DIFC Courts Annual Report 2021 by difccourts

ANNUAL REPORT 2021

@difccourts

www.difccourts.ae

@difccourts

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

HIS HIGHNESS SHEIKH MOHAMMED BIN RASHID AL MAKTOUM VICE PRESIDENT AND PRIME MINISTER OF THE UAE AND RULER OF DUBAI

Annual Report 2021

HIS HIGHNESS SHEIKH MAKTOUM BIN MOHAMMED BIN RASHID AL MAKTOUM DEPUTY RULER OF DUBAI, DEPUTY PRIME MINISTER, MINISTER OF FINANCE, AND PRESIDENT OF THE DUBAI INTERNATIONAL FINANCIAL CENTRE (DIFC)

Annual Report 2021

HIS EXCELLENCY ESSA ABDULFATTAH KAZIM GOVERNOR OF THE DUBAI INTERNATIONAL FINANCIAL CENTRE (DIFC)

Annual Report 2021

TABLE OF CONTENTS

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

MESSAGE FROM THE CHIEF JUSTICE

MESSAGE FROM THE DIRECTOR

THE YEAR AT A GLANCE

FAST FACTS

AWARDS

CASE STATISTICS Court of First Instance Small Claims Tribunal Enforcement

HISTORICAL DATA

JUDICIAL EXCELLENCE New Judges Digital Economy Court

SERVICE EXCELLENCE Court User Service Performance Committees Practice Directions & Rules Amendments Pro Bono Programme

CONNECTIVITY New Partnerships Outreach & Engagement Enforcement Overview

INNOVATION Courts of Space Electronic Seal Region’s First Fully Paperless Court

APPENDIX Wills Service Notable cases

Annual Report 2021

MESSAGE FROM THE CHIEF JUSTICE Welcome to the DIFC Courts Annual Report 2021. Since 2004, the framework of DIFC rules and principles has established a foundation for companies to enter into local and cross-border commercial contracts to achieve their business objectives. This brings order and predictability to business transactions and provides a basis for growth and economic development. Concurrently, the DIFC Courts has led with the necessity for our courts to develop not just an institution to hear cases, but also to contribute to the style and manner in which the court user journey is synthesised. We continue our mission to generate the best from litigation, arbitration, and mediation to provide a new, more modern set of procedures for resolving disputes. The DIFC Courts also actively creates an environment which maintains the independence of judges and upholds the trust and confidence they have earned among the international business and legal communities, while the Registry team continues to set new benchmarks for efficiency and service. In January 2021, four new judges were sworn into the DIFC Courts. In his capacity as the Ruler of Dubai, Vice President and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum has issued Decree No. (6) of 2021 appointing Lord Angus Glennie and Sir Peter Gross as Judges to the Court of Appeal (CA). The Decree also appointed HE Nassir Al Nasser and HE Maha Al Mheiri as Judges to the Court of First Instance (CFI) at the DIFC Courts. As well as reinforcing our current panel of judges with additional prominent international expertise, the DIFC Courts has further achieved a new milestone by appointing the next generation of Emirati judges with trans-systemic expertise across civil and common law. It also gives me great pleasure to confirm that in 2021 His Excellency Justice Omar Al Mheiri was also appointed as the new Director of the DIFC Courts by His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and President of the DIFC. This will formalise the leadership role H.E. Justice Omar Al Mheiri also assumed in recent years, especially during the COVID-19 pandemic, ensuring the DIFC Courts remains committed to maintaining our high standards of service delivery to court users. Our dedication to enhancing the user experience is strengthened by adopting smart technologies, automated processes, and state-of-the-art courtroom communications equipment. This has also played a key role in supporting the increasing international caseload. There was also a noticeable increase in the number of ‘opt-in’ cases during 2021, with 50% of claims in the Court of First Instance (CFI) over 60% of cases in the Small Claims Tribunal (SCT) originating from parties electing to use the DIFC Courts to resolve their disputes.

Statistics confirm that the DIFC Courts is not only maintaining all services, but is simultaneously increasing operational efficiency, substantially increasing digital Orders & Judgments, as well as over 95% of hearings conducted remotely. The DIFC Courts also confirmed its status as the first paperless Court in the region in 2021, with 100% of internal processes and customer-facing services now operating fully digital. This rapid transition to fully digital remote hearings in 2021 also aligns the DIFC Courts with the directive issued in June 2021 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, with the Ministry of Justice instructed to hold 80% of litigation sessions virtually on a permanent basis before the end of 2021. By way of reference, in 2021, the total value of claims and counterclaims across all Divisions was AED 6.1 billion, with an average case value of AED 46.7 million for cases filed with the CFI. Reinforcing the Courts’ record of certainty for business through enforceable judgments, the total value of enforcement claims filed amounted to AED 2.3 billion, an increase of 108% year-on-year. In a more recent announcement, the DIFC Courts confirmed the launch of a new Division in December 2021. The international Digital Economy Court is aimed at simplifying the settlement process of complex civil and commercial disputes related to the digital economy, reviewing national and international claims related to current and emerging technologies, including big data, blockchain, cryptocurrencies, artificial intelligence, and cloud services. When something truly innovative hits the market, new legal questions around liability and applicable laws and regulations are posed. In response, regulators and policymakers set to work to ensure the necessary legal framework is in place to protect both people and businesses. Finally, court systems step in to resolve new types of cases and disputes. In an era of significant technological disruption, this process becomes ever faster and more dynamic. This prompted the DIFC Courts, to think ahead. If new technologies are creating challenges for regulators, what will the impact be on the court systems that will resolve the commercial disputes that inevitably arise? Moreover, just as the UAE is a true leader in adopting innovations, is there an opportunity to ensure that the country also remains at the forefront of commercial justice in the years and decades ahead.

Zaki Azmi Chief Justice

Annual Report 2021

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

MESSAGE FROM THE DIRECTOR Welcome to the DIFC Courts Annual Report 2021. Whilst the DIFC Courts has developed a directive to absorb the maturing needs of the regional legal community, the original and purest foundational mandate still remains; to promote Dubai and the UAE’s geographic position in the Gulf as a significant strategic advantage for international investors - a gateway bridging those working in South and East Asia, the Middle East, Europe, Africa, and the western hemisphere. The reputation of DIFC Courts as a safe harbour and business gateway continues to mature; the provision of an environment which business, both domestically and internationally can trust, one in which contracts can be enforced and disputes resolved fairly and swiftly, one of certainty and predictability, are all vital in achieving core strands of our mission at the DIFC Courts. The increasingly international nature of our caseload is a clear signal that international businesses with interests in the Middle East region consider the DIFC Courts to be their first choice for dispute resolution, fulfilling the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to establish the city as a global hub for business. In a world that is more globalised and connected than ever, one element still dictates the success of commerce – trust, and the ability to trade securely with business certainty. We are seeing the transnational movement of goods and services across the world through hundreds and thousands of different companies. Inevitably this sustained flow of commerce will attract disputes. In 2021, as a way to protect court users, reinforce the security and integrity of documentation, and eradicate tampering of official documents, the DIFC Courts acquired the qualified electronic seal solution Ethaq. Through this unique partnership with Dubai Electronic Security Center (DESC) and Digital Dubai Authority (DDA), the DIFC Courts became the first UAE Court and first Dubai entity to obtain Ethaq. In 2021, the Court Tech Lab initiative was also activated, with companies entering a competition in conjunction with DFF’s Accelerator Programme in Area 2071. In exploring how judicial systems can be strengthened through technology, the Court Tech Lab unites individuals and companies helping to prototype and launch the advancement of court-based technology. Since our inception, the DIFC Courts has pioneered the way courts services are delivered, with technology and digital infrastructure at the core. We continue our drive towards new cutting-edge digital transformation and equipping our court users with the most advanced tools, creating legal security in an era of technological disruption.

