DIFC Courts' jurisdiction widens

Any company can take a dispute to the Dubai International Financial Centre under a new decree.

The Dubai Government yesterday signed a decree to allow any company to take a dispute to the Dubai International Financial Centre Courts. Duncan Chard for the National
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The Dubai Government yesterday overhauled the commercial legal system in the emirate by signing a decree to allow any company to take a dispute to the Dubai International Financial Centre (DIFC) Courts.

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Previously, only companies based in the DIFC or those that had an issue related to the free zone could use the English-language courts, which are also based on English common law.

But now, before any commercial contract is signed, parties can agree to use the DIFC Courts in the event of a dispute. If a contract is already in dispute, it can be resolved in the DIFC Courts only if both parties agree to have it heard there.

Lawyers welcomed the new system as a way of increasing the attractiveness of the UAE as a commercial hub in the region.

"It is good for Dubai. It's very positive," said Richard Briggs, an executive partner at Hadef & Partners, a law firm. "It will change the nature of litigation in Dubai as more claims work their way through the DIFC."

Businesses both in Dubai and internationally can choose between the emirate's Arabic-language Dubai Courts or the DIFC Courts to resolve disputes.

The DIFC Courts said the regional business community had been calling for changes to its remit to provide more choice.

"The expansion of the DIFC Courts' jurisdiction makes us even more accessible to the communities in which we operate and whom we serve," said Michael Hwang, the chief justice of the DIFC Courts.

"The importance of this change is that our courts are now available to all who wish to choose us as their preferred forum for resolution of their disputes, and now widens the choice of forum for businesses in Dubai and elsewhere."

Founded in 2004, the DIFC Courts make up an independent court system designed to uphold the DIFC laws and regulations.

It is comprised of international judges with experience in commercial disputes and given the objective of dealing with cases justly and swiftly.

Justice David Steel said he did not expect a flood of new cases to be brought to the DIFC Courts, but said over time the workload would increase and increasing courts and staff would be considered.

"There will be an increase in work in the international field. We will have to take it steadily," he said.

Alec Emmerson, a lawyer at Clyde and Co, said the expanded powers of the DIFC Courts would save money for disputing partiesbecause contracts written in English would not have to be translated into Arabic for the Dubai Courts.

"It will be a big advantage for international companies, because their contracts are usually in English," Mr Emmerson said. "It will save both costs and effort in documents being translated."

He said a party confident of its case might want it heard in the DIFC Courts because in most instances losers must pay the other side's legal costs.