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Address of Former Chief Justice Sir Anthony Evans at the Middle East Association’s 5th City of London & GCC Countries Conference (19 July 2010)

Address of Former Chief Justice Sir Anthony Evans at the Middle East Association’s 5th City of London & GCC Countries Conference (19 July 2010)

July 19, 2010

1. I am grateful for this opportunity to say something about my recent experiences in Dubai, with particular reference to two of the topics listed for discussion today –

• The role of Economic Courts and arbitration in the GCC
• Improving corporate transparency and modernising insolvency frameworks.


2. I should make it clear that my personal experience is limited to Dubai, although that has included the other Emirates and the UAE itself; and, thanks to generous invitations I have received from Lord Woolf, the President of the Qatar Financial Centre Court, I have learned a little about the QFC.


3. The Dubai International Financial Centre was planned more than ten years ago. Its founders took the view that an independent Court system applying internationally respected rules of law, and operating under procedures familiar to the parties carrying on business there, was essential to its future success; and the model they chose was the Commercial Court here in London.


4. When the DIFC was established by Dubai Laws enacted in 2004, authorised by Federal Law earlier that year, it consisted of three separate bodies: the DIFC Authority, or DIFCA, which was responsible for developing the site and for managing the Centre thereafter; the Dubai Financial Services Authority, the DFSA, the regulatory body; and the DIFC Judicial Authority which consists essentially of the DIFC Courts, of which I was fortunate to be appointed the inaugural Chief Justice in early 2005.


5. The physical development was spectacular, and characteristically speedy. When I first saw the 120-acre site, in February 2004, it was literally ring-fenced, and the only construction on the desert sands was the first few storeys of what is now the imposing entrance building, The Gate, which has become the international symbol of the DIFC. Now there is a business community housing more than 700 registered companies and in excess of 20,000 employees, with more to come as the rest of the project is completed.


6. The DIFC Courts, geographically as well as figuratively, are at the heart of this development. I would like to place it on record that we were given priority by the DIFC with the full backing of the Government of Dubai, including the present Ruler, His Highness Sheikh Mohammed bin Rashid Al Maktoum, who until 2006 was President of the DIFC. So, the Courts Building was completed and in operation by April 2007; a full panel of six overseas and two local judges was appointed by early 2008; Rules of Court were introduced, based on the CPR (Civil Procedure Rules) which govern proceedings in the Commercial Court in London; staff were recruited, and in June 2008Mark Beer became Registrar of the Courts and effectively their CEO.


7. Briefly, the current position is as follows. Judges sit individually in the Court of First Instance and as a panel of three in the Court of Appeal. There is also a Small Claims Tribunal which has heard mainly employment cases. In 2009, 36 cases were started in the CFI, there were 2 Appeals, and 66 cases were heard in the SCT.


8. The most significant feature of these developments, in my view, is that the DIFC Courts apply common law rules and adopt common law procedures. In London, the Commercial Court has moulded the common law into a system of commercial law which is internationally accepted and recognised. It has become a world-wide brand, and it has been further developed by the courts of other States with common law jurisdictions, mostly present and former members of the Commonwealth.


9. We lawyers like to believe that the Commercial Court has contributed to the growth and status of the City of London as an international financial centre over the centuries, and I hope that is true. Now, the DIFC Courts are poised to do the same for the DIFC and in due time for the UAE and for the GCC Region generally. In saying that, I am not suggesting that other Courts, for example those of the QFC, will not be able to make a Regional contribution also. Qatar has done something similar to Dubai, by establishing the QFC and the QFC Courts. Both Courts have the same potential and no doubt the same ambition, which is to serve the business community in the Gulf Region. Neither could reasonably hope to be exclusive of the other.


10. So far, as you will have noticed, I have emphasised that the DIFC Courts apply common law rules and operate under common law procedures. That must distinguish them from the local courts, including in Dubai, the UAE and Qatar, which apply and operate under civil law systems, derived via Egypt from the Code Napoleon and from France. But the DIFC Courts and the Dubai Courts are both national Courts, and it is essential in my view for the future development and well-being of the national law that there is an harmonious working relationship between them. In Dubai, I am happy to say, this relationship has been established, and I pay tribute to the leaders of the Dubai Courts, especially H.E.Dr. Ehned bin Hazeem, who have made this possible. I would rate this as the most significant achievement of the DIFC Courts, to date.


