<p>In our January 2010 Law Update edition, we published a cover story of the  same name which explored the ground breaking developments and major issues that  have dominated the agenda of the Dubai International Financial Centre (DIFC)  Courts, an English language common law court, during the five years since their  establishment.&nbsp;&nbsp; A further two years on and in a landmark development, the once  limited jurisdiction of the DIFC Courts has been opened to all local, regional  and international companies, making Dubai one of the most unique, distinctive  and innovative jurisdictions for dispute resolution in the world.<br /><br />In  January 2010, it was abundantly clear that the DIFC Courts had already become a  prominent feature of the legal landscape in Dubai, having taken decisive steps  to reinforce their position as a world renowned legal system that is  transparent, reliable, accessible and efficient dispensing equal justice  according to the law and international best practice.&nbsp; 2009 in particular was a  pivotal year in the development of the DIFC Courts which witnessed the  introduction of significant protocols and initiatives designed to enhance access  to justice and develop standards of legal procedure and process to provide the  certainty, transparency and efficiency expected by the institutions operating  within the DIFC.<br /><br />The DIFC Courts were set up under two laws enacted by  His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice President of the UAE  and Ruler of Dubai. Dubai Law No. 12 of 2004 established the Judicial Authority  at the DIFC and set out the jurisdiction of the Courts, while allowing for the  independent administration of justice in the DIFC (the Judicial Authority Law).  DIFC Law No. 10 of 2004 outlined the powers, procedures, functions and  administration of the DIFC Courts.&nbsp;&nbsp;<br /><br />Previously, the jurisdiction of the  DIFC Courts was limited to civil or commercial cases and disputes that fell  within one of the four jurisdictional gateways set out in Article 5A(1) of the  Judicial Authority Law.&nbsp; Where the DIFC Court had jurisdiction, the jurisdiction  of the Dubai Courts was specifically excluded except in relation to criminal and  matrimonial matters.&nbsp; In order for the dispute to fall within the DIFC Courts&rsquo;  jurisdiction, there must have been a connection to the DIFC whether with respect  to the subject matter, the location of the parties or the transaction  concluded.&nbsp; The effect was to create a &ldquo;common law island in a civil law ocean&rdquo;  to quote the DIFC Courts Chief Justice Michael Hwang.<br /><br />This changed on 31  October 2011 with the signing of Dubai Law No 16 of 2011 (the Law) which amended  the jurisdictional limitations in the Judicial Authority Law.&nbsp; Now, Article  5A(2) of the new Law permits parties to a contract to agree clearly and  expressly in writing to refer their civil and commercial dispute to the DIFC  Courts, even where there is no connection to the DIFC (and as long as no final  judgment has been issued by another Court).&nbsp; Moreover, if a dispute has already  arisen it can still be resolved in the DIFC Courts if both parties agree to have  it heard it there.&nbsp; In other words parties, wherever located, are now free to  &ldquo;opt in&rdquo; to the jurisdiction of the DIFC Courts and elect the DIFC Courts to  adjudicate their dispute.&nbsp;&nbsp;<br /><br />However, where parties have not agreed  clearly and explicitly in writing to refer their disputes to the jurisdiction of  the DIFC Courts, and the dispute has a connection to the DIFC, then the DIFC  Courts still maintain exclusive jurisdiction in relation to civil and commercial  cases that fall within one of the now five jurisdictional gateways set out in  Article 5A(1) of the Law.&nbsp;&nbsp; Although these jurisdictional gateways have also  been amended under the Law, the gateways still demand a connection to the DIFC  whether it be territorial or based on the identity of the parties or the subject  matter of the proceedings.<br /><br />Importantly, processes and procedures relating  to the enforcement of judgments, orders and awards inside and outside the DIFC  are dealt with in Article 7 of the Law and have the power of law.&nbsp; Previously  enforcement was the subject of a Protocol of Enforcement between the Dubai and  DIFC Courts.<br /><br />Ultimately, the Law represents choice &ndash; choice for local,  regional and international business between the UAE&rsquo;s Arabic language civil law  courts or English language common law courts to resolve their disputes.&nbsp; Indeed  Michael Hwang, Chief Justice of the DIFC Courts said when commenting on the Law:  &ldquo;The expansion of the DIFC Courts&rsquo; jurisdiction makes us even more accessible to  the communities in which we operate and whom we serve.&nbsp; The importance of this  change is that our Courts are now available to all who wish to choose us as  their preferred forum for resolution of their disputes, and now widens the  choice of forum for businesses in Dubai and elsewhere.&rdquo;<br /><br />Businesses now  have the opportunity to choose the dispute resolution forum that best suits  their business needs and reflects the commercial reality of their business and  industry. Whilst both the DIFC Courts and the UAE local Courts share a  commitment to justice and the rule of law, the court process and procedure that  applies in each are very different, reflecting the two different legal systems  in which they operate.&nbsp;&nbsp; The choice of forum and jurisdiction for the  determination of disputes in a contract (and particularly when considering a  choice between the UAE local Courts and the DIFC Courts) depends on a range of  important factors including the identity and domicile of the parties; the  governing law of the contract; the subject matter of the contract and the  location of assets.&nbsp;<br /><br />Choosing a dispute resolution forum and jurisdiction  in a contract should not be taken lightly.&nbsp; In many cases it involves a  balancing act of a number of factors depending upon the identity of the parties  and the nature of their contractual relationship and business.&nbsp; Whilst the  common island just got a little bigger in our UAE civil law ocean, with the new  Law, Dubai has underlined its commitment to supporting investors and businesses  locally and internationally by giving them the choice between a number of world  class forums for the resolution of business disputes.&nbsp;&nbsp; <br />Al Tamimi &amp;  Company has one of the leading DIFC Court litigation practices in the region  with extensive experience in advising on and litigating in the DIFC Courts.&nbsp; We  have been involved in many of the leading and significant cases heard in the  DIFC Courts to date.&nbsp;<br /><br />Please get in touch with your existing contact at  Al Tamimi &amp; Company or alternatively the head of our DIFC litigation  practice, Rita Jaballah, to discuss the Law directly and in particular how it  may assist and impact your business.</p>