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Is the jurisdiction of the DIFC Courts gaining ground?

The recent rulings of the Judicial Tribunal for the Dubai Courts and DIFC Courts (the JT) in IGPL v Standard Chartered Bank and Assas OPCP Ltd v VIH Hotel Management Ltd indicate there may be a shift in the JT’s approach to conflicts of jurisdiction between the DIFC and onshore Dubai Courts.1  This is likely to reduce the risk of parties being able to “torpedo” DIFC Court proceedings by commencing parallel proceedings in the onshore Dubai Courts.

Prior to the IGPL and Assas rulings, it appeared that the existence of any “parallel proceedings” in the onshore Dubai Courts would likely result in the JT finding that such courts had prevailing jurisdiction and that the DIFC Courts should stop hearing the case.  The JT appeared to adopt a relatively low threshold for what constituted parallel proceedings, including considering proceedings filed before the Amicable Settlement of Disputes Centre (a court administered mediation alternative to the judicial process) as sufficient to grant the onshore Dubai Courts jurisdiction.

The IGPL and Assas rulings are welcome examples of a more sophisticated and commercial approach to the threshold for establishing a conflict of jurisdiction.  They confirm the separate and distinct jurisdiction of the DIFC Courts to:
  • proceed with substantive proceedings despite an outstanding jurisdictional challenge in the (onshore) UAE Supreme Court (IGPL); and
  • grant interim relief where there are related substantive proceedings in the Dubai Courts (Assas).
It should be noted that these rulings do not alter the impact of the previous JT decisions on the conduit enforcement jurisdiction of the DIFC Courts, which continue to indicate that the Dubai Courts will have prevailing jurisdiction where there are any parallel proceedings in the DIFC Courts in relation to the enforcement of: (i) onshore Dubai arbitral awards; (ii) foreign arbitral awards; or (iii) foreign court judgments. 

Footnotes:

1 Cassation No. 7 of 2017 and Cassation No. 8 of 2017. We have previously reported on decisions of the JT, which appeared to undermine the ability of the DIFC Courts to act as a conduit jurisdiction for enforcement in onshore Dubai: Enforcing arbitration awards and foreign court judgments in Dubai (April 2017) and The conduit jurisdiction of the DIFC Courts

Further information

This case summary is part of the Allen & Overy Legal & Regulatory Risk Note, a quarterly publication. For more information please contact Karen Birch – karen.birch@allenovery.com, or tel +44 20 3088 3710.

Legal and Regulatory Risk Note
Middle East