In 2022, we will be launching Phase 2 of our Court Tech Lab initiative, a project built, launched, and progressed to position Dubai as the city that pioneers new industry-specific technologies. This initiative is a world first and it brings exciting new developments within the sphere of court-specific technologies and how we best deliver access to justice. By combining a modern and flexible digital infrastructure with judicial and service excellence, we endeavour to set a new benchmark for cultivating justice for global businesses. On the Courts of the Future front, the DIFC Courts and the Dubai Future Foundation (DFF) embarked on a new initiative and activated Courts of Space. The launch of the project signals to the international space community the intent of the UAE to play a leading role in advancing its judicial systems to specifically direct capacity and capability to commercial space-related disputes. Later in the year, the Courts also announced the formation of an international Working Group. Consisting of public and private sector bodies and experts, the Working Group is exploring spacerelated legal innovations and providing an outlook on potential outcomes of scenarios revolving around space-related disputes The DIFC Courts continued to strengthen its partner ecosystem in 2021 and signed several memoranda with entities across the public and private sectors, as well as with academic institutions, including, Ajman Media City Free Zone (AMCFZ), Ajman Chamber of Commerce and Industry (ACCI), Emaar Properties, Dubai World Trade Centre Authority (DWTCA), Umm Al Quwain (UAQ) Chamber of Commerce and Industry, and the American University in the Emirates (AUE). On a final note, the DIFC Courts has very recently developed a new roadmap for 2022 -2025 with our Strategic Work Plan, aligning the Courts’ projects and initiatives to actively support federal, local and DIFC strategic objectives. The DIFC Courts plays an important role in supporting Dubai’s status as a global business hub by engendering trust, confidence, and certainty. Responding to today’s dynamic paradigms, we drive initiatives toward judicial excellence; service excellence; connectivity; and innovation. Harnessing these four pillars is what drives DIFC Courts to become one of the world’s leading commercial courts.

H.E. Justice Omar Al Mheiri Director, DIFC Courts

Annual Report 2021

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

YEAR AT A GLANCE AED 6,082,217,559

Total value of claims and counterclaims filed across all divisions

AED 2,262,926,823 Total value of Enforcement claims

AED 3,172,817,526

Total value of claims and counterclaims filed with the Court of First Instance (CFI)

361

Small Claims Tribunal (SCT) cases processed

AED 467,799,734

Total value of claims and counterclaims filed with the Technology & Construction Division (TCD)

AED 105,772

Average value per claim filed with Small Claims Tribunal

Launch of Digital Economy Court

AED 141,758,718

Total value of claims and counterclaims filed with the Arbitration Division (ARB)

100%

Internal processes and customer-facing services as now operating fully paperless

Launch of the Courts of Space

Annual Report 2021

FAST FACTS

59% DIFC Courts team are women

38%

152

of employees are UAE nationals

Registered law firms

816

Registered individual lawyers

Region’s ﬁrst fully digitally integrated e-Courtroom and Case Management System in 2016 Region’s ﬁrst ‘paperless’ e-bundling solution in 2018 First Court in the world accredited to the International Standards for Service Excellence (ISSE) First ‘smart’ Small Claims Tribunal in 2016 First Dubai entity and first UAE Court to acquire eSeal solution Ethaq Judges from across the globe including United Arab Emirates, United Kingdom, Malaysia, and Australia Cooperation agreements signed with ten overseas courts, in the US, UK, China, Australia, South Korea, Hong Kong, Singapore, Kazakhstan, Zambia, Malaysia and Kenya.

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

AWARDS

Best Digital Government Experience Award – Seamless Awards, 2021 Innovative Initiative of the Year Award – GovTech Awards, 2021 Best Blockchain Focused Document Authentication Initiative, 2021 Best Will Registration Service (UAE) – MEA Business Awards ‘Best Remote Access Technology Implementation of the Year’ award from tahawultech.com GCC GOV HR Awards 2020, Organisation of the Year for Women Empowerment CIO 100 Awards, 2018 and 2019, Tahawul Tech MENA Legal Services CEO of the Year, Arabian Business CEO magazine Awards, 2018 National Association of Court Management Top 10 Court Technology Solutions Award for Smart SCT in Washington, D.C. Editor’s Choice Award at the ICT Achievement Awards Computer News Middle East (Small Claims Tribunal) Excellence in Innovation Award,The Middle East Legal Awards (The Oath) Best Customer Experience Strategy, Service Olympian Awards Excellence in International Legal Services, UK Law Society Awards Best Customer Premises, Olympian Awards International Standard for Service Excellence (TISSE) certification UAE Customer Service Week STAR award for Individual Skills UAE Customer Service Week STAR award for Best Public Sector Initiative Idea of the Year Award for the Code of Professional Conduct, Ideas Arabia

Annual Report 2021

CASE STATISTICS

Total number of cases (CFI, TCD, ARB, ENF & SCT) 747 active cases

Total value of cases (CFI, TCD, ARB, ENF & SCT) AED 6,082,217,559

Court of First Instance (CFI) *including Technology & Construction Division (TCD) and Arbitration Division (ARB) The Court of First Instance (CFI) has exclusive jurisdiction over any civil or commercial case when it relates to the DIFC. It can also hear cases when the contract in question specifies DIFC Courts’ jurisdiction (pre-dispute jurisdiction) or when both parties elect to use DIFC Courts to resolve a dispute which has already arisen (post-dispute jurisdiction). One Judge hears proceedings in the CFI. Established in 2017 and headed by Justice Sir Richard Field, the Technology and Construction Division (TCD) draws on specialist judges and a new set of industryspecific rules to fast-track dispute resolution, providing

greater certainty to businesses in court. The Division will only hear technically complex cases. The Arbitration Division (ARB), mandated to accommodate the rapidly increasing number of arbitration-related cases. The DIFC Courts has also launched an Arbitration Working Group, the first court in the region to introduce such an initiative. The panel of experts is tasked with reinforcing and sharing developments and best-practices, encompassing an advisory team of arbitration experts.

AED 3,782,375,979

108 cases

Courts of First Instance

Total value of claims and counterclaims (CFI, TCD and ARB)

6 cases

AED 46,695,999

Technology & Construction Division

Average case value (CFI, TCD and ARB)

33 cases

Arbitration Division @DIFCCOURTS

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

Small Claims Tribunal (SCT)

Enforcement (ENF)

The Small Claims Tribunal (SCT) can hear claims within the jurisdiction of the DIFC in three situations. First, where the amount or value of the claim does not exceed AED 500,000. Second, when the claim relates to the employment or former employment of a party and the amount or value of the claim exceeds AED 500,000 and all parties to the claim elect in writing that it be heard by the SCT.

The DIFC Courts continued the successful development of domestic and international avenues for enforcing judgments and orders. Enforcement proceedings are now the secondlargest type of claims in the Courts, after Court of First Instance proceedings.

There is no value limit for the SCT’s elective jurisdiction in the context of employment claims. Third, if in the context of claims which are not employment-related, the amount or value of the claim does not exceed AED 1 million, and all parties elect in writing that it be heard by the SCT, such election can be made in the underlying contract (if any) or subsequently.

