The ability of creditors to enforce foreign arbitration awards against Dubai-based debtors has suffered a potential blow, following a decision by the Judicial Tribunal for the Dubai Courts and DIFC Courts that has given precedence to UAE-based courts.
The tribunal has blocked the DIFC’s courts from recognising and enforcing a London-based arbitration decision, giving precedence to an action being conducted in parallel in a dispute resolution centre of the Dubai Courts.
Following the country’s signature of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Convention) in 2006, UAE courts are obliged to automatically recognise and enforce international arbitration awards without re-examining the merits of the individual awards.
The DIFC Courts has emerged in recent years as a favoured "conduit jurisdiction" for the enforcement of arbitral awards, the process seen as more efficient than going through onshore courts.
The Judicial Tribunal is understood to have effectively blocked the DIFC Courts from entertaining a case pertaining to a London-based arbitration award, because the debtor had filed a case with the Dubai Courts-affiliated Centre for Amicable Settlement of Disputes.
In a decision entitled Cassation No. 1 of 2017 handed down after a hearing on May 22, the tribunal ruled the centre is "an integrated part of the Dubai Courts", and that the Dubai Courts are "therefore the competent courts to entertain this case".
The names of the parties were not disclosed in the tribunal’s decision, nor was the size or date of the original arbitration award.
"Cassation No. 1 of 2017 (JT) … marks a significant watershed for the DIFC’s conduit jurisdiction, insofar as the Judicial Tribunal appears to have ruled against a party enforcing under the New York Convention," said Craig Shepherd, a Dubai-based partner with Herbert Smith Freehills in a briefing note.
"In light of this decision, even where the award was issued overseas and enforced in the DIFC under the New York Convention, there appears to be a risk that the Judicial Tribunal will order the DIFC Courts to cease from entertaining the case."
The Judicial Tribunal’s decision comes three months after it dismissed an attempt to stop the enforcement of a London-seated arbitration, namely Marine Logistics Solutions and other vs Wadi Woraya, in the DIFC Courts, noting at the time that there were no parallel proceedings in the Dubai Courts.
Earlier this year, the tribunal ordered that the DIFC Courts drop a case between Oger and Daman Real Estate Capital Partners, pertaining to recognition and enforcement of a Dh965 million arbitration award made by the onshore Dubai International Arbitration Centre in favour of Oger.
The tribunal insisted the case be remitted for trial in the Dubai Courts, and that the DIFC Courts should "cease from entertaining the case".
The Judicial Tribunal was established a year ago by Decree 19 of 2016, to rule on conflicts of jurisdiction and conflicts of judgment between the two courts.
The seven-member tribunal consists of the head of the Dubai Court of Cassation, who sits as chairman, with three judges from each of the two courts.
jeverington@thenational.ae
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
How to volunteer
The UAE volunteers campaign can be reached at www.volunteers.ae , or by calling 800-VOLAE (80086523), or emailing info@volunteers.ae.
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Cricket World Cup League 2
UAE results
Lost to Oman by eight runs
Beat Namibia by three wickets
Lost to Oman by 12 runs
Beat Namibia by 43 runs
UAE fixtures
Free admission. All fixtures broadcast live on icc.tv
Tuesday March 15, v PNG at Sharjah Cricket Stadium
Friday March 18, v Nepal at Dubai International Stadium
Saturday March 19, v PNG at Dubai International Stadium
Monday March 21, v Nepal at Dubai International Stadium
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
