As we move towards the last quarter of the year, Jean-François Le Gal and Iris Raynaud look back at the developments and innovations pushed forward by the DIFC Courts during the first half of 2015.

Further innovations to help secure the international enforceability of DIFC Courts' judgments

Adopting a groundbreaking legal mechanism to provide creditors with further avenues for enforcement

In February, a new Practice Direction on the Referral of Judgment Payment Disputes to Arbitration (hereafter "Practice Direction No. 2")1 was introduced, allowing for DIFC Courts judgments to be converted into arbitral awards and thereafter be enforced under the New York Convention.

Under this Practice Direction No. 2, parties which are subject, or have subjected themselves, to the jurisdiction of the DIFC Courts are offered the possibility to refer their final judgments for enforcement through the DIFC-LCIA Arbitration Centre:

"if parties who have submitted (or have agreed to submit) to (or are bound by) the jurisdiction of the DIFC Courts wish further to agree that any dispute arising out of or in connection with the non-payment of any money judgment given by the DIFC Courts may, at the option of the judgment creditor […], be referred to arbitration under the Arbitration Rules of the DIFC-LCIA Arbitration Centre, they may to that end adopt an arbitration clause in the terms of the recommended arbitration agreement set out below by reference to the Referral Criteria as defined" (emphasis added).

The terms suggested by Practice Direction No. 2 (as amended in May 2015) are as follows:

"Any Judgment Payment Dispute (as defined in DIFC Courts Practice Direction No 2 of 2015) that satisfies all of the Referral Criteria set out in the Practice Direction may be referred to arbitration by the judgment creditor, and such dispute shall be finally resolved by arbitration under the Arbitration Rules of the DIFC-LCIA Arbitration Centre, which Rules are deemed to be incorporated by reference into this clause. There shall be a single arbitrator to be appointed by the LCIA Court pursuant to Article 5.4 of the DIFC-LCIA Arbitration Rules. The seat, or legal place of arbitration, shall be the Dubai International Financial Centre. The language to be used in the arbitration shall be English.

This agreement for submission to arbitration shall in all respects including (but not limited to) its existence, validity, interpretation, performance, discharge and applicable remedies be governed by and construed in accordance with the laws of the Dubai International Financial Centre."

The proposed referral to arbitration is not aimed at giving rise to an award on the merits, but rather to address the issue of non-compliance with the DIFC Courts judgment, and to allow for wider international enforcement of the said judgment by effectively converting it into an arbitral award.

As of today, recognition and enforcement of the DIFC Courts' judgements is facilitated, in the Gulf Cooperation Council countries, by the Gulf Cooperation Council Convention2 and, in the wider MENA region, by the Riyadh Convention3. Outside the MENA region, recognition and enforcement of DIFC Courts’ decisions has been facilitated on a bilateral basis by way of treaties with countries including France4, India5 and China6. But, in the absence of any treaty, enforcement of DIFC Courts judgments may prove to be difficult across the globe.

Arbitration awards on their part are well known for being, through the mechanism of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, easily enforceable in an extended number of more than 150 countries.

The possibility offered by Practice Direction No. 2 to seek a subsequent arbitration award is thus clearly designed to offer successful parties an additional option for securing enforcement of their DIFC Courts judgments.

The use of referral proceedings does not affect the creditor's ability to enforce a DIFC Courts judgment through the previously available channels (e.g. via execution proceedings in the DIFC or via the Protocol of Enforcement in force with the onshore Dubai Courts)7.

This enhanced enforceability is also expected to work as an incentive for parties to reach settlement at an early stage in the dispute resolution process. As a matter of fact, the possibility to enforce the monetary relief of a DIFC Courts judgment almost anywhere in the world should provide greater leverage to successful parties against their defaulting opponents.

This is said to be the first time such a mechanism has been introduced anywhere in the world. It may serve as a model for other courts around the world to follow.

The Referral Criteria

To benefit from the application of Practice Direction No. 2, the successful party would have to demonstrate that the judgment for which referral to arbitration is requested:

(i) is a money judgment (not issued in respect of an employment or a consumer contract for which arbitration is precluded as per Article 12(2) of the 2008 Arbitration Law);

(ii) is final (i.e. not subject to appeal or the period to apply for permission to appeal has expired);

(iii) has already taken immediate effect in accordance with Rule 36.30 of the DIFC Court Rules8;

(iv) has resulted in a dispute on the payment ordered by the judgment (i.e. the losing party refuses to pay); and that,

(v) is one in relation to which both parties have agreed in writing on the application of Practice Direction No. 2 of 2015.

While it remains to be seen whether this innovative tool will be used widely by contracting parties, it appears on the face of it that this innovative mechanism is designed to expedite enforcement and thus greatly benefit parties’ commercial interests. It is yet another example of the DIFC Courts' vision to further distinguish themselves from other jurisdictions.

Expanding the list of cooperation agreements with leading jurisdictions throughout the world

In March 2015, the DIFC Courts entered into a cooperation agreement with the United States District Court for the Southern District of New York (hereafter the "SDNY"), one of the most important commercial courts in the world which holds jurisdiction over New York's financial centers including Wall Street.

The purpose of this cooperation agreement, or Memorandum of Guidance (hereafter the "MoG"), is to provide further certainty to businesses operating in both jurisdictions by setting out clear procedures between the two courts for the mutual recognition and enforcement of money judgments.

