DIFC Courts double down on arbitration: key takeaways from two recent judgments

The DIFC Courts have recently made public two judgments that reinforce their pro-arbitration stance and clarify key principles under the DIFC Arbitration Law. In Oswin v Otila and another, the Court confirmed its supervisory jurisdiction over DIFC-seated arbitrations and continued interim measures to preserve the status quo pending tribunal appointment. In Obert and another v Ondray, the Court granted recognition and enforcement of a final award, rejecting jurisdictional and public policy challenges and reaffirming that annulment of awards will only occur in exceptional circumstances. Together, these decisions confirm the robustness of the DIFC framework in supporting arbitration agreements and awards.

DIFC Court confirms supervisory powers and continues injunction in support of arbitration

In Oswin v Otila and another [2025] ARB 032/2025, the Dubai International Financial Centre ("DIFC") Court of First Instance ("CFI") continued an injunction it had granted earlier this year pursuant to the claimant's urgent application for interim measures in support of a DIFC‑seated arbitration. The injunction was granted to maintain the status quo until the arbitral tribunal was appointed, underscoring the DIFC Court's supervisory powers over DIFC-seated arbitrations.

The dispute stemmed from a joint venture agreement ("JVA") between Oswin and Otila, who held 49% and 51% of the shares respectively in a company operating a medical and hazardous waste facility. A deadlock had developed over key decisions concerning the management and operation of the plant, prompting Oswin to seek interim relief to prevent unauthorised unilateral acts by Otila or its nominee (the second defendant, Ondray) pending the arbitration.

Upon the return date, Ondray applied to discharge the injunction for want of jurisdiction, contending that the Courts of Abu Dhabi had exclusive jurisdiction under clause 21.4 of the JVA. Ondray argued that, while clauses 21.2 and 21.3 provided for DIFC-seated arbitration under the DIFC-LCIA Rules, interim measures fell within the jurisdiction of Abu Dhabi Courts.

The CFI rejected Ondray's arguments, holding that it had supervisory jurisdiction because the parties had agreed to a DIFC seat. Clause 21.4, which refers to the exclusive jurisdiction of Abu Dhabi Courts, was expressly made subject to clauses 21.2 and 21.3, which provide for DIFC-seated arbitration. The CFI emphasised that the choice of seat carries with it the powers of the DIFC Court to grant interim measures under DIFC law, pursuant to Articles 14 and 15 of DIFC Law No. 2 of 2025 and Article 24 of the DIFC Arbitration Law. 

The CFI also rejected Ondray’s further arguments that the arbitration agreement was invalid under UAE Federal Law or contrary to public policy, holding that clause 21 of the JVA was clear and enforceable. Therefore, clause 21.4 would only apply to disputes which were not arbitrable under clauses 21.2 and 21.3.

DIFC Court enforces arbitral award and reiterates minimal curial intervention

In Obert and another v Ondray [2025] ARB 014/2025, the DIFC CFI granted an arbitration claim to recognise and enforce a final award, highlighting the DIFC Courts’ pro-arbitration approach and commitment to minimal court intervention.

The dispute arose from a consultancy agreement ("CA") for the development of a security token offering intended to fund two major projects. The CA contained an arbitration clause providing for DIFC-seated arbitration under the DIFC-LCIA Rules. The parties later executed a termination and settlement agreement ("TSA"), under which the defendant agreed to pay EUR 50,000 to each claimant. When the defendant failed to pay, the claimants commenced arbitration, resulting in a final award ordering payment, which they then sought to have recognised and enforced.

The defendant opposed recognition and sought to set aside the award, arguing that the arbitrator exceeded jurisdiction by deciding the claims under the CA when the claimants’ demands were based on the TSA, which did not contain an arbitration agreement. The defendant also alleged, among other things, that the award was internally inconsistent, contrary to public policy, and procedurally unfair, citing Articles 41(2)(a)(i)-(iv) and (b)(iii) of the DIFC Arbitration Law, which set out limited circumstances for annulment such as invalidity of the arbitration agreement, lack of proper notice or opportunity to present a case, excess of jurisdiction, procedural irregularity, or conflict with UAE public policy.

The CFI dismissed these objections, stressing that annulment of arbitral awards is exceptional. It held that the arbitrator had jurisdiction: the arbitration clause in the CA was invoked from the outset and confirmed in the deed of arbitration. Applying Article 23(1) of the DIFC Arbitration Law, the CFI emphasised the principle of separability, finding that termination of the CA did not extinguish the arbitration clause, which survived independently unless expressly excluded. Allegations of procedural unfairness were rejected, and the CFI found that the award was not contrary to public policy, reiterating that annulment under Article 41 is confined to violations of the UAE’s most basic principles of law and morality – mere disagreement with the tribunal’s reasoning cannot suffice.

Comments

Both of these cases demonstrate the DIFC Courts' commitment to support arbitration and ought to give comfort to those selecting the DIFC as the seat of their arbitrations.  Oswin v Otila and another highlights the importance of careful drafting of dispute resolution clauses and provides reassurance that the DIFC Courts will exercise their statutory powers to support arbitrations seated in the DIFC, ensuring procedural integrity and the effectiveness of interim relief. Similarly, Obert and another v Ondray reinforces the strength of the DIFC framework in upholding arbitration agreements and awards, making clear that the DIFC Courts will intervene only in the rarest cases.