Further to yesterday's talk through the grapevine, today we can announce that the new law is reality.
The very foundation of the independent Courts of the Dubai International Financial Centre (DIFC) has been re-defined by largely widening it jurisdiction. The new law amending existing Dubai Law No. 12 of 2004 has been signed by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The DIFC Courts may now hear every civil or commercial law suit of businesses from the GCC and the wider Middle Eastern region, provided that all parties to the dispute have opted clearly and concisely in writing to refer their dispute to the DIFC Courts. It does not matter whether such agreement is reached before or after the dispute has arisen.
This new gateway into the jurisdiction of the DIFC Courts means that from now on a specific link to the DIFC such as that either party is established in the DIFC or that the contract was wholly or partly performed within the DIFC is no longer necessarily required. The move marks the culmination point of an evolutionary change elevating the status of the DIFC Courts from a special Court for the DIFC and its establishments to a new standard litigation forum for all international businesses in the region.
The advantages for the Middle Eastern and International business community are overwhelming.
Many if not most commercial contracts in the region are concluded in English. English is furthermore the pre-dominant language used in business correspondences and communications. But, all court systems in the region function exclusively on the basis of the Arabic language, except for the DIFC Courts. Many regional business leaders, especially in the cosmopolitan metropolis Dubai do not speak or understand Arabic. For them the possibility of using English speaking courts in the DIFC means easier access to justice and more transparency in the judicial process.
Documents, agreements and correspondences will not have to be translated into Arabic, with all the dangers and intricacies of legal meanings getting lost in translation as well as added costs and time in the process. Proceedings and court documents will be original in English and as such instantly understandable and transparent for the non-Arabic speaking seeker of justice. The in practice so common but difficult system of dual legal representation through international legal consultant and local advocate will not be necessary, reducing costs further.
Another important aspect that may even lead to Arabic speaking business men to consider the DIFC Courts as a preferred choice of judicial forum, is the fact that under the DIFC Court Rules the winning party can claim back its reasonable legal costs, including a reasonable part of its lawyers fees. In any other court in the UAE lawyers’ fees cannot be recovered as a matter of principle.
No doubt the move will enhance the motivation of international businesses to invest into the Middle East, knowing that in case of dispute they can rely on the DIFC Courts as a world-class and English speaking judicial forum.
We strongly advise business leaders and entrepreneurs to look into their contracts and agreements with a view of maximizing their advantages from this new opportunity.
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