Dubai Introduces New Judicial Authority to Resolve Conflicts Between DIFC and Local Courts

Dubai has introduced a new judicial authority to address jurisdictional conflicts between DIFC Courts and local judicial bodies, with the goal of streamlining legal proceedings. Expected to boost efficiency and clarity, the Authority’s conclusive decisions promote legal certainty, facilitating the resolution of jurisdictional disputes in the emirate.

By Giulia Interesse

On April 8, 2024, His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE’s current Ruler, Vice-President and Prime Minister, issued Decree No. (29) of 2024 (hereinafter, “Decree No. 29”) on the Judicial Authority for Resolving Jurisdictional Conflicts between DIFC Courts and Judicial Authorities in the Emirate of Dubai (hereinafter, the “Authority”).

Decree No. 29 aims to simplify and resolve conflicts of jurisdiction between different courts. In particular, it assigns the Authority the responsibility of identifying the appropriate court for disputes, outlining enforceable judgments in case of conflicts, and carrying out tasks delegated by the Ruler of Dubai or the Chairman of the Dubai Judicial Council.

In this article, we explore the implications and significance of Decree No. 29 in addressing conflicts of jurisdiction within the legal framework of Dubai.

The DIFC Courts

The Dubai International Financial Centre (DIFC) operates as a common law jurisdiction within the UAE, established by Dubai Law No.9 of 2004. According to the Judicial Authority Law 12 of 2004 (as amended), the DIFC Courts holds exclusive jurisdiction over various matters, including:

• Civil or commercial claims where the DIFC is a party;
• Civil or commercial claims arising from contracts executed or performed within the DIFC;
• Civil or commercial claims stemming from transactions carried out within the DIFC and related to its activities;
• Appeals against decisions made by the DIFC; and
• Any claims falling under the jurisdiction of the Courts in accordance with DIFC Laws and Regulations.

Additionally, the DIFC Courts can hear both local and international cases if explicitly agreed upon by the involved parties in a contract or if the contract involves a party established within the DIFC.

Parties may prefer the DIFC Courts over the Dubai Courts when seeking enforcement of arbitral awards and foreign judgments due to several factors. Despite the UAE’s commitment to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, enforcing foreign arbitral awards through the Dubai Courts has reportedly faced challenges. These challenges include judicial interventionism, where the courts may scrutinize the merits of the award or judgment for enforcement.

Additionally, proceedings in the Dubai Courts typically involve an automatic right of appeal with limited adverse consequences, potentially leading to costly and prolonged proceedings.

Moreover, proceedings in the Dubai Courts are conducted in Arabic, which might not be the preferred language for the parties or the language of the relevant contract.

Key takeaways from Decree No. 29 on the new Authority

Decree No. 29 introduces a significant restructuring of the judicial landscape in Dubai, impacting all judicial entities within the emirate, including both traditional courts like the Court of Cassation, Court of Appeal, and Court of First Instance, as well as the specialized DIFC Courts. One of the central changes brought about by this decree is the transformation of the existing Judicial Tribunal for Dubai Courts and DIFC Courts into the new Authority.

This newly established Authority will be led by the President of the Court of Cessation at Dubai Courts, supported by the Deputy Chief Justice of DIFC Courts serving as Deputy Chairman, alongside other key members including the Secretary General of the Dubai Judicial Council, Presidents of the Court of Appeal and the Court of First Instance at Dubai Courts, and two judges from DIFC Courts appointed by the Chief Justice.

The Authority’s mandate is robust, encompassing crucial tasks such as:

• Determining the appropriate court for disputes;
• Specifying enforceable judgments in instances of conflicts; and
• Executing tasks delegated by the highest legal authorities in Dubai.

Notably, the decisions rendered by this Authority are considered final and conclusive, with no avenue for appeal.

Moreover, the legal precedents established by the Judicial Authority under Decree No. 29 carry significant weight, binding all courts, including the specialized DIFC Courts. Any discrepancies or conflicting rulings are subject to resolution through established legal channels, ensuring consistency and coherence in the judicial process.

In terms of implementation, the Chairman of the Dubai Judicial Council will oversee the necessary administrative steps to enact Decree No. 29, effectively replacing the previous legislation outlined in Decree No. 19 of 2016 concerning the Judicial Tribunal for the Dubai Courts and DIFC Courts.

Decree No. 29, published in the Official Gazette the day after its issuance, supersedes any conflicting legislation and took effect immediately thereafter.

Expected impact

With its comprehensive provisions applicable to all judicial bodies in Dubai, including the DIFC Courts, Decree No. 29 sets the stage for a more streamlined and efficient resolution of jurisdictional conflicts.

The expected impact of this initiative is far-reaching. The Authority’s role in determining appropriate courts for disputes, specifying enforceable judgments, and executing assigned duties is crucial for promoting legal clarity and consistency. Moreover, its decisions, deemed final and binding, will foster a conducive environment for businesses and investors.

All things considered, the establishment of the judiciary is expected to have a positive impact in terms of redressing legal ambiguity, promoting judicial independence, and facilitating the resolution of jurisdictional conflicts.

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