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Dubai International Financial Center’s Courts Report


Introduction

The role of any judicial system cannot be neglected or poorly understood. A court is a place where people can find the answers and solutions to their dispute considering the current law and rules that should be followed. Every country has several types of courts and a powerful judicial system. The current paper aims at discussing the peculiarities, advantages, and drawbacks of the DIFC Courts. In the UAE, the DIFC Courts are one of the most popular and effective English-language common law systems within the frames of which a number of international or local, commercial or civil disputes can be solved (“DIFC Courts: Frequently Asked Questions” par.1). Over the last few years, the DIFC Courts’ jurisdiction has been expanded considerably. It is necessary to analyze this kind of expansion to define its impact on the UAE Business and other spheres of life. To identify the worth of the expansion of the DIFC Courts’ jurisdiction, the essence of the chosen court system, its peculiar features, and the positive and negative aspects of the process have to be considered and evaluated in accordance with the conditions under which the UAE courts and citizens complete their duties and make use of their rights and opportunities.

Essence of DIFC Courts

The DIFC Courts represent an independent law system that is based in Dubai. DIFC stands for the Dubai International Financial Center (Ercanbrack 274); it means that the court system under consideration is based in Dubai, one of the famous and the most expensive among the seven emirates. During the last decades, a number of international relationships have been developed by Dubai and the other United Arab Emirates. As a powerful regional port for trade and services, Dubai has to participate in a number of financial operations regularly. It was hard to regulate these types of relations because each country and region had their own rules and traditions that had to be followed.

To overcome the challenges and set a single system of rules, it was decided to create a financial free zone where a particular financial authority could regulate the activities (Ercanbrack 274). In 2004, Law No. 12 established the effectiveness of the DIFC Courts. Under the ruler of Dubai, His Highness Sheikh Maktoum bin Rashid Maktoum, the Law No. 10 was also established to identify the powers, procedures, and all functions of the DIFC Courts (“DIFC Courts: About the Courts” par. 1). Due to those two laws, it turned out to be possible to create a system with properly developed international standards of legal procedures and ensure all parties that the DIFC Courts could promote flexible and effective solutions for their financial, economic, employment, and other types of disputes.

Within a short period of time, it became possible to solve various civil and commercial misunderstandings and disputes. The presence of international financial transactions facilitated international trade and promoted the distribution of services. The DIFC Courts were the main body in the UAE that controlled the way and the quality of how all operations were carried out. In spite of the independence that is inherent to the DIFC Courts, the system helps to find the required consensus and consider the opinions of all parties.

DIFC Courts Composition

The peculiar feature of the DIFC Courts is the possibility to have the required portion of power and make orders of different nature: the questions of damages and compensations, the cases of restitution or punishment, etc. (“DIFC Courts: About the Courts” par. 7) The DIFC Courts consist of two main types: a Court of A First Instance and a Court of Appeal. Each type has its own functions and provides people/organizations with different opportunities. The peculiar feature of the Court of First Instance is that it has only one judge with a possibility to deal with various civil and commercial cases of the DIFC and its establishments or solve the questions aroused from the fulfilled contracts (“DIFC Courts: Courts’ Structure” par. 1).

The Court of Appeal consists of three judges, who consider the appeals against the judgments made by the Court of First Instance (“DIFC Courts: Courts’ Structure” par. 2). This court helps to interpret the current DIFC laws and pay attention to the requests. If a number of facts and evidence are found, the appeal may have power. After the case is solved at the Court of Appeal, it cannot be sent further. The solution made is final and cannot be changed. In other words, a person or an organization has two chances only to defend their position and find the legal support. There is also a Small Claims Tribunal that deals with the claims of the DIFC members that do not exceed $(AE) 200,000. The trials are usually organized in an efficient manner to help people solve their minor trade or other problems.

The Courts follow the law that is chosen to govern the contract that causes a dispute. If it is not possible to apply the DIFC’s law system, the participants of the case can rely on the law offered by the United Kingdom. Among several restrictions of the DIFC Courts, it is necessary to admit the fact that the Courts do not solve the cases of criminal nature. Only commercial and civil laws are considered by the representatives of the DIFC Courts. Another important point is that all trials, documents, and conversations are in the English language. In spite of the fact that all trials and cases usually take place in Dubai, the Arabic language is not appropriate.