361 cases Small Claims Tribunal

239 cases

Enforcement

AED 2,262,926,823

Total value of claims and counterclaims

AED 10,239,487

Average case value

AED 36,914,756

Total value of claims and counterclaims

AED 105,772

Average case value 21

Annual Report 2021

HISTORICAL DATA Total number of cases across all Divisions, 2007 - 2021

Number of Probate applications

@DIFCCOURTS

DIFCCOURTS

*Wills and Probate ser

rvice launched in 2015

Annual Report 2021

Number of Wills registrations

Annual Report 2021

CFI cases

ARB cas

TCD cases (*TCD launched in 2017)

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

ses

Annual Report 2021

SERVICE MILESTONES Custom built fully integrated digital Court Management System (CMS)

Region’s first e-Registry

2009

2017

2016

@DIFCCOURTS

e-Service through social media direct and instant messaging for SCT

DIFCCOURTS

Region’s first secure ‘paperless’ e-bundling cloud-based technology

2017

Region’s first ‘Smart’ Small Claims Tribunal (SCT)

@DIFCCOURTS

Virtual Registry for the Wills Service

2018

2017

Courts of the Future Initiative with Dubai Future Foundation (DFF)

Annual Report 2021

World’s first Court Tech Lab initiative with Dubai Future Foundation

2019

Court of the Blockchain initiative with Smart Dubai

Courts of Space

2021

2020

Video-conferencing system for Wills Service

Digital Economy Court

2021

Electronic seal ‘Ethaq’

Annual Report 2021

JUDICIAL AND ADMINISTRATIVE EXCELLENCE

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

New Judges

In 2021, in his capacity as the Ruler of Dubai, Vice President and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum has issued Decree No. (6) of 2021 appointing Lord Angus James Scott Glennie and Sir Peter Henry Gross as Judges of the Court of Appeal (CA) at the DIFC Courts.

law and justice with full integrity, loyalty, and diligence. H.E. Justice Nassir Al Nasser and H.E. Maha Al Mheiri took the oath virtually from the digitally integrated DIFC Courts courtroom, with Justice Lord Angus Glennie and Justice Sir Peter Gross attending virtually from separate locations across the UK.

The Decree also appointed Nassir Hashem Nasser Abdullah Al Nasser and Maha Khalid Mohammed Al Mheiri as Judges of the Court of First Instance (CFI) at the DIFC Courts.

Zaki Azmi, Chief Justice, DIFC Courts, said: “The DIFC Courts serves the international business community by maintaining a world-class bench. As well as reinforcing our current panel of judges with additional prominent international expertise, the DIFC Courts has further achieved a new milestone by appointing the next generation of Emirati judges with trans-systemic expertise across civil and common law. We are also very proud to be the first court in the world to appoint a female Emirati judge to a common law court. These appointments will complement our already impressive independent, learned, and experienced bench that has earned trust and confidence, both locally and globally.”

In presence of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council and H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and President of the Dubai International Financial Centre (DIFC), all four judges took their oaths through a virtual ceremony and pledged to uphold the rule of

Digital Economy Court

The DIFC Courts launched a ‘Specialised Court for the Digital Economy’ aimed at simplifying the settlement process of complex civil and commercial disputes related to the digital economy. The new specialised division deals with national and international disputes related to current and emerging technologies. It covers a wide variety of fields including big data, blockchain technologies, artificial intelligence, cloud services, and cryptocurrencies.

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and President of the Dubai International Financial Centre (DIFC), emphasised that the rollout of the new court represents a groundbreaking move to stay abreast of the ever evolving and thriving global digital economy. The court will be supported by highly qualified human resources, a solid and highly reliable infrastructure, and research and development in the technology sector. His Highness affirmed, “The infrastructure of our courts in Dubai will keep pace with our future economic aspirations.” His Highness also highlighted that the launch of the new court gives an impetus to efforts to develop a new judicial support system capable of meeting the requirements of the digital transformation process and adoption of upto-date technologies. His Highness said: “The goal of the Judicial System and Courts in Dubai is to deliver prompt justice in a country where the law prevails.” With the continuous growth of digital transformation across the world, trade and services inevitably integrate digital technology in their fundamental operations. Now, more than ever an innovative judicial system is

key to promoting growth as well as providing security, reliability, and protection for companies and businesses. The DIFC Courts is in the process of appointing eminent judicial experts to operate and supervise the digital infrastructure and advanced service capabilities of the Specialised Court. The new court will start providing services in the first quarter of 2022. The Digital Economy Court (DEC) complements specialised divisions in existing courts including the Technology and Construction Division and the Arbitration Division. In early 2022, the new court will assign a group of international lawyers and industry experts to draft and approve new rules for the Digital Economy Court, which will then be issued after a 30-day public consultation campaign. H.E. Justice Omar Al Mheiri, Director, DIFC Courts, said, “The potential of the UAE’s judicial systems to support and protect the continuity of business projects will prove to be extremely vital to the country’s long-term goals of attracting and retaining foreign investment. Dubai’s well-grounded commitment to strengthen a highly competitive business environment is key to its vision of deep-rooted economic diversification” he furthered.

This think tank has enabled the DIFC Courts to streamline its major Court tech projects under the Courts of the Future, pooling talent and resources from global partners and experts across the fields of law, technology, and business, assembled to help courts systems accommodate and leverage emerging technologies.

Annual Report 2021

THE DIFC COURTS BENCH

Membership of the judicial bench now holds more than 300 years of combined professional experience:

Judges

Chief Justice Zaki Azmi, Malaysia

Deputy Chief Justice H.E. Omar Al Mheiri, UAE

H.E. Justice Ali Al Madhani, UAE

H.E. Justice Shamlan Al Sawalehi, UAE

Justice Sir Richard Field, England & Wales

Justice Sir Jeremy Cooke, England & Wales

Justice Roger Giles, Australia

Justice Wayne Martin, Australia

Justice Robert French, Australia

Justice Lord Angus Glennie, Scotland

Justice Sir Peter Gross, England & Wales

@DIFCCOURTS

DIFCCOURTS

H.E. Justice Nassir Al Nasser, UAE

DIFCCOURTS

H.E. Justice Maha Al Mheiri, UAE

Annual Report 2021

Executive Team

H.E. Justice Omar Al Mheiri

Amna Al Owais

Reem Al Shihhe

Director

Chief Registrar

Chief Operating Officer

Registry Team Nour Hineidi

Ayesha Bin Kalban

Delvin Sumo

Hayley Norton

Maitha Al Shehhi

Registrar

Deputy Registrar

Assistant Registrar

Small Claims Tribunal Senior Case Progression Officer & Pro Bono Programme Leader

Senior Case Progression Officer

Ayman Saey

Abdalla Al Diqqi

Alanood AlRiyami

Shahla Al Ghareeb

Nilofer D’souza

Senior Judicial Clerk

Enforcement Officer & Bailiff

Small Claims Tribunal Case Progression Officer

Case Progression Officer

Compliance Officer

Sharini Abdulsabur Jaji

Shahin Shaikh

Cheryl Fernandes

Customer Service & Compliance Officer

Senior Administrator

Judicial Coordinator

Operations Team Business Excellence

Communications

Finance

Human Resources

Dulanee De Abrew Manager – Business Excellence & Internal Audit

Michael Byrne Head of Communications

Roserfinalyn Quinto Senior Manager - Finance

Samia Al Rajaby HR Operations & Facilities Management Manager

Maryam AlBastaki Officer – Strategic Communications

Information Technology Arul Vigin Head of IT

Adil Khan Senior Infrastructure Engineer Ajaz Wani IT Operations Engineer

Cherilyn Del Mundo Accountant

Arleen Lazo Senior HR Officer

Santosh Gowda Accountant

Government & International Relations Ahmed Al Kamali Manager - Government & International Relations & Chief Justice Office

Support staff Saba Piracha Customer Support Officer

Mercedes Oharriz Executive Assistant to the Chief Registrar & Chief Operating Officer Kamal Hossain Office Clerk Simon Kabiru Office Clerk

Stfahan Rodrigo Office Clerk

Annual Report 2021

SERVICE EXCELLENCE

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

COURT USER SERVICE PERFORMANCE

ISO 9001:2015

Quality Management System In 2021, the DIFC Courts successfully obtained re-certification by external auditors without any observations of non-conformities on the selected process samples audited. Preparations for the external audit includedpre- internal quality audits, ’champions’ training, and, organisation-wide awareness sessions. Additionally, a thorough review of our quality management system was launched, as well as an application of process improvement implementation, as a part of continuous upgrades to our ISO certification process.

In 2021, the DIFC Courts resumed mystery shopper survey across all client facing team members and further extended to evaluate the performance of our social media accounts, common areas facilities and security of the premises in around DIFC Courts. Overall, all client facing team achieved an average score of 90% which is considerably a high score when compared to our shift from most face to face services to virtually assisted service deliveries by our client facing team members. Improvements were also implemented across human resources, IT services infrastructure enhancement, increased research and due diligence with vendor contractual processes, and widened departmental performance monitoring.

Annual Report 2021

COMMITTEES

The DIFC Courts re-structured several committees to assist in providing an efficient, accessible, transparent and professional service to all users.

Courts’ Users’ Committee The DIFC Courts’ Users’ Committee is an independent liaison body between the DIFC Courts and Courts users, with the brief of supportin cost effective and professional service provision.

Chairperson Amna Al Owais, Chief Registrar, DIFC Courts

Committee members

Nour Hineidi, Registrar, DIFC Courts Jacques Visser, General Counsel, DIFC Authority Muna Dandan, General Counsel, Dubai Financial Services Authority Ben Bruton, Partner, Winston & Strawn Dr Hassan Arab, Partner Al Tamimi & Co. DK Singh, Managing Partner, KBH Kaanuun Dr. Mahmoud Hussain, Founding Partner, Mahmood Hussain Law Firm Nicholas Braganza, Partner, Holman Fenwick Willan Rebecca Copley, Partner, Eversheds-Sutherland (International) LLP Sharon Lakhan, Head of Arbitration & Common Law Dispute Resolution, Global Advocacy & Legal Counsel

Rules Committee

The Rules Committee meets quarterly to discuss changes and improvements to the Rules of the DIFC Courts. It comprises a wide range of legal practitioners who engage with the DIFC Courts and have significant practical experience of the Rules.

Chairperson

Deputy Chairperson

H.E. Justice Ali Al Madhani, Senior Judge of Court of Appeal and Head of International Relations of Judicial Affairs, DIFC Courts

Adrian Chadwick, Partner, Hadef & Partners

Committee members

Nour Hineidi, Registrar, DIFC Courts

Deirdre Walker, Partner Norton Rose Fulbright (Middle East)

Adrian Chadwick, Partner, Hadef & Partners

Michael Black QC, Barrister, XXIV Old Buildings

Rita Jaballah, Partner, Al Tamimi & Co

Rebecca Copley, Partner & Head of Litigation, Eversheds Sutherland

Phillip Punwar, Partner, Baker Botts

David Russell, QC Barrister, Outer Temple Chambers Sara Sheffield, Partner, Holman Fenwick Willan

Alessandro Tricoli, Partner, Fichte & Co Legal Consultancy

Damian Crosse, Partner Pinsent Mason LLP

Sheila Shadmand, Partner, Jones Day Graham Lovett, Partner, Gibson Dunn

Nick Braganza, Partner, Holman Fenwick Willan (Middle East ) LLP

Ayesha Bin Kalban, Deputy Registrar & Deputy Small Claims Tribunal Registrar, DIFC Courts

Shane Jury, Partner, Addleshaw Goddard (Middle East) LLP

@DIFCCOURTS

DIFCCOURTS

James Abbott, Partne, Clifford Chance LLP

DIFCCOURTS

Annual Report 2021

In-House Counsel Committee

Formerly the General Counsel Forum, the In-House Counsel Committee was re-launched in 2019 and continued with the mandate of for dialogue and liaison between the DIFC Courts and senior in-house counsel, with the inaugural refreshed committee held in December 2019. Each event brings together participants to share experience, examine trends and discuss global dispute resolution best practices.

Chairperson Amna Al Owais, Chief Registrar, DIFC Courts

Deputy Chairman H.E. Justice Nassir Al Nasser, DIFC Courts

Committee members

Muna Dandan, General Counsel, DFSA Robert Lewsley, Senior Group Counsel, Standard Chartered Bank Jacques Visser, Chief Legal Officer, DIFC Authority Malek Al Khashashneh, Legal Director, Majid Al Futtaim Holding Bassam Moussa, Acting In-House Counsel, Emirates NBD Khaled Rabbani, General Counsel, Majid Al Futtaim Holding Stavros Panayi, General Counsel, Careem/Uber Hassan Bouadar, Vice President of Legal & Regulatory Affairs, Fedex & TNT Express Dr Abobakr Dafalla, Regional Legal Counsel, AT Kearney Ziad Issa, General Counsel, EXPO 2020 Gabriel Falda, Assistant General Counsel, Abu Dhabi Commercial Bank (ADCB) Walid Karam, Senior Legal Director, Emaar Emad Farouq, Senior Legal Counsel, Dubai Land Department (DLD) Dominic Varley, Head of Legal, Meraas Heba Hamdy, Regional Counsel, Cisco Dr Nimer Basbous, Group General Counsel, First Abu Dhabi Bank (FAB)

Pro Bono Committee

The Pro Bono Committee is comprised of seven members and includes: The Pro Bono Programme Leader and six (6) lawyers who are registered with the DIFC Courts’ Register of Legal Practitioners.

Committee members

Hayley Norton, Pro Bono Programme Leader, DIFC Courts Adam Bradshaw, Legal Director, DLA Piper Peter Smith, Senior Associate, Charles Russell Speechlys Rebecca Kelly, Managing Partner, Morgan Lewis Zara Merali, Senior Associate, Freshfields Dr. Maryam-Krystyna Nechaieva, Legal Counsel, Mohammed Bani Hashem Advocates & Legal Consultants Janine Mallis, Senior Associate, Herbert Smith Freehills

Annual Report 2021

PRACTICE DIRECTIONS AND RULES AMENDMENTS

In 2021, we launched several Practice Notes: Practice Note No. 1 of 2021: Referral of cases to Mediation Practice Note No. 2 of 2021: Index of Documents at the Time of Filing Practice Note No. 3 of 2021: Procedure for the Appointment of Liquidators Practice Note No. 4 of 2021: Requesting Copies of a Will Where the Requesting Party is Not Named in the Will

In line with the strategic plans, it is intended that Practice Notes will gradually replace Practice Directions and Registrar Directions. All Practice Notes will be consolidated into an (indexed) single electronic guidance note entitled, The DIFC Courts’ Consolidated Guidance Note. This project will be spearheaded by the Registry, with support from the Rules Committee and Rules Drafting Sub-Committee.

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

PRO BONO PROGRAMME

In 2021, the Pro Bono Programme helped support a number of Barbri students to obtain their required hours of Pro Bono work as part of their application for the New York Bar. In addition, the Pro Bono Programme introduced its first Summer Internship Programme, welcoming law students and graduates to gain an insight into the daily running and management of the Programme.

The pioneering Pro Bono Programme continues with its twin aims – providing valuable free legal services to clients of the DIFC community and supporting aspiring lawyers in Dubai and across the UAE.

