Many U.K. based investors attracted by the Gulf’s vibrant, growth-oriented economies are understandably nervous about the region’s legal frameworks. Dubai recognised business confidence as a key component in creating its vision for its future diversified economy. One of its solutions to the issue of business confidence was to create the DIFC Courts in 2004.
What are the DIFC Courts?
The DIFC Courts are an independent common law judiciary based in the Dubai International Financial Centre (DIFC). Its courts have jurisdiction over civil and commercial disputes. Originally, the DIFC Courts were limited to the DIFC zone’s geographical boundaries. However, in 2011 the DIFC Court’s remit was extended to any local or international cases. The DIFC Court’s philosophy emphasizes resolving commercial disputes where possible rather than relying exclusively on litigation and implementing a robust enforcement regime. The Courts make extensive use of mediators while its Small Claims Tribunal, the only one of its kind in the Gulf, is designed to provide swift and efficient justice for small matters. Experienced international jurists provide a deep bench for the DIFC Courts.
Security blanket for global business
The DIFC Courts set out a vision in early 2016 in which it aspired to be one of the world’s leading commercial courts by 2021. In achieving this ambitious target the DIFC Courts are looking to continue to focus on innovation, judicial excellence, efficient service and a strong enforcement regime. International and local business confidence in the DIFC Courts was evidenced by the strong growth it recorded in 2016, with caseloads increasing in both value and volume.
International Jurists play a major role in the evolution of the DIFC Courts
For international investors and businesses, the DIFC Courts system holds three primary attractions:
- International standard senior commercial judicial figures on its bench with expertise spanning commercial litigation, maritime law, banking & finance, aerospace oil & gas and insurance sectors
- A robust enforcement regime evidenced by its track record in successfully overseeing compliance with its orders and in its ability top recover a larger proportion of legal costs
- Exclusion of local Dubai Courts from jurisdiction over its cases
The role international appointments are playing in nurturing UAE national judicial skills was illustrated by the May 2016 appointment of two former justices in charge of the Commercial Court in the High Court of London to key roles in the DIFC Courts. Justice Sir David Steel was named as the new Deputy Chief Justice while Justice Sir Jeremy Cooke was named to the bench. Justice Steel replaced Justice Sir John Chadwick himself an eminent U.K. jurist.
What appears to be the general advice given to U.K. investors?
If you are doing business in the Gulf, try where possible to nominate the DIFC Courts as your local jurisdiction. Ensure your contracts, Heads of Agreement, Licenses, MOUs and NDAs include reference to the DIFC Courts’ arbitration services.
What does all this mean, then?
The Gulf offers access to new growth opportunities including its increasingly attractive transnational trading hub based on the region’s geographical position, sea and air transport links and proximity to markets (two-thirds of the world’s population are within an eight-hour flight of Dubai). A critical factor in supporting trade and investment is a fair and equitable legal system. Since its inception, the DIFC Courts have shown themselves as capable of driving enforcement and delivering international standard judicial outcomes while continuing to evolve the service delivery model to promote efficiency.