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DIFC Courts in your contracts

DIFC Courts in your contracts

April 1, 2014

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SUMMARY

Since November 2011, the DIFC Courts can hear commercial disputes between any parties which have written the DIFC Courts into their mutual contracts, or which jointly agree to use the DIFC Courts post-dispute. Suggested clauses are shown below.

THE PROCESS

The expansion of the DIFC Courts’ jurisdiction came about through the issuance of Dubai Law No. 16 of 2011 in November (see http://www.difc.ae/legal-database, whereby any parties outside the Dubai International Financial Centre (DIFC) can now opt to use the DIFC Courts to hear their disputes. Parties can enter the DIFC Courts into their contracts at the signature stage (i.e. before any potential dispute arises), exclusively or non-exclusively. Alternatively, they can jointly agree in writing to refer a dispute to the DIFC Courts after such a dispute has arisen.

Suggested Contract Clauses

Suggested clauses provided below will prima facie be accepted by the Courts. They are also available in Practice Direction No. 2/2012 on the DIFC Courts’ Jurisdiction

A) Exclusive Jurisdiction of the DIFC Courts Before a Dispute Arises

“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be subject to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre.

This contract shall be governed by and construed in accordance with the law of [INSERT PLACE]

B) Non-Exclusive Jurisdiction of the DIFC Courts Before a Dispute Arises

“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be subject to the non-exclusive jurisdiction of the Courts of the Dubai International Financial Centre.

Each party irrevocably submits to the jurisdiction of the DIFC Courts and waives any objection it may have to disputes arising out of or in connection with this contract being heard in the Courts of Dubai International Financial Centre on the grounds that it is an inconvenient forum (forum non conveniens).

This contract shall be governed by and construed in accordance with the law of [INSERT PLACE]

C) Exclusive Jurisdiction After a Dispute Arises /Over Existing Disputes “A dispute having arisen between the parties concerning [DEFINE DISPUTE], the parties hereby agree that the dispute shall be subject to the exclusive jurisdiction of the DIFC Courts.

The governing law of this agreement shall be the law of [INSERT PLACE]

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