Throughout 2021, and in line with the social distancing requirements, the Pro Bono Programme continued to assist individuals by connecting those in need with volunteer legal professionals via our online consultation service. Providing legal services to people without significant financial resources is an important way to broaden access to justice. By providing a framework for delivering free legal services, the programme can accommodate law firms and individual lawyers who wish to make meaningful professional contributions to this segment of society. From January to December 2021, over 130 people received assistance from our volunteer legal professionals. As of 31 December 2021, the register of volunteer legal professionals in the Pro Bono Programme stood at 59 law firms and 115 individual volunteers.

Annual Report 2021

CONNECTIVITY

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

NEW PARTNERSHIPS

The DIFC Courts continued to strengthen its partner ecosystem and signed several agreements in 2021 with entities across the public and private sectors, as well as with academic institutions. Ajman Media City Free Zone

Ajman Chamber of Commerce and Industry

Emaar Properties

In an effort to enhance strategic goals and interests, with other UAE freezone entities, the DIFC Courts signed a Memorandum of Understanding & Mutual Cooperation withAjman Media City Free Zone (AMCFZ). The agreement will aid with consolidating support and cooperation between the DIFC Courts and those companies operating within AMFCZ and provide the two parties with the opportunity to consult, cooperate and exchange information in the areas of mutual interest.

The DIFC Courts signed a Memorandum of Understanding with the Ajman Chamber of Commerce and Industry (ACCI) in order to promote collaboration, knowledge sharing, and information exchange on matters of common interest, in order to support the UAE and Ajman business community. The cooperation involves the promotion of the DIFC Courts’ efficient and independent English language common law system, including promotion of the DIFC Courts Wills Service.

The DIFC Courts and Emaar Properties signed a cooperation agreement to promote the Wills Service provided by the UAE’s first Englishlanguage common law court. The agreement will encourage greater awareness and consideration across Emaar Properties’ portfolio of this unique public Wills Service, offering both investors and residents additional protection on real estate investments in the UAE.

Annual Report 2021

UAQ Chamber of Commerce and Industry

Dubai World Trade Centre Authority (DWTCA)

American University in the Emirates

@DIFCCOURTS

DIFCCOURTS

The DIFC Courts and the Umm Al Quwain (UAQ) Chamber of Commerce and Industry signed a Memorandum of Understanding. Both entities have agreed on the importance of launching awareness campaigns aimed at the business community, as well as promoting the services provided by both parties, whilst providing each other with statistics, publications, periodicals, indications, laws, and regulations governing their public services for the benefit of the end-users.

The DIFC Courts and the American University in the Emirates (AUE) signed a Memorandum of Understanding (MoU) that will foster attraction and competitiveness for the next generation of law students. Under the MoU, the two parties will utilise their capabilities to exchange information, statistics, publications, magazines, periodicals and regulations governing their public service activities. The Memorandum is based on the applicable legal systems and complements the existing legal and administrative procedures in the UAE.

DIFCCOURTS

Annual Report 2021

OUTREACH AND ENGAGEMENT An important feature of the DIFC Courts’ outreach and engagement work is welcoming delegations to Dubai and the DIFC, as well as participating in overseas trade visits and speaking at industry conferences. Visiting delegations Numerous delegations of government leaders, representatives of other court systems and students visited the DIFC Courts during 2021 to learn more about our judicial system, including: September

International Union of Judicial Officers (UIHJ)

October

H.H. Prince Dr Bandar Bin Salman Bin Mohamed Al Saud

November

Dubai Judicial Council

November

H.E. Omar Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications

November

Dubai Courts – November

Due to the ongoing COVID-19 pandemic restrictions, many delegations and external outreach and engagements, have moved to the virtual sphere. April

Ajman Media Free Zone

April

Ajman University

April

Ajman Free Zone

May

The International Union of Judicial Officers (UIHJ)

June

American University in the Emirates

October

Strathmore University

November

Fujairah Free Zone

Annual Report 2021

Public engagements Justices, Registry personnel and the Executive team actively promoted the work of the DIFC Courts to business and legal communities in the UAE and internationally in 2021. The team spoke at and attended many important domestic, regional, and international conferences, including: January

RAK Bank

February

The DIFC Academy

March

Courts and Tribunal Judiciary, United Kingdom

March

Ireland for Law

April

Dubai SME

April

Flinders University

April

World IP Forum

May

Dubai Multi Commodities Centre, DIFC Courts awareness session

June

Dubai South

June

Ras Al Khaimah Economic Zone

June

Ajman Free Zone

June

Dubai Multi Commodities Centre, Wills Service awareness session

June

Dubai Advantage

June

Dubai Future Labs

July

Dubai Multi Commodities Centre, Small Claims Tribunal awareness session

September

AmCham Dubai (American Business Council of Dubai & the Northern Emirates)

November

DIFC Courts event series

November

Mahmoud Hussain law Firm seminar

November

Ras Al Khaimah Courts Department

November

Dubai International Arbitration Centre panel discussion

November

GAR Live Dubai

November

Emirates NBD

November

UIHJ Congress

December

Hawkamah Institute for Corporate Governance, UAE & University Würzburg

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

ENFORCEMENT

Enforcement protocols on the domestic (intra Emirate) Dubai level continues to grow from strength-to-strength with regular meetings taking place between the respective enforcement teams of each, the Dubai Courts and the DIFC Courts. Enforcement with other regional and international courts is also rising each year and our connectivity network matures. With respect to enforcement of probate orders, we are extremely pleased to announce that the following entities now accept direct enforcement with the DIFC Courts (i.e., without the need to undergo judicial deputation through the Dubai Courts): • Dubai Land Department (DLD) • Road Traffic Authority (RTA)

• Abu Dhabi Police (for Abu Dhabi registered vehicles) • Dubai Economic Department (DED)

• Dubai Notary Public (DNP), Ajman Freezone • Ras Al Khaimah Economic Zone

• Ras Al Khaimah Courts Department Reinforcing the Courts’ record of certainty for business through enforceable judgments, the total value of enforcement claims filed amounted to AED 2.7 billion in 2021, an increase of 108% year-on-year, with 239 enforcement cases recorded.

Annual Report 2021

INNOVATION

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

Courts of Space The launch of the project signals to the international space community the intent of the UAE to play a leading role in advancing its judicial systems to specifically direct capacity and capability to commercial space-related disputes. In 2020, the UAE became a key player in space exploration; it aims to reinforce its position by enhancing its standing as a global business centre for trade, logistics, finance, innovation and technology. With the launch of the UAE Hope probe the country has massively boosted its science capacity with over 50 peer-reviewed contributions to international space science research.

In 2021, the Dubai International Financial Centre (DIFC) Courts and the Dubai Future Foundation (DFF) embarked on a new Courts of the Future initiative, activating Courts of Space.

The nation has also generated significant additional value in logistics by creating new manufacturing capacities and know-how. There are already multiple businesses outside the realm of the space industry that have benefited from knowledge transfer. Ultimately, the UAE’s Mars mission has generated transformative value in building capacity for a fundamentally different future national economy – one with a much stronger role for science and innovation.