11. May I say at this stage how disappointed I was, listening to the keynote addresses this morning, that there was no reference to what I would regard as the important role which the law plays, or should play, when companies develop business interests in countries where the national laws are not derived from the common law. There are significant differences both in the rules of law which govern the dispute and in the procedures which the Courts operate. I hope we can look forward to the day when the differences are minimised, and the process may be easier where procedural rules are concerned. That is because, I believe, most judges want to achieve a fair and just result, and the difference between common law and civil law rules may have less effect on the outcome of the case. Procedural differences can be equally significant, if not more so, but rules of procedure can usually be changed by judges and by legal authorities, without raising the political issues which substantive law changes might.


12. Whilst talking of disappointment, I would like to refer to another factor which I was surprised not to hear mentioned today. That is the question of language. Language differences, certainly in the courts, can be hugely important in the context of a particular case. I suspect that there is a reluctance to recognise this, because somehow we feel that language may reflect race, racial differences may mean discrimination, which we ought to avoid. So far as the Courts are concerned, I believe that we should recognise that language differences are a fact which we should not ignore. When a specialised contract, say reinsurance, is in the English language, it is absurd for the meaning to be decided on the basis of a translation (or translations, because there is often more than one translation put forward) into, say, Arabic. The same applies in reverse. If the contract is in Arabic, I do not believe that its meaning is best decided by an English speaking court, as the DIFC Courts are. These difficulties will best be avoided, I suggest, by adopting rules of procedure which ensure so far as they can that issues of this sort are decided by the appropriate court.


13. I should say a few words about Arbitration, which in my view forms part of the overall Disputes Resolution Service which should be available wherever business is carried on. In Dubai, arbitration is offered by DIAC, the Dubai International Arbitration Centre, based on the Dubai Chamber of Commerce, and within the DIFC by the DIFC/LCIA Arbitration Centre formed in conjunction with the London Court of International Arbitration. Both Centres, DIAC and DIFC/LCIA, have unlimited jurisdiction; they can administer arbitrations from any part of the world.
14. International commercial arbitration has a vital role to play as economies grow in individual States and in the Region. Historically, the international arbitration community has been keen to emphasize its independence from the Courts and even reluctant to recognise the inevitable links between them. Now, I believe, it is important that it should see itself operating alongside the Courts, both being components of an overall Disputes Resolution Service available to all those who carry on business in the State or Region.

Dubai World Special Tribunal

15. I come last to the Special Tribunal established in December 2009 of which I am the chairman. At that time, it was widely known that Dubai and Dubai World, a government owned company, faced considerable financial difficulties. It was well publicised that certain payments which became due on 14 December 2009 were made, and on time. What was scarcely publicised was that, at the same time, His Highness the Ruler of Dubai issued a Decree No. 57 which contained two separate provisions. First, that the affairs of Dubai World and its subsidiaries would be regulated by a new Insolvency Law, annexed to the Decree, which was largely based on the DIFC Insolvency Law, and therefore on British law, with further provisions derived from the USA. The new Law, therefore, has a secure common law base.


16. Secondly, the Decree appointed a Tribunal which will administer the new Law, if it becomes necessary to do so. I and the other two members were appointed by name, but each of us was a Judge of the DIFC Courts. The administration of the Tribunal is separate from, but again is based on, the Registry of the DIFC Courts. And the Tribunal was given jurisdiction to hear all claims by or against Dubai World companies (this takes account also of a Supplementary Decree issued in May 2010).


17. So the Tribunal has two potential roles. The first is to oversee the new Insolvency Law, if it becomes necessary to do so, specifically if the restructuring talks now under way were to fail; and secondly, to decide claims by or against Dubai World companies which otherwise would have been heard by the Dubai Courts, or possibly by the DIFC Courts. To date, three such cases have been lodged, and the Tribunal has stated that it expects parties to respect arbitration agreements that have been entered into between them. There is the same potential for a Small Claims Tribunal in relation to these Dubai World Claims as has been established in the DIFC Courts.


18. As for the significance of these recent events, you will not be surprised if I ask you to note that in this matter of considerable international importance, His Highness the Ruler of Dubai, and the Government of Dubai, have provided for a common-law based solution to such disputes as may arise. But I would add this. They were able to do so because the DIFC Courts, with their common law judges and common law procedures, and DIFC Law, already existed in Dubai ; and that was due to the foresight of the founders of the DIFC, more than a decade before.

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