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SLC Legal Opinion on Dubai Government Entities Opting in to DIFC Courts Jurisdiction

SLC Legal Opinion on Dubai Government Entities Opting in to DIFC Courts Jurisdiction

September 21, 2015

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LEGAL OPINION MEMO

 

Requesting party The Dubai International Financial Centre (DIFC)
The case about which a legal opinion is requested The jurisdiction of the DIFC Courts with respect to hearing the lawsuits where a Dubai Government entity is party.

 

1. Facts
H.E. Essa Kazim, DIFC Governor, is asking the General Secretary of the Supreme Legislation Committee of the Emirate of Dubai, according to a letter dated 4 June 2015, for the legal opinion about the scope of the DIFC court’s jurisdiction in terms of hearing and determining civil and commercial claims and lawsuits filed at the DIFC Courts, if all parties agree and one of the involved parties is a Dubai Government entity. Moreover, the letter asked whether this jurisdiction contradicts Article (83) of Law No. (6) of 1997 on Contracts of Government Departments in Dubai and its amendments.

 

2. Legal Grounds
Following the review of the legal texts related to the above-mentioned request, it became clear that:

·         Paragraph (D) of Article (3) in Law No. (3) of 1996 on Government Claims and its amendments states: “Lawsuits against the Government are filed against the Public Prosecutor who will be the defendant in his/ her capacity as the Government’s representative, taking into consideration the following procedures: 1- Whoever seeks to file a lawsuit must submit the full details of his/ her claims in writing to the office of the Dubai Government’s Legal Counsel. 2- Within one week of the submission, the Legal Counsel refers the claim to the concerned entity for careful study. The concerned government entity must reply within fifteen days of receiving the referral letter. If two months have passed following claim submission at the Legal Counsel’s office without settling the dispute amicably, the plaintiff can resort to the competent court.”

·         Article (9) in Law No. (32) of 2008 on  Establishing the Government of Dubai Legal Affairs Department states: “The duties and powers of the Public Prosecutor, in his capacity as the representative of the Government and other Government Entities in claims filed by or against them in accordance with Law No. (3) of 1996 Concerning Government Claims and its amendments.”

·         Paragraph (1) of Article (3) in Law No. (12) of 2004 concerning the Dubai International Financial Centre Courts and its amendments state: “1- The Courts of the Centre are hereby established and shall carry out their functions in an independent manner, in accordance with the provisions of this Law and the provisions of the other Centre’s Laws and Regulations. The Courts shall be of two ranks; The Court of First Instance and the Court of Appeal.” Paragraph (5) of the same Article states: “5- Judgments of the Courts shall be issued in the name of the Ruler.”

·         Paragraph (a) of Clause (1) in Article (5) of the same Law states: “1- The Court of First Instance shall have exclusive jurisdiction to hear and determine: (a) Civil or commercial claims and actions to which the DIFC or any DIFC Body, DIFC Establishment or Licensed DIFC Establishment is a party.”

·         Clause (2) in Article (5) of the same Law states: “2- The Court of First Instance may hear and determine any civil or commercial claims or actions where the parties agree in writing to file such claim or action with it whether before or after the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions.

·         Clause (2) in Article (7) of the same Law states: “2- Where the subject matter of execution is situated outside the DIFC, the judgments, decisions and orders rendered by the Courts and the Arbitral Awards ratified by the Courts shall be executed by the competent entity having jurisdiction outside DIFC in accordance with the procedure and rules adopted by such entities in this regard, as well as with any agreements or memoranda of understanding between the Courts and these entities. Such execution shall be subject to the following conditions:  (a) The judgment, decision, order or ratified Arbitral Award to be executed is final and executory; (b) The judgment, decision, order or ratified Arbitral Award is translated into the official language of the entity through which execution is carried out; (c) The Courts affix the executory formula on the judgment, decision, order or ratified Arbitral Award.”