Expansion of the Jurisdiction: General Facts

For a long period of time, only the DIFC members were able to use the DIFC Courts and solve their disputes and misunderstandings. “DIFC courts have exclusive jurisdiction over disputes arising in the DIFC or in connection with companies registered in the DIFC” (Ercanbrack 274). The jurisdiction was over all civil and commercial cases that took place in the DIFC. Under the Law No. 12 of 2004, the DIFC Courts were available to the DIFC only. However, in 2011, a considerable expansion of jurisdiction took place. HH Sheikh Maktoum made a new decision and allowed any party to resolve their commercial debates with the help of the DIFC Courts (Bourke par. 1). Law No. 12 of 2004 was expanded by Law No. 16. Several provisions were amended to the previous law that helped to expand the jurisdiction of the DIFC Courts. The possibility for any party to use the free zone’s judiciary turns out to be a good chance for many people and companies to solve their problems and improve their business relations. However, it is necessary to admit that, in addition to a number of positive aspects of the expansion, there are also several drawbacks that have to be discussed.

Expansion of the Jurisdiction: Benefits

One of the most evident and effective aspects of the expansion of jurisdiction of the DIFC Courts is the possibility to promote more new choices: now all Arab parties are able to have their cases heard using civil or common law (it depends on the nature of a case) and introduce their points of view using the legal support (Hamade par.4). Besides, it is stated that two languages can be used during the trials: English and Arabic. The parties are free to make a choice and decide what language is preferable for their particular case. As soon as the decision is made, all documents and procedures are organized using one particular language.

There are many supporters, who find the idea of the expansion of the jurisdiction powerful indeed. It is admitted that people become more accessible to the communities that are chosen for cooperation and service promotion (Jones par.8). The main positive aspect of the change is the accessibility for all people, who want to choose the DIFC Court as the best means to resolve various issues. The business of Dubai can be improved considerably due to the possibility to discuss the basis of business relations under the same conditions. There is no need to evaluate a variety of options and solutions that can be made. All business/trade/economic relations (in case they should be resolved with the help of the court) should correspond to the standards set by the DIFC Courts.

Many lawyers welcome the offered expansion as it is a good chance to introduce the legal system of the UAE as a powerful and definite commercial body with an ability to gain control over all activities that may take place in the UAE. Of course, these possibilities are not identified directly. Still, it may happen that lawyers just want to facilitate their work and help the UAE to become a powerful economic and financial body. If in 2004, the law limited the authority allowing only the companies registered in the DIFC to the courts, in 2011, a chance to have access to the courts of the DIFC can be used. If the company or a person does not have the final judgment issued by another court, there is a possibility to address the DIFC Courts and find the answer. More new choices and options are available to all parties interested.

It is also necessary to admit that the legal system of the UAE is probably the most mixed among the existing systems around the whole world. Its dual legal system is one of the most evident threats to the country and the development of strong business relations. With the help of the expansion, it turns out to be possible to make the DIFC Courts international and available to all commercial parties (Hamade par.9). In fact, it is very difficult to make all parties to agree to anything because each party may have its own truth and explanations. With the help of the DIFC Courts and their jurisdiction, the number of cases with optional solutions may be increased considerably. That is why the expansion of the jurisdiction of the DIFC Courts can be interesting as to the legal communities that have to analyze cases and offer the most appropriate solutions and to the business communities that want their cases to be solved in the way that is the most beneficial for them.

Expansion of the Jurisdiction: Drawbacks

Regarding the fact that different communities are satisfied with the possibility to use the DIFC Courts and solve their questions, problems, and misunderstandings, it is hard to believe that there are some disadvantages that may spoil the effects of the expansion. However, there are the negative aspects of the expansion of the jurisdiction of the DIFC Courts, and some of them will be discussed in the paper.

In spite of the fact that the DIFC Courts provide people with better opportunities and allow different groups to use the current law, it is not still clear if the expansion of the jurisdiction is effective regarding all aspects of trials (Hamade par. 13). For example, in the articles of a new law, it is hard to find clear information on how arbitration cases can be discussed in the DIFC. The point is that the UAE arbitration courts can lose the necessary portion of incomes. The DIFC Courts set low fees and costs on the services offered. As a result, not many people are eager to address arbitration. On the one hand, it is a benefit for the DIFC Courts, but, at the same time, it is an evident disadvantage for other types of courts. There is still one possible way to improve the situation and make all courts benefit from the expansion. The DIFC Courts should talk to the local courts and its practitioners to promote the same level of judges’ awareness and competency of lawyers and legislators in regards to the common legal traditions.

