IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
PRACTICE DIRECTION NO. 1 OF 2017
Indemnity Costs for Failed Challenges to Arbitral Awards in the DIFC Courts
This Practice Direction will come into effect on the date of signature. It may be cited as Practice Direction 1 of 2017 – Indemnity Costs for Failed Challenges to Arbitral Awards in the DIFC Courts – and may be abbreviated to PD 1/2017.
Dated this 27 day of February 2017
Chief Justice of the DIFC Courts
 See Article VI of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”), which provides as follows: “If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security,” reiterated in Article 44(2) of the DIFC Arbitration Law (DIFC Law No. 1 of 2008).
 See by way of example the decision of the Hong Kong Court of First Instance in Peter Cheung & Co v. Perfect Direct Limited & Yu Guolin (HCMP 2493/2012) and New Heaven Investments Limited & Rondo Development Limited v. Yu Guolin (HCA 115/2013), judgment of 25 April 2016, where costs were awarded on the indemnity basis where a party had engaged in “unmeritorious” behaviour in attempting to delay the enforcement of an arbitral award; Exfin Shipping (India) Ltd Mumbai v Tolani Shipping Co Ltd Mumbai,  EWHC (Comm): 17 May 2006, where indemnity costs were awarded by the English Commercial Court following a “wholly unmeritorious” application to set aside an arbitral award; and DigiTelCom Ltd. v. Tele2 Sverige AB (1:12-cv-03082), 16 November 2012, where the District Court for the Southern District of New York imposed costs sanctions on a party for making a “frivolous” application to vacate an arbitral award.
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