Dubai issues new DIFC Courts Law – the 10 key takeaways you should know

The New DIFC Courts Law introduces new provisions, including regarding the jurisdiction of the DIFC Courts, contempt of court and the Court of Appeal.  The changes set out in the New DIFC Courts Law are wide-ranging.  We set out below the top 10 key takeaways from the New DIFC Courts Law.

1. The New DIFC Courts Law is a Dubai Law

The New DIFC Courts Law supersedes DIFC Law No. (10) of 2004 (the "Old DIFC Courts Law") and Dubai Law No. (12) of 2004 (the "Judicial Authority Law"). Whereas previously the DIFC Court's jurisdiction was addressed in both DIFC and onshore UAE law, it is now covered comprehensively in a single onshore statute. Accordingly, the DIFC Courts are now an entity created and governed entirely by onshore UAE law, as opposed to DIFC Law.

2. Jurisdiction of the DIFC Courts

The jurisdictional gateways, previously found under Article 5 of the Judicial Authority Law, now expressly include employment claims and trust instruments established or registered in the DIFC (Article 14(2) – (4)). Importantly, the gateways also include claims and applications over which the DIFC Courts have jurisdiction under DIFC laws and regulations, the legislation in force in Dubai, as well as any international treaty or convention to which the UAE has acceded  or is party, providing clarity on the 2021 decision of the Court of Appeal in Lahela v Lameez (Article 14(A)(7)).

3. The Court of Appeal

The New DIFC Courts Law expressly provides that interpretation of any DIFC Laws and DIFC Regulations upon application submitted to the Chief Justice shall have the same authority as the interpreted legislation or regulation (Article 17(C)(3)).

4. Contempt of court

The New DIFC Courts Law expressly sets out the circumstances in which a person may be found in contempt of court. Interestingly, this includes failing to comply with, or declining to act upon, a judgment, decision or order of the DIFC Courts (Article 35(5)). The scope of the contempt of court provision appears wide, in particular because it is not expressly restricted to actions that are wilful or deliberate.

5. Interim and Precautionary measures

Under the New DIFC Courts Law, the DIFC Court is expressly empowered to issue any interim orders it considers just or appropriate, including restitution, disgorgement, compensation and damages (Article 24(C)).  The DIFC Courts may make interim measures in relation to arbitral proceedings which are seated outside the DIFC, if the parties apply to seek such a measure from the DIFC (Article 15(4)).  The DIFC Court also has broad powers to make any other order necessary for the proper administration of justice.

6. Compulsory enforcement

Compulsory enforcement, whereby all UAE authorities must proceed with the enforcement (including by force if required) (Article 30(D)), shall only be permitted under an enforcement writ (Article 30(A)). Enforcement writs include DIFC Court decisions, arbitral awards and settlement agreements ratified by the DIFC Courts, signed settlement agreements approved by the Mediation Centre, documents certified in accordance with the DIFC Courts Law and any other documents which DIFC Law grants enforcement status (Articles 30(A) and 30(B)). Consequently, the new DIFC Courts Law has simplified the process for enforcing foreign arbitral awards and settlement agreements, and made it so that such documents can be subject to compulsory enforcement.

7. Duties and powers of the Chief Justice

While the duties and powers of the Chief Justice are broadly the same as under the Old DIFC Courts Law, the New DIFC Courts Law provides that the Chief Justice may propose draft laws and regulations relating to DIFC Courts' affairs and matter which fall within its jurisdiction, for approval by the President or for the issuing of directives (Article 10(B)(3)). The Chief Justice may also direct such draft laws and regulations for public consultation (Article 10(B)(5)).  Under the previous regime, such rights were limited to the Rules of Court.

8. Deputy Chief Justices and Directors

The New DIFC Courts Law contemplates the appointment of multiple Deputy Chief Justices and Directors, both of which shall be appointed pursuant to a decree issued by the Ruler of the Emirate of Dubai (with the Deputy Chief Justices being upon the recommendation of the President of the DIFC Courts) (Article 10(A)). Deputy Directors may be appointed by decision of the President of the DIFC Courts upon the recommendation of the Director. The duties of the Directors generally relate to the supervision of the administrative functions of the DIFC Courts (Article 11(B)).

9. Mediation Centre

The New DIFC Courts Law provides for the establishment of a new mediation centre (with its functions, framework and procedures to be determined by the President of the DIFC Court) (Article 11(B)). Importantly, signed settlement agreements that are approved by the Mediation Centre are subject to compulsory enforcement by the DIFC Courts as an enforcement writ (Article 30(B) and 31(B)(4)).

10. Location of hearings

Certain hearings may, by decision of the Chief Justice, now be held outside of the DIFC by any means or as stipulated in the Rules of the Courts (Article 4), granting parties additional flexibility.

Comment

The issuance of the New DIFC Courts Law provides certainty regarding the jurisdiction and the powers of the DIFC Courts.  Many of the provisions of the New DIFC Courts Law are welcomed, granting flexibility to proceedings and clarity in respect of the DIFC Courts and interim measures.  The broadening of circumstances in which a party may be found to be in contempt of court will give rise to questions; we wait to see how this will be implemented in practice.