Tuesday, November 1, 2011

Companies can take dispute cases to Dubai International Financial Centre ( DIFC) courts

Dubai: Companies will now be able to choose to have dispute cases heard in English common law courts.
A new law will allow businesses from Dubai and across the Gulf to use the courts of the Dubai International Financial Centre (DIFC), meaning that they can avoid the backlog that has plagued Dubai's traditional civil courts.
The move, which has been welcomed by both lawyers and local businesses, is likely to boost the workload at the DIFC, lawyers say, as companies are drawn to the opportunity to be awarded costs — an option not available in civil cases.
Major impact
But experts also point out that it will be some time before the law, signed by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai yesterday, has a major impact on the DIFC courts.
The option to choose the jurisdiction of the DIFC will have to be written in new contracts, except in cases where the parties in existing disputes agree to have the case heard outside of the civil courts.
Nonetheless, lawyers were upbeat about the news last night.
Positive thing
"It's a positive thing and will be viewed positively by quite a lot of the international companies doing business in this region," Alec Emmerson, a consultant at Clyde and Company, told Gulf News.
Justice Sir David Steel, Associate Judge of the DIFC, said that the importance of the law was to give potential litigants the option of choosing civil or common law courts.
"It's a question of whether the initial participants in the dispute are enthusiastic about going to the Dubai courts or whether they would prefer to go the common law court," he said.
Steel added that while the ruling may eventually see an increase in cases before the DIFC, he did not anticipate a need for more resources.
"We will play it by ear," he said.