The MoG comes after several other enforcement memoranda signed over the past years by the DIFC Courts with leading international jurisdictions, including the Commercial Court of England & Wales9, the Supreme Court of Singapore10, the Federal Court of Australia11, the New South Wales Supreme Court12, and the High Court of Kenya (Commercial and Admiralty Division)13.

Though the MoG has no binding legal effect14, it seeks to provide a clear understanding of the respective positions of the DIFC Courts and the SDNY on recognition and enforcement. For example, Article 23 of the MoG provides that the DIFC Courts will not re-examine the merits of a New York judgment: the judgment may not be challenged on the grounds that it contains an error of fact or law. Articles 24 and 25 set out the three possible procedural routes that a creditor may follow to pursue the enforcement of a DIFC judgment before the SDNY.

A few weeks ago, at the end of August 2015, the DIFC Courts entered into a similar Memorandum with the Supreme Court of the Republic of Kazakhstan15.

Memorandum with the UAE Ministry of Justice

In May 2015, the DIFC Courts also signed a memorandum with the UAE Ministry of Justice setting out clear procedures and timelines in instances where DIFC Courts judgments involving assets held outside of the country need to be enforced through the Ministry of Justice, as is required under certain treaties between the UAE and other countries. It also clarifies the procedures for the service of DIFC Courts documents through official channels, which is another requirement under some of the treaties16.

Further developments towards a wider jurisdiction of the DIFC Courts

The DIFC Courts' jurisdiction was opened to businesses worldwide in October 2011.

In a landmark opinion issued recently17, the Supreme Legislation Committee (hereafter the “SLC”)18 expressed the view that the reference in Article 83 of Law No. (6) of 1997 on Contracts of Government Departments to "Dubai Courts" in providing that "the Dubai Courts shall have the jurisdiction to hear any dispute that arises between a government entity and a customer…" is not limited to the Dubai Courts, but rather encompasses all the courts and judicial committees formed in Dubai under the Emirate's legislation, regardless of their jurisdiction.

The SLC notably highlighted that (i) the DIFC Courts are considered to be an integral part of Dubai's court system; (ii) the scope of its jurisdiction now includes any civil or commercial dispute where the involved parties agree in a clear and express manner that the DIFC Courts shall hear the case19; and (iii) the expression "Dubai Courts" refers to all courts of law established in the Emirate of Dubai, including the DIFC Courts. It then reached the conclusion that the DIFC Courts have jurisdiction to hear and determine any claim, civil or commercial lawsuit where a government entity has agreed to resort to the DIFC Courts and the measures and procedures to be following when filing lawsuits against the Government, as set forth by Law No. 3 of 1996 on Government Claims and its amendments, are taken into account.


All these innovations already demonstrate that 2015 is no exception to the DIFC Courts' ambitions and successful strategy towards becoming one of the world's leading dispute resolution venues.

One can only wonder what is next.


1 Practice Direction No. 2 of 2015 dated 16 February 2015 as amended on 27 May 2015 - Referral of Judgment Payment Disputes to Arbitration available on the DIFC Courts' website: 
2 The 1987 Gulf Cooperation Council (GCC) Convention for the Execution of Judgments, Delegations and Judicial Notifications (ratified in 1996)
3 The 1983 Riyadh Convention on Judicial Cooperation between States of the Arab League (ratified in 1999)
4 The Convention on Judicial Assistance, Recognition and Enforcement of Judgments in Civil and Commercial matters between the United Arab Emirates and France (1992)
5 The Agreement on Judicial Cooperation in Civil and Commercial Matters between the United Arab Emirates and India (2000)
6 The Convention on Judicial Assistance in Civil and Commercial Matters between the United Arab Emirates and the Popular Republic of China (PRC) (2004)
7 An express provision has been added in May 2015 to the suggested arbitration clause set forth in Practice Direction No. 2 which states that the option to litigate is not precluded by the entitlement to commence arbitration
8 Rule 36.30 of the DIFC Courts Rules provides: "a judgment or order takes immediate effect from the time on the day when it is given or made, or such later time or date as the Court may specify"
9 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen's Bench Division, England and Wales, January 2013
10 Memorandum of Guidance - Enforcement between DIFC Courts and the Supreme Court of Singapore, January 2015
11 Memorandum of Guidance between the Federal Court of Australia and DIFC Courts, March 2014
12 Memorandum of Understanding between Supreme Court of New South Wales and DIFC Courts, September 2013
13 Memorandum of Guidance between the Dubai International Financial Courts and the High Court of Kenya, Commercial & Admiralty Division, November 2014
14 Article 2 of the MoG
15 Memorandum of Guidance as to Enforcement between Supreme Court of the Republic of Kazakhstan & DIFC Courts, 28 August 2015
16 See DIFC Courts' Press Release issued on 5 May 2015: "DIFC Courts and Ministry of Justice sharpen international enforcement process"
17 Further information is available on the DIFC Courts' website:
18 Established by Decree No. (23) of 2014, the Supreme Legislation Committee's missions include: "issue and publish reasoned legal opinions with respect to interpretation of the provisions of the legislation in force in the Emirate", as well as "submit proposals and recommendations with respect to the amendments and updates that must be made, from time to time, to the legislation in force in the Emirate"; see
19 Article 5(A)(2) of the Law No. 12 of 2004, as amended