Another possible disadvantage of the expansion is the necessity to create a powerful system according to which all parties and participants can consider their own conditions and rights in regards to a common law. It may happen that some organizations or people in the UAE may have some grants or develop their business on special terms. All these aspects should be considered by the judges and used in trials accordingly. It does not create a significant problem. Still, it is a challenge that has to be analyzed and solved in a short period of time.

Finally, the presence of the DIFC Courts and its accessibility to all parties decrease the chances for private organizations to develop their services considerably. The UAE is the country of contrast. It differs from a number of European countries where people are eager to use any chances to save their money. The UAE people do not pay much attention to the question of financial costs. They want to be sure in the quality of the services they get. And even this perspective creates several obstacles for the DIFC Courts’ competitors. The DIFC Courts offers the services on the international level. Not many courts can offer the same quality. As a result, they suffer from the standards set by the DIFC Courts. Besides, even the participants of the DIFC Courts may suffer from these standards because now they do not have a chance to decrease the quality.

Importance of DIFC Courts

The DIFC Courts play an important role in the UAE. With the help of the offered expansion, the DIFC Courts gain more powers to promote their jurisdiction over various civil and commercial cases. People are usually in need of a powerful system that can make all parties equal in regards to the law. The DIFC is the opportunity that is now available to all people. It is also a chance to use the language (English or Arabic). However, the observations prove that many companies prefer cases being solved in English, as it is a common international language available to the majority of people.

Conclusion

In general, the evaluation of benefits and drawbacks of the expansion of the jurisdiction of the DIFC Courts helps to realize that the UAE becomes more powerful in terms of the possibility to develop international relations, promote trade services, and improve other spheres of life. There are many parties that want to solve their problems on a high level. The DIFC Courts has already introduced impressive opportunities in 2004. In 2011, their decision to expand the jurisdiction turned out to be a powerful step to improve the already achieved conditions and help many people not involved in the DIFC find appropriate solutions. In fact, it is hard to say for sure about the impact of the expansion because not much time has passed. The current achievements do not have many contradictions or disadvantages. Still, the time is the best way to check the correctness of the decisions and the effectiveness of the work done so far. Business people are interested in the opportunities offered by the DIFC Courts. The expansion of the jurisdiction is a crucial stage in the history of the DIFC Courts, as well as in the history of the UAE.

Works Cited

Bourke, Patrick. “Dubai Expands the Jurisdiction of the Dubai International Financial Centre (DIFC) Court.” Norton Rose Fulbright (2011). Web.

DIFC Courts: About the Courts 2014. Web.

DIFC Courts: Courts’ Structure 2014. Web.

DIFC Courts: Frequently Asked Questions 2014. Web.

Ercanbrack, Jonathan. The Transformation of Islamic Law in Global Financial Markets. Cambridge, UK: Cambridge University Press, 2015. Print.

Hamade, Diana. “Expansion of DIFC Courts Introduces a New Set of Choices.” The National (2011). Web.

Jones, Rory. “DIFC Courts’ Jurisdiction Widens.” The National (2011). Web.

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IvyPanda. (2020, July 4). Dubai International Financial Center's Courts. Retrieved from https://ivypanda.com/essays/dubai-international-financial-centers-courts/

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"Dubai International Financial Center's Courts." IvyPanda, 4 July 2020, ivypanda.com/essays/dubai-international-financial-centers-courts/.

1. IvyPanda. "Dubai International Financial Center's Courts." July 4, 2020. https://ivypanda.com/essays/dubai-international-financial-centers-courts/.


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IvyPanda. "Dubai International Financial Center's Courts." July 4, 2020. https://ivypanda.com/essays/dubai-international-financial-centers-courts/.

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IvyPanda. 2020. "Dubai International Financial Center's Courts." July 4, 2020. https://ivypanda.com/essays/dubai-international-financial-centers-courts/.

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IvyPanda. (2020) 'Dubai International Financial Center's Courts'. 4 July.

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