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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
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Diego Carmona - Senior Associate - International Litigation Group / Litigation
Over a number of years, the potential for conflicts of jurisdiction between the DIFC Courts and the Dubai Courts outside of the DIFC have risen. This risk has been exacerbated by the expansive attitudes both Courts have to their jurisdictional reach. Almost inevitably, situations have arisen where parallel sets of proceedings have been introduced in both Courts where it would be contrary to the administration of good justice for both sets to continue.
This article considers the latest decisions of the Joint Judicial Committee (‘the Judicial Committee’), established by Dubai Decree 19 of 2016 on the Formation of the Judicial Committee for the Courts of Dubai and the Courts of the Dubai International Finance Centre (‘the Decree’), analysing the legal principles that have emerged since the Judicial Committee’s inception and the impact its decisions have had on the DIFC Courts’ status as a conduit jurisdiction for the enforcement of foreign judgments and arbitral awards seated outside its jurisdiction.
Article 2 of the Decree empowers the Judicial Committee to:
The Judicial Committee is comprised of four Dubai Court judges, including the chairman, who has the casting vote in the event of a tie and three DIFC Court judges. This constitution has on several occasions proven crucial in the Committee’s decision-making, where decisions have been issued with the judges split 4-3.
After its formation, the Judicial Committee began to hear applications where both the Dubai Courts and the DIFC Courts had the jurisdiction under their respective laws to hear matters involved in the same dispute. We covered the Judicial Committee’s decisions in our February 2017, April 2017 and August 2017 editions of Law Update.
Two years after the Decree was issued, we consider that general guidance can be derived from the judgments of Judicial Committee and bring welcome clarity as to the legal position when conflicts of jurisdiction between the Dubai Courts and DIFC Courts arise.
The enforcement of domestic arbitral awards in the DIFC has been a contentious subject but the Judicial Committee’s decisions have shed more light on their treatment in the Emirate of Dubai.
The Judicial Committee will allow a London seated arbitral award to be ratified and enforced through the DIFC Courts, as long as there are no concurrent proceedings in the Dubai Courts. In Judicial Committee Cassation 3 of 2016, the jurisdiction of the Judicial Committee (under Article 4 of the Decree) was not triggered because there were no concurrent proceedings.
Where there are concurrent proceedings in the enforcement of a foreign arbitral award, “pursuant to the general principles of law embodied in procedural laws” the Dubai Courts have jurisdiction. In Judicial Committee Cassation 1 of 2017, the DIFC Court judges issued a lengthy, dissenting and compelling obiter opinion that took issue with this approach, saying that conflicts of jurisdiction need to be resolved by using existing and specific laws and not “general principles”. Article 2 and Article 8(2)(7) of the Judicial Authority Law and Article 42 of the DIFC Arbitration Law confer exclusive jurisdiction to the DIFC Courts to enforce and ratify foreign arbitral awards irrespective of the State or jurisdiction where they are issued.
The Judicial Committee will allow a judgment of the Commercial Court in England to be ratified and enforced through the DIFC Courts, as long as there are no concurrent proceedings in the Dubai Courts (Judicial Committee Cassation No. 5 of 2016 and No. 5 of 2017). The jurisdiction of the Judicial Committee under Article 4 of the Decree was not triggered because there were no concurrent proceedings.
Where there are concurrent proceedings in the enforcement of a foreign judgment (such as the English High Court) the “Dubai Courts are the competent Courts to entertain this case because they have general jurisdiction embodied in the procedural laws” (Judicial Committee Cassation No. 4 of 2017).
The latest decisions of the Judicial Committee have confirmed some and developed many of principles discerned from earlier cases.
A clear pattern of reasoning is emerging from the judgments of the Judicial Committee, which allows legal practitioners in Dubai to assess the potential outcome of a jurisdiction challenge with a greater degree of certainty. This is a welcome development; it has likely contributed to increased activity in both courts and instils greater confidence in the legal system in the Emirate of Dubai.
From a legal practitioners’ perspective, it also opens up an array of possibilities and tactical issues to consider when deciding whether to continue to use the DIFC Courts as a conduit jurisdiction for the enforcement of foreign judgments and domestic and foreign arbitral awards. The conduit jurisdiction status of the DIFC Courts has undoubtedly been curtailed, but has not been extinguished completely.
Al Tamimi & Company’s DIFC Litigation team regularly advises on enforcement of foreign judgments and foreign arbitral awards. For further information please contact Rita Jaballah (email@example.com) or Diego Carmona (firstname.lastname@example.org).
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