·         Clause (3) in Article (7) of the same Law states: “In addition to Paragraphs (a), (b) and (c) of Clause (2) of this Article, when executing the judgments, decisions and orders issued by the Courts or Arbitral Awards ratified by the Courts through Dubai Courts, the following must be observed: (a) the Courts shall issue an execution letter to the Chief Justice of the Court of First Instance of Dubai Courts stating the procedure to be carried out; (b) the person requesting execution shall submit to the execution judge of Dubai Courts an application accompanied by a copy of the judgment, decision or order, legal translation of the same, and the execution letter; (c) the execution judge of Dubai Courts shall apply the execution procedure and rules stipulated in the aforementioned Federal Civil Procedure Code, including any objections to the execution; the execution judge may not reconsider the merits of the judgment, decision or order; (d) Dubai Courts shall collect the execution fees for each execution request submitted to them in accordance with the aforementioned Dubai Courts Fees Law.”

·         Article (83) of Law No. (6) of 1997 on Contracts of Government Departments in Dubai and its amendments states: “Taking into account the instructions issued on 2/ 7/ 1992 regarding government lawsuits, Dubai courts shall have the jurisdiction to hear any dispute that arises between a government entity and a customers with respect to the signed contracts according to the provisions of this Law.”

 

3. Legal Opinion
By applying the above-mentioned legal texts on the context of the request, it became clear that:

·         The DIFC Courts, established under Law No. (12) of 2004, is an independent, domestic judicial authority in the Emirate of Dubai and is an integral part of the Emirate’s judicial system. The DIFC Courts has the jurisdiction to hear and determine the civil and commercial cases explained by the above-mentioned establishment Law. The judgments issued by the DIFC Courts are considered domestic and issued in the name of His Highness the Ruler of Dubai. Inside the Emirate, these judgments are enforceable directly by the competent authority within Dubai Courts without the need for issuing enforcement orders by the Ruler or looking into the judgment’s topic as is the case with foreign judgments.

·         The scope of jurisdiction of the DIFC Courts includes the lawsuits and claims in which any of the DIFC’s entities, bodies or licensed establishments is party, as well as the civil and commercial claims when filed at the DIFC Courts upon the written agreement of all involved parties whether after or before the dispute arises, provided that such agreement is made pursuant to specific, clear and express provisions even if these claims and lawsuits are neither related to the DIFC nor to an event or a transaction that has taken place in it or stemmed from a contract that has been signed or implemented in whole or in part in the DIFC.

·         The expression “Dubai courts” in Article (83) of the above-mentioned Law No. (6) of 1997 is not limited to the Dubai Courts, established under Law No. (3) of 1992 and its amendments; rather, it encompasses all the courts and judicial committees formed in Dubai under the Emirate’s effective legislations, regardless of their jurisdictions or headquarters. The above-mentioned Article (83) intends to establish the qualitative and spatial jurisdiction of Dubai’s courts with respect to hearing disputes related to government entities’ contracts and avoid subjecting disputes to courts that do not exist in the Emirate.

·         The legislator of Law No. (3) of 1996 on Government Claims and its amendments has clearly identified the procedures to be followed when filing lawsuits against the government, in an effort to maintain Dubai’s public good. The disputes emerging between Dubai Government entities and other parties are first presented to Dubai Government’s Legal Affairs Department with the aim of settling the dispute amicably within two months of the referral date. If this amount of time passes without amicable settlement, the plaintiff has the right to turn to the competent court in this regard.

In light of the above, since the DIFC Courts is an institution that is considered an integral part to Dubai’s court system; and since the scope of its jurisdiction includes any civil or commercial dispute where the involved parties agree in a clear, express manner that the DIFC Courts will hear the case; and since all lawsuits involving government entities are subject to specific measures that must be taken into consideration in advance by the plaintiffs; and since the expression “Dubai courts” refers to all courts of law established in the Emirate of Dubai including the DIFC Courts, the DIFC Courts has the jurisdiction to hear and determine any claim, civil or commercial lawsuit where a government entity is a party, as long as the concerned government entity has agreed to resort to the DIFC Courts and that the measures and procedures stipulated by Law No. (3) of 1996 on Government Claims and its amendments are taken into account, even if the subject of the dispute ensues Law No. (6) of 1997 on Contracts of Government Departments in Dubai and its amendments.

 

Approval of the Secretary-General of the Supreme Legislation Committee in the Emirate of Dubai
Signature (signature) Date 30/ 6/ 2015