‘CONVERTING’ DIFC JUDGMENTS INTO ARBITRAL AWARDS: PRACTICE DIRECTION No. 2 OF 2015 AND ITS CONTROVERSIES

Abstract

This paper examines the DIFC Practice Direction No.2 of 2015, which provides a possibility of judgment conversion into an arbitral award. In certain cases, this mechanism allows a judgment to become the basis of an arbitral award if parties agree to refer a 'judgment payment dispute' to arbitration. As a result, it would be possible to enforce an award rendered in this procedure under the New York Convention. In the beginning, a short overview is given of the organisation of the DIFC Courts and the Arbitration Center, their main features, and the enforcement of the DIFC judgments and arbitral awards abroad. Following is a detailed interpretation of Practice Direction No.2, the suggested arbitration clause and the referral criteria, their evolution, and the drafter's intention hidden in its wording. The last part deals with controversies in the use and the effect of Practice Direction No. 2, especially the negative effect of the elimination of the review of a judgment, the possibility of the arbitral tribunal to rehear the dispute, and the risk of double recovery. Notwithstanding the feasibility of the application of the New York Convention to enforce an arbitral award resulting from the use of the arbitral clause recommended in Practice Direction No. 2, the use of this mechanism would have an eliminating effect on the review of due process and public policy, which would normally be performed in a court exequatur.