Zaki Azmi, Chief Justice, DIFC Courts, said: “An integrated space industry, supported by human resources, infrastructure, and scientific research, is under way. The Courts of Space is a global initiative that will operate in parallel, helping to build a new judicial support network to serve the stringent commercial demands of international space exploration in the 21st century. As space commerce becomes ever more global and countries ever more connected, diverse, and nimble economies will need to enable growth. Complex commercial agreements will also require an equally innovative judicial system to keep pace, offering assurance and certainty to support and protect businesses.” The Courts of Space initiative has three main objectives. As a first step, an international working group of public and private sector bodies and experts is tasked with exploring spacerelated legal innovations and providing an outlook on potential outcomes of scenarios revolving around space-related disputes. Further exploration followed in 2021 with the creation of a Space Dispute Guide, encompassing a set of guidelines to support such space-related disputes, with the parallel training of judges to become space-related dispute experts after having received courses on space regulations by international bodies and regional agencies. His Excellency Khalfan Belhoul, Chief Executive Officer (CEO), Dubai Future Foundation, said: “The UAE space industry is one of the fastest-growing sectors in the country. In a short span of time,

the UAE has joined the world’s leading nations in signposting significant space wins. In 2019, we launched the MBR Space Settlement Challenge and allocated AED 2 million in seed funding to benefit 35 teams of scientists worldwide. We’ve organised a ‘Space on Earth Forum’ in partnership with United Nations Office for Outer Space Affairs (UNOOSA) to provide an overview of technological advancements made in exploring space and its association in enhancing living conditions on Earth.” “In addition, DFF also partnered with the UAE Space Agency to organise the Future of Space: Space Settlement & Emerging Technologies webinar that examined emerging technologies capable of enabling longer-term space settlement in line with the UAE’s strategic vision for space research and exploration. Our partnership with the DIFC Courts on the Courts of Space initiative marks yet another step in the UAE’s efforts to expand its nascent space sector. And as part of our mandate at the Foundation, we are committed to exploring and forecasting future trends, testing innovative technologies and if needed, introducing new legislations and develop existing ones to support our drive in becoming the leading city of the future, and strengthening Dubai’s position as a knowledge-based economy.”

Annual Report 2021

Electronic Seal

In 2021, the DIFC Courts acquired the qualified electronic seal solution Ethaq, a paperless initiative that enables digital authenticity of documents with the support of UAE PASS, the secure national digital identity platform for the United Arab Emirates. Ethaq certificate is powered by Dubai Electronic Security Center (DESC) and its Root Certificate Authority. It recognises the DIFC Courts as the first Dubai entity to acquire the entirely paperless certificate that enables court documents to be electronically signed, issued, and authenticated. Ethaq also integrates UAE PASS, the secure national digital identity platform of the UAE, in collaboration with Dubai Digital Authority (DDA), to provide an end-to-end signing solution that combines both an electronic seal and an electronic signature solution based on digitally verifiable identities. The electronic seal Ethaq will also reinforce the security and integrity of the documentation and eradicates tampering of official documents, enabling users to digitally verify the authenticity of any legal documents through the DIFC Courts website. H.E. Justice Omar Al Mheiri, Director, DIFC Courts, said: “As the first UAE Court to integrate this solution, we are maintaining our assertive push towards digital transformation and equipping our court users with the most advanced tools to ensure ease of accessing our services. This new innovative eService will ensure that the DIFC Courts continues to fulfil the requirements under the Dubai Paperless Strategy 2021 and create legal security and certainty for businesses in an era of technological disruption.” H.E. Yousef Al Shaibani, Director General, Dubai Electronic Security Center (DESC), said: “We are pleased to mark Ethaq as a monumental and revolutionary milestone in our journey towards achieving excellence for making Dubai the safest city in cyberspace. Ethaq is one of DESC’s continuous efforts in adopting forefront technologies to protect Dubai digitally. This initiative reinforces the efficiency

@DIFCCOURTS

DIFCCOURTS

of digital services to support the city’s smart transformation and achieves the visionary goals set by the Dubai Cyber Security Strategy.” H.E. Wesam Lootah, CEO of the Smart Dubai Government Establishment, said: “Dubai’s journey to becoming a fully paperless society continues with this important electronic seal initiative from DESC. Dubai Digital Authority (DDA) is leading the charge for the emirate to become the world’s smartest and happiest city, with the drive towards becoming paperless being a primary pillar of this aim. By going paperless across every sector through the use of the latest technology, Dubai is taking centre stage for the conservation of resources, safeguarding of the environment, and the creation of digitally secure transactions. DDA is committed to striving towards making use of paper in transactions a thing of the past.” As part of a phased approach, the Ethaq capability will initially be secured for all court user service documents, such as DIFC Courts Judgments and Orders, with a secondary implementation wave for all DIFC Courts internal and operational documentation set for 2022. In 2018, launched as an initiative under the Courts of the Future, the DIFC Courts partnered with DDA to create the world’s first Court of the Blockchain. Building on existing dispute resolution services, the alliance is exploring how to aid verification of court judgments for cross-border enforcement. The partnership is tasked with creating a blockchainpowered future for the judiciary which will have farreaching benefits, including streamlining the judicial process, removing document duplications, and driving greater efficiencies across the entire legal ecosystem. The new electronic seal initiative will compliment and further reinforce development of this parallel project relating to blockchain enforcement.

DIFCCOURTS

Annual Report 2021

Region’s first fully paperless Court

In 2021, the DIFC Courts officially confirmed 100% of internal processes and customer-facing services as operating fully digital. Following the launch of the Dubai Paperless Strategy by His Highness Sheikh Hamdan Bin Mohammed Al Maktoum in 2018, the DIFC Courts accelerated the integration of all services into its extensive digital infrastructure. Announced the same week as the launch of the Paperless Strategy, in February 2018 the DIFC Courts initiated the introduction of ‘paperless trials’, implementing the region’s first Courts eBundling system. The secure cloud-based technology allows court documents to be uploaded from anywhere in the world, enabling judges, lawyers, and courts staff to access case information in various formats, across multiple locations, and share with numerous users. As a part of the UAE Government’s commitment to effectively employ advanced technologies and digital platforms to continue services to the public, the DIFC Courts leveraged its digital infrastructure to stay connected with court users during COVID-19 restrictions. Existing videoconferencing and teleconferencing facilities for applications and hearings were extended, as well as the issuing of digital orders and judgments, and court users were able to access all extensive ‘eServices’ remotely. During the pandemic the DIFC Courts also injected fresh digital systems for the registration of Wills; the new video conferencing facility can be accessed via a smartphone, tablet, or a desktop device. This new digital offering is part of the existing Virtual Registry, which allows those living overseas to create and register a DIFC Courts Will. Investors, former and current residents can access it from anywhere in the world and be connected, via video link, to a compliance officer sitting in Dubai.

Among the many technologies the Courts has pioneered to re-engineer and increase access to justice, is the region’s first eRegistry in 2009, as well as digitally integrated courtroom and state-of-the-art eCourt Management System (CMS) in 2017. Special project initiatives under the Courts of the Future have also assisted the DIFC Courts with advance R&D activities, uniting individuals and companies helping to prototype and launch the advancement of court technology, such as blockchainpowered initiatives, AI-enabled programmes, and cloud-based solutions. His Excellency Justice Omar Al Mheiri, Director, DIFC Courts, said: “Since our inception, the DIFC Courts has pioneered the way courts services are delivered, with technology and digital infrastructure at the core. We continue our drive towards new cutting-edge digital transformation and equipping our court users with the most advanced tools, creating legal security in an era of technological disruption. In 2022, we will be launching Phase 2 of our Court Tech Lab initiative, a project built, launched, and progressed to position Dubai as the city that pioneers new industry-specific technologies. This initiative is a world first and it brings exciting new developments within the sphere of courtspecific technologies and how we best deliver access to justice. By combining a modern and flexible digital infrastructure with judicial and service excellence, we endeavour to set a new benchmark for cultivating justice for global businesses.” The rapid transition to fully digital remote hearings in 2021 also aligns the DIFC Courts with the directive issued in June 2021 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, with the Ministry of Justice instructed to hold 80% of litigation sessions virtually on a permanent basis before the end of 2021.

