Dubai International Financial Centre Research Articles

Methodology for the Study of the Principles of Establishing Territorial Jurisdiction and Mechanisms for Resolving Digital Disputes by the Courts of the International Financial Center of Dubai

The article attempts to analyse the principles of es-tablishing territorial jurisdiction when resolving disputes in the courts of Dubai International Financial Centre (DIFC) in the United Arab Emirates. In the context of globalization scientists and practitioners face the question of selecting appropriate and effective methods to cognize jurisdiction, the application of regulatory methods and mechanisms to resolve digital disputes in international practice. Attention is drawn to the need to develop theoretical approaches to establish the nature of relations arising from digital disputes and to determine the liability of parties in relation to the subject matter of a digital dispute, as well as in relation to technologies controlled by artificial intelligence and robotics.

Developments in the United Arab Emirates impacting family offices and family wealth structures

Abstract This article examines the United Arab Emirate’s (UAE) evolving legislative landscape for family offices and family wealth structures, focusing on the 2022 UAE Family Business Law and the 2023 Dubai International Financial Centre Family Arrangements Regulations and their implications for the management and succession of family businesses, as well as the regulation of family offices in various financial free zones.

Building better foundations: the Dubai International Financial Centre foundation law consultation

Abstract The current proposed amendments to the Dubai International Financial Centre (DIFC) Foundations Law No 3 of 2018 (consolidated version of 2022) (“Foundations Law”) come at an opportune time and are testament to the wider progressive measures taken by the DIFC legislator, and to the growing popularity of foundations. The DIFC consultation paper introduces specific amendments to enhance this legislation. If implemented, the amended law will help meet the needs of the ever-growing private client base that increasingly uses foundations as a preferred structuring and succession-planning option. This article focuses on the key tenets of the DIFC consultation paper’s proposed amendments to the Foundation Law.

Anti-suit Injunctions at Crossroads: Navigating Unique Jurisdictions

Anti-suit injunctions are typically treated differently in common law and civil law jurisdictions. While common law jurisdictions may favour anti-suit injunctions as enforcing the parties’ agreement to arbitrate, civil law jurisdictions are generally concerned that anti-suit injunctions risk interfering with the jurisdiction of foreign court proceedings. The United Arab Emirates (UAE), where common law and civil law jurisdictions intersect, presents a unique example. The on-shore UAE courts apply civil law while the off-shore Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) Courts apply common law, bringing a new dynamic to the availability and enforcement of anti-suit injunctions. The interaction of these courts and the fine balance achieved has resulted in remarkable developments in the UAE. However, both in the UAE and further afield, certain challenging issues such as interim anti-suit injunctions, interim measures filed in parallel court proceedings, and anti-suit injunctions against third parties related to the dispute serve to test this balance. Nevertheless, with new developments in the region, a positive attitude appears to have emerged on the availability of anti-suit injunctions, opening it up to potential advancements as the jurisprudence continues to evolve. anti-suit injunctions, arbitration, foreign court proceedings, UAE, arbitration agreement, enforcement

Dubai International Financial Centre’s Updated Data Protection Law, Part 2: Implementing a modern, global law in a UAE financial free zone

The Dubai International Financial Centre (DIFC), purveyor of Data Protection Law, DIFