• Orders made without notice to any other party and the circumstances in which such orders are appropriate
• Orders made in the interest of justice
• Referral of matters to the Attorney General of Dubai

The DIFC Courts can enforce their judgments, orders, or awards locally, regionally, and internationally through treaties such as the GCC Convention and Riyadh Convention, conventions with China, India, and France, and reciprocal arrangements with leading commercial courts in top financial hubs like New York, Singapore, London, and Hong Kong.

The DIFC Courts may also waive any procedural requirements if they are satisfied that an applicant is unable to meet them.

The Small Claims Tribunal (SCT)

The SCT offers a streamlined procedure that facilitates swift resolutions of disputes. The filing fees for commercial and civil matters are 5% of the claim value with a minimum of $100. The fee for filing an appeal to the CFI is 2.5% of the claim value with a minimum of $100. The filing fees for employment claims are 2% of the claim value with a minimum of $100. The fee for filing an appeal to the CFI following an employment claim in the SCT is 1% of the claim value with a minimum of $100.

The SCT can hear claims within the jurisdiction of the DIFC in three situations. Firstly, where the amount or value of the claim does not exceed AED 500,000. Secondly, when the claim relates to the employment or former employment of a party and the amount or value of the claim exceeds AED 500,000, and all parties to the claim elect in writing that it be heard by the SCT. There is no value limit for the SCT’s elective jurisdiction in the context of employment claims. Thirdly, if in the context of claims that are not employment-related, the amount or value of the claim does not exceed AED 1 million, and all parties elect in writing that it be heard by the SCT. Such an election can be made in the underlying contract (if any) or subsequently.

The SCT can hear any case that is related to the DIFC, where the amount of the claim or the value of the subject matter of the claim does not exceed AED100,000 or AED200,000 for employment matters. It can also hear cases where the claim pertains to an employment issue of any amount, and both parties to the claim elect in writing that it be heard by the SCT. Additionally, it can hear non-employment-related cases where the amount of the claim or the value of the subject matter of the claim does not exceed AED500,000, and all parties to the claim elect in writing that it be heard by the SCT.

The SCT can also hear any case that is not related to the DIFC, where both parties consent to using the SCT and either i) where the amount of the claim or the value of the subject matter of the claim does not exceed AED 500,000 or ii) where the claim is related to an employment issue of any claim amount.

Hearing dates are set fairly quickly in comparison to the traditional court system in Dubai, leading to faster judgments and resolutions. Although it is recommended to seek legal counsel, small businesses and individuals can navigate the SCT with relatively diminutive legal knowledge and expertise.

The DIFC Courts' judges and justices

The DIFC Courts are independent of the Dubai Courts and the Government of Dubai, and they have jurisdiction over civil and commercial matters, including disputes, nationally, regionally, and worldwide. The Courts began operations in 2006 and consist of two tiers: the Court of First Instance (CFI) and the Court of Appeal (CA).

The CFI hears cases where the amount in dispute exceeds Dhs100,000 and has exclusive jurisdiction over any civil or commercial case related to the DIFC. The CA, comprising at least three judges, including the Chief Justice, deals with a variety of civil and commercial disputes. It has exclusive jurisdiction over appeals filed against judgments and awards made by the CFI, the interpretation of any article of the DIFC's laws, and is the highest court in the DIFC Courts.

The DIFC Courts' justices and judges are appointed by the Chief Justice of the DIFC Courts. The Chief Justice is also responsible for administering the courts and their circuits or divisions. The justices are generally from common law jurisdictions, including Australia, England and Wales, New Zealand, Malaysia, and Singapore.

The current Chief Justice is Justice Zaki bin Azmi from Malaysia. The Deputy Chief Justice is H.E. Justice Omar Al Muhairi from the UAE. Other justices include H.E. Justice Ali Al Madhani, H.E. Justice Shamlan Al Sawalehi, Justice Sir Richard Field, Justice Sir Jeremy Cooke, Justice Judith Prakash, Justice Roger Giles, Justice Robert French, and Justice Wayne Martin.

Frequently asked questions