Annual Report 2021

APPENDIX

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

Wills & Probate Launched through a partnership in 2015 between the DIFC Courts and the Government of Dubai, the Wills Service was established to enable non-Muslims who are investing and living in the UAE to pass on their assets and appoint guardians for their children in line with their wishes through a Will registration service. As a part of the UAE Government’s commitment to effectively employ advanced technologies and digital platforms to continue services to the public during COVID-19 restrictions, in 2020 the DIFC Courts leveraged its digital infrastructure to offer videoconferencing for Will registrations. With individuals and businesses across the UAE now operating more ‘remotely’ , the new video conferencing facility can be accessed via a smartphone, tablet, or desktop device, allowing residents and investors to register their Will, from the safety and comfort of their own homes. The new system now allows the Testator and two (2) Witnesses to join in on the video conferencing call from different locations. The system also allows an approved Will to be directly uploaded on the system and to affix electronic signatures. Throughout 2021, all Will registrations were conducted virtually, transporting traditional walk-in appointments into the digital age. Remote registration adds an additional layer of digital access to the current Virtual Registry System for Wills, which allows those living overseas to create and register a DIFC Courts Will. Investors and residents can access it from anywhere in the world and be connected, via video link, to a compliance officer sitting in Dubai. The DIFC Courts also provides an online automated Will drafting service for the Property Will, Business Owners Will, and Financial Assets Will, with comprehensive explanatory notes, should testators wish to draft the Will independently. To further enhance the customer experience, in 2021, the Wills Service has also introduced the automated service for the most popular, Full Will, which allows testators the ability to protect their assets without limiting the number and type of assets, regardless of where they are located in the world. As the first jurisdiction in the MENA region to offer this service, once your Will is registered, it is stored as an encrypted file for 120 years on the DIFC Courts System until the enforcement or ‘Probate’ is activated by the executor, via the Probate Registry. As of December 31, 2021, the Wills Service recorded the registration of over 7,500 Wills, with more than 110 lawyers representing more than 103 law firms, based in the UAE and overseas, registered as Wills Draftsmen. A total number of 23 probate orders were also processed in 2021 by the Registry, bringing the total to 69 since 2016.

Annual Report 2021

Notable cases Abraaj Investment Management Limited (In Official Liquidation) v KPMG Lower Gulf Limited [2021] DIFC CFI 041 The jurisdiction of the DIFC Court of First Instance is set out in Article 5(A) of Dubai Law No. 12 of 2004, being the Judicial Authority Law (the “JAL”). Article 5(A)(1) (a) to (c) and (e) and Article 5(A)(2), which describe the various circumstances in which the Court has jurisdiction to hear and determine claims, are often referred to as the Court’s jurisdictional “gateways”. For example, pursuant to Article 5(A) (1)(a), the DIFC Court has jurisdiction over “Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party” and, pursuant to Article 5(A)(1)(c), jurisdiction exists over “Civil or commercial claims and actions arising out of or relating to any incident or transaction which has been wholly or partly performed within DIFC and is related to DIFC activities.” An iteration of “claims and actions” is common to each of the jurisdictional gateways. It has been held by the Court that for each jurisdictional gateway, the Court’s jurisdiction is established only in respect of a claim for a remedy which meets the gateway’s criteria, rather than for a case at large. The consequence of this is that the Court may have jurisdiction over one part of a dispute but not over another, depending on whether specific claims to remedies pass through an Article 5(A) gateway or not. Article 5(A)(1)(e) of the JAL provides that the Court has jurisdiction over “Any claim or action over which the Courts have jurisdiction in accordance with DIFC Laws and DIFC Regulations.” In Nest Investments Holding Lebanon S.A.L. & Ors v Deloitte & Touche (M.E.) & Anr CA-011-2018 (13 March 2019), the Court of Appeal ruled that Rule 20.7 of the Rules of the DIFC Court (the “RDC”) is a DIFC regulation which confers upon the Court jurisdiction. Rule 20.7 provides that “The Court may order a person to be added as a new party if: (1) it is desirable to add the new party so that the Court can resolve all the matters in dispute in the proceedings; or (2) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the Court can resolve that issue.” At [52] of the judgment, Justice Sir Jeremy Cooke stated: “The indisputable fact is that the wording of RDC 20.7 is wide enough to confer jurisdiction upon the court by giving it the power to make the order in question if the criteria are satisfied … Whilst not expressly conferring jurisdiction,

@DIFCCOURTS

DIFCCOURTS

by using that terminology, the Rule makes no reference to a requirement that any of the Article 5 (A) (I) (a)-(d) gateways should apply and for the reasons given above, were it not to confer such jurisdiction, the Rule would be robbed of most of its force.” The Court’s decision in Nest Investments meant that the DIFC Court could potentially determine the entirety of a dispute and that claims would not need to be split across jurisdictions, so long as there was a claim which engaged the Court’s jurisdiction in the usual way and it was desirable to add a new party for any of the reasons set out in Rule 20.7 of the RDC, and in which case the claim against the new party would engage Article 5(A)(1)(e) of the JAL. But while Nest Investments solved one problem, on a strict reading it gave rise to another. The Court’s jurisdiction under Article 5(A)(1)(e) of the JAL read with Rule 20.7 of the RDC would arise only where the Court was adding a new party to proceedings. As such, proposed defendants falling within the ambit of Article 5(A)(1)(e) read with Rule 20.7 but outside of the other gateways were required – again, strictly speaking – to be added to already-commenced proceedings rather than named in claim forms from the outset, with the burden on time and costs that this would natural entail. In Abraaj Investment Management Limited (In Official Liquidation) vs KPMG Lower Gulf Limited (CFI-041-2021) (3 November 2021), Martin J considered the question whether Rule 20.7 is capable of conferring jurisdiction upon the Court in relation to existing parties. Martin J held that “the Court has jurisdiction in relation to claims against parties who would have been liable to have been joined pursuant to RDC r.20.7, notwithstanding that those parties may already have been joined to the proceedings” ([132]). Permission to appeal this aspect of Abraaj Investment has been sought by the First Defendant, so it remains to be seen whether actual joinder will be reinstated as a requirement for the Court’s jurisdiction under Article 5(A)(1)(e) of the JAL read with Rule 20.7 of the RDC.

Annual Report 2021

[2020] DIFC CFI 032 (22 December 2021) In a private decision handed down on 22 December 2021 in CFI032-2020, H.E. Justice Ali Al Madhani considered the Court’s jurisdictional gateways, and in particular the words “claims and actions” common to them. Highlighting that the English version of the JAL is only a translation of the authoritative Arabic text, Al Madhani J opined that the Arabic words corresponding to “claims and actions” in the English translation had been mistranslated: “A literal translation of this passage would read as follows: “Civil and commercial applications and claims (in the broad sense of “cases” rather than the narrow sense of “claims for remedies”) …” ([210]). Applying this alternative translation to Article 5(A)(1)(b) of the JAL, the judge stated: “in my judgment the scope of Article 5(A) (1)(b) encompasses applications (talabat) and cases (al daawa) which arise from (al nashia an) or relate to (al mutaalliqabi) the types of contracts described in the provision. Whatever the meanings of “arise from” and “relate to”, in my judgment it is applications and cases i.e. proceedings that must arise from or relate to the contracts in question, not claims in the narrow sense of claims for remedies.” Slightly later in the decision, Al Madhani J also noted his opinion that “on my reading of the Arabic text of Article 5(A)(1)(a), (b) and (c), jurisdiction will exist in respect of parties who would be within the ambit of RDC r. 20.7 but are outside of the ambit of the English translation of Article 5(A)(1)(a), (b) and (c), without the need for RDC r. 20.7 read with Article 5(A)(1)(e) to be the source of that jurisdiction. Unless it is said—and I do not think it can be—that, for the purposes of Article 5(A)(1) (a), (b) and (c), “applications” and “cases” must be confined to individual claims to remedies—which would deprive the terms of their meaning—“Civil and commercial applications and cases…” is capable of embracing claims to remedies which would not, if pursued separately, pass through any of the JAL’s jurisdictional gateways and therefore matters and issues which arise from those extra-JAL claims to remedies and the persons required to be party to the proceedings so that the Court can resolve the matters and issues in dispute” ([225]). Al Madhani’s judgment in CFI-032-2020 is yet to be published and his decision on jurisdiction in particular was not appealed. But it is expected that, if the judge’s translation of the Arabic words corresponding to “claims and actions” in the English translation is adopted, it could have wide implications on the scope of the Court’s jurisdiction under the Article 5(A) jurisdictional gateways.

Annual Report 2021

Lahela v Lameez [2020] DIFC CA 007 In the 2017 decision of Pearl Petroleum Company Limited & Others v The Kurdistan Regional Government of Iraq [2017] DIFC ARB 003 (20 August 2017), it was held that, by virtue of Article 5 of UAE Federal Law No. 8 of 2004 (“Article 5”), treaties which form part of the law of the UAE are binding in the DIFC ([19]). The Riyadh Arab Agreement for Judicial Cooperation (the “Riyadh Convention”) is one such treaty. Thus it was held that the Riyadh Convention was binding in the DIFC ([19]). The Riyadh Convention provides rules governing, inter alia, service of proceedings where a claim is commenced in one of the treaty’s member states and the defendant is situated in another. The Riyadh Convention states that all “judicial and non-judicial documents” shall be served on a defendant by his local court, which will have received the relevant documents from the court in which proceedings were issues (“Convention Service”). The Court in Pearl held that Convention Service was mandatory; alternative service could not be granted nor could service be dispensed with where the Riyadh Convention applies ([57]- [59]). On 20 March 2019, the Claimant in Lahela v Lameez was awarded USD 4,622,589.47 in a DIFC-seated arbitration (the “Award”). It subsequently commenced proceedings, ex parte, in the DIFC Courts for recognition and enforcement of the Award. By order dated 10 July 2019 and amended on 23 September 2019 (the “Order”), the Court recognised and, subject to any applications by the Defendant to set aside the Order after being served with it, rendered the Award enforceable. The Defendant is situated in the Republic of Iraq, a party to the Riyadh Convention. The Claimant duly attempted Convention Service. The Defendant’s local court declined to serve the Defendant. The Claimant subsequently sought, ex parte, and obtained an order granting permission to serve by alternative means (the “Service Order”). Upon receipt of the Order, the Defendant applied for the Service Order to be set aside on the basis, inter alia – and relying on Pearl – that Convention Service was mandatory and the Riyadh Convention binding in the DIFC. In a decision dated 2 July 2020, H.E. Justice Shamlan Al Sawalehi dismissed the Defendant’s application, finding that Article 5 did not implement UAE treaties into DIFC law and only placed an obligation on “financial free zones” (defined in Article 2 of the same legislation as having a “body corporate” and being “represented by the President of its board”) from doing “anything [that is, itself] which may lead to contravention of any international agreements to which the State is or shall be a party”. The DIFC Courts were instead bound, the judge held, to apply only the law listed in Article 30 of DIFC Law No. 10 of 2004 which, crucially, did not include UAE treaties. The Defendant appealed. On 9 May 2021, the Court of Appeal handed down its judgment ([2020] DIFC CA 007). The appeal was dismissed. The Court held that “… the reference in Article 5 to the corporate body created by the operation of Article 2 is clearly intended to impose obligations upon that body in relation to the exercise of its executive powers and functions … This approach is also consistent with the nature and operation of international agreements … unless and until a relevant Emirate exercises the legislative powers reserved to it … to issue legislation implementing obligations arising under international agreements to which the UAE is a party as part of the domestic law of the relevant Financial Free Zone, such obligations will not form part of that domestic law – in the same way as treaty obligations do not form part of the domestic law of any State unless and until implemented by the State” ([87] to [89]).

@DIFCCOURTS

DIFCCOURTS

Annual Report 2021

Lakhan v Lamia [2021] DIFC CA 001 The Joint Judicial Committee (the “JJC”), established by Dubai Decree No 19 of 2016 (the “Decree”), decides conflicts of jurisdiction as between the Dubai Court and the DIFC Court. Until April 2021, it was the practice of the DIFC Court to immediately stay proceedings upon a party making an application to the JJC. This practice was informed by the prevailing understanding of the effect of the Decree, and in particular Article 5(1): “The reference of any dispute to the [JJC] shall have the following consequential effects: (1) The claims or applications in respect of which there is a dispute as to jurisdiction shall be stayed pending a decision of the [JJC] in determining the competent Court…” After the JJC had made its decision, the DIFC Court stay would be lifted and the proceedings either continued or discontinued depending on the decision. In October 2020, H.E. Justice Shamlan Sawalehi applied this practice in Lakhan v Lamia upon the Claimant filing an application to the JJC. The Defendant appealed the stay. In short, it argued that the Decree had been misapplied. In his order granting permission to appeal, Sawalehi J stated: “Applications to the JJC are capable of halting proceedings for very long periods of time … and can be made even if there is no genuine dispute as to jurisdiction or if the applicant’s position has no merit whatsoever. If this is what the law requires, so be it. But if the law does not require a stay on DIFC proceedings upon a litigant’s mere application to the JJC, then, in my view, it is time that this practice was abandoned.”

Lancelot & Ors v Leedor & Os [2020] DIFC CFI 060 The Court of Appeal in Lakhan did not decide, however, the question of what would amount to the Dubai and DIFC courts “maintaining” jurisdiction as the issue did not arise in that case. This is an important question as most applications to the JJC are made, not where there are inconsistent judgments or where the courts have both declined jurisdiction, but rather where there are two related cases, with one in each of Dubai’s court. Does a conflict of jurisdiction require conflicting decisions on jurisdiction, or would it suffice that the courts exercised jurisdiction towards determining their respective claims? This question was addressed by Justice Wayne Martin in a judgment handed down on 9 August 2021 in Lancelot & Ors v Leedor & Ors (CFI-0602020). Summarising the principles to be applied by the Court when assessing whether there is a conflict of jurisdiction in a particular case, the judge stated, amongst other things, that: “Whether or not each court has exercised [i.e. “maintained”] jurisdiction … will generally depend upon the facts and circumstances of the particular case … A Court will assess whether there is a conflict of jurisdiction … as a matter of substance rather than form, having regard to the evident objectives of the Decree which are: (i) to minimize the risk of inconsistent or contradictory judgments or decisions; and (ii) to avoid a multiplicity of proceedings with respect to the same dispute.”

The Court of Appeal heard the appeal on 22 March 2021 and handed down its judgment on 8 April (CA-001-2021). The Court ruled that, for a stay to be triggered under the Decree, there must be (i) a conflict in jurisdiction in the form of inconsistent judgments of the Dubai and DIFC courts or where both courts maintain or decline jurisdiction over a claim and (ii) an application made to the JJC to determine the competent court. A mere application to the JJC is not sufficient. Needless to say, applications for stays imposed under the former practice to be lifted abounded after Lakhan.

@DIFCCOURTS

DIFCCOURTS