DIFC Courts: Structure and Jurisdiction

DIFC or Dubai International Financial Centre. It is not just a Free Zone, it is a special Free Zone indeed. It was founded in 2004 with the concept tto provide a platform to UAE, GCC and the rest of the world where the world’s best businesses could interact. DIFC has its own legal system therefore the Lawyers and Legal Consultants for DIFC are other than regular Lawyers and Legal Consultants. DIFC Courts are also separate from other regular Dubai Courts. It is one of the best financial and business platforms in the world. It has its own law. It is a free zone therefore it offers tax relaxations to its users. More than 2000 companies are registered here while thousands of employees are also working. DIFC has its complete and independent law. Dubai and UAE’s best financial companies and financial service providers are operating here. DIFC is a combination of innovation, results, production, services, quality, future approach and success. Retailers to Service Providers, all are part of DIFC. There is no doubt that DIFC is one of the best business hubs in Dubai, UAE, GCC and the world. Dubai International Financial Centre (DIFC) Courts regulate the business laws in Dubai. DIFC Courts play an integral role in the economic growth of the UAE. It has an English-language judicial system within the jurisdiction.

The DIFC Courts are different from Dubai Civil Law Courts. DIFC Courts have made a legal system that attracts the international businesses, ensuring global legal standards. In recent years, DIFC Courts have outgrown their geographic boundaries, providing legal support in free zones to investors and business owners.

The DIFC Courts were introduced in 2004 by Dubai Law No.12 of 2004. It was then reinforced by Dubai Law No. 16 of 2011. In the earlier days of DIFC Courts, cases related to DIFC were resolved. These cases were of civil and commercial nature. However, Dubai Law No. 16 has permitted to resolution of disputes even if they are not related to the DIFC entities. The parties should agree in writing that they will resolve business disputes according to the Dubai Courts’ jurisdiction. The location of those businesses does not matter, whether they are operating in Dubai or anywhere else in the world.

The cornerstone in the development of DIFC Courts is the establishment of the DIFC-LCIA Arbitration Centre and Protocol of Enforcement that is signed between Dubai Courts and DIFC Courts. So, both entities are facilitated and mutually get recognition of judgments, to enforce awards and decisions to strengthen economic community.

The DIFC Courts are divided into several courts, as follows:

1. Court of First Instance (CFI)

The Court of First Instance resolves commercial and civil disputes. The judges in this court understand the complex matters that may happen in a business world. Therefore, individuals would prefer CFI for the business disputes.

1. Court of Appeal

The DIFC Court of Appeal hears petitions that come down from the CFI. The qualified and experienced panel of judges review the decision of the CFI, ensuring justice for everyone. Court of appeal is the highest courts in DIFC courts.

1. Small Claims Tribunal (SCT)

The Small Claims Tribunal (SCT) resolve disputes that are less than AED 500,000. The legal framework of SCTs is famous with the small and medium enterprises (SMEs), where companies are at an early stage of doing businesses. They need quick resolution to their cases.

Many expats are running small tech businesses in free zones, whereas multinational companies are investing in the infrastructure and construction sector of the UAE. A dedicated division is established by the DIFC Courts for technology and construction. However, the inception of this division helped IT, telecommunications, engineering projects, and construction projects by offering them technical and legal expertise in the respective domains.

The Arbitration Centre offers legal support for arbitration proceedings, and arbitral awards and assists in gathering evidence.

Previously, DIFC was used to resolve matters related to the entity only. With time changes were made to the UAE business laws, making them flexible for the investors. DIFC Courts can now resolve civil or commercial disputes outside the DIFC if only the parties have agreed in writing. The law supports contract disputes, employment matters, banking and finance cases, real estate and construction issues, intellectual property disputes, disagreements with shareholders, and negligence in tort cases.

The introduction of DIFC Courts has made businesses easy because they provide legal support to businesses in Dubai or even internationally, lets explore it further:

The DIFC Courts have English common law, providing relief to the international investors, encouraging foreign investments. The legal framework of DIFC ensures predictability, consistency and certainty in judgements.

English is the second language in the UAE. The court proceedings and hearings take place in English to ease the legal process for the foreign businessmen.

The international judiciary is chosen to ensure foreign expats have a better understanding of business disputes and they get fair decisions based on the legal expertise of the panel from the UK, Singapore, Canada, and Australia.

The businesses can make contract clauses with DIFC Courts, even if they are operating outside the DIFC zone. With the intervention of Small Claims Tribunal, accessibility to legal solutions to SMEs is easier and cost-effective in the UAE.

Dubai’s recognition protocols the UAE’s accession to protocols and the UAE’s accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, DIFC Courts’ judgments are enforceable both locally and internationally.

When it comes to court technology, DIFC is considered to be the first where digital case management tools were introduced. These courts are ‘paperless’ and provide efficiency in dispute resolution.

The DIFC Courts are resolving cross-border disputes in terms of international financial transactions, cross-border mergers and acquisitions, global intellectual property conflicts, and international shipping trade. Initiatives of DIFC The DIFC wants to stay at the forefront, ensuring exceptional legal services. Therefore, it has made a few strategic partnerships:

It was imperative to do a partnership with Digital Economy Court (DEC) because everything in the UAE is being digitalized and going paperless. Disputes related to blockchain, fintech and e-commerce are resolved with the expertise of DEC.

Several Memoranda of Understanding (MOUs) have been signed with courts in China, UK, Singapore and the USA. It allows entities to gain insights of courts in different parts of the world and enhances the global reach of the DIFC Courts.

The DIFC Courts also entertain individuals who cannot afford legal representation. They are provided with free legal services under DIFC Courts’ Pro Bono Program,

The DIFC Courts are playing a significant role in the business sector of the UAE, especially helping the country to become the largest economic leader. With efficient legal system of the UAE, dispute resolutions from DIFC Courts are essential for the economic development.