Dubai, United Arab Emirates, 25 February 2015: The Dubai International Financial Centre Courts (DIFC Courts), Dubai’s established English-language, commercial common law judicial system, today began the next phase of collaboration with the DIFC-LCIA Arbitration Centre with the introduction of a new Practice Direction that will allow for greater international enforcement of judgments and, potentially, increase the speed of settling disputes.
Commenting on the new developments, Tim Taylor QC said: “This is another example of how DIFC Courts are breaking new ground when it comes to legal innovation. Dubai is now recognised as a global centre of excellence for commercial dispute resolution and arbitration. These enhancements will further promote the region to international business and underline the message that the DIFC has one of the world’s leading commercial courts.”
The DIFC-LCIA Arbitration Centre is a strategic partnership between the Dubai International Financial Centre and the London Court of International Arbitration, one of the longest-established international institutions for commercial dispute resolution.
Following the completion of a two month-long public consultation, parties which are subject (or have subjected themselves) to the jurisdiction of the DIFC Courts can also choose to refer their final judgments for enforcement through the DIFC-LCIA Arbitration Centre. The innovative Practice Direction, the first of its kind globally, offers parties the advantages of both litigation and arbitration since it allows the DIFC-LCIA Arbitration Centre to provide an additional remedy to the judgment creditor if the parties choose to submit any disputes they may have about the payment of money judgments issued by DIFC Courts to arbitration under the auspices of the DIFC-LCIA Arbitration Centre. This would mean that a DIFC Courts judgment could eventually result in the judgment creditor obtaining an arbitral award for the unpaid portion of the money judgment and that award could be enforced in the 150 plus countries which have acceded to the New York Convention providing greater enforcement internationally.
The DIFC Courts Chief Justice Michael Hwang said: “The response from the UAE legal community to the new mechanism has been encouraging and there is broad recognition that it will be an effective tool to synthesise litigation and arbitration. This is the first time this mechanism has been introduced anywhere in the world and it is another example of the UAE taking a lead in the resolution of commercial disputes. It also represents a major step in the partnership between the DIFC Courts and the DIFC-LCIA ArbitrationCentre. If successful, in time this mechanism may serve as a model for other courts around the world to follow.”
In addition to enriching the enforceability of DIFC Courts’ decisions, the mechanism is also designed to increase the settlement of disputes. If parties know that a court order can be enforced almost anywhere in the world, they may be incentivised to reach a settlement earlier in the dispute resolution process.
Since their jurisdiction was opened to businesses worldwide in October 2011, The DIFC Courts judgments can be enforced internationally through treaties such as the GCC Protocol and Riyadh Convention; treaties with China, France; and reciprocal arrangements with many common law courts overseas, including the Commercial Court of England and Wales, Federal Court of Australia, the New South Wales Supreme Court, the High Court of Kenya (Commercial and Admiralty Division) and the Supreme Court of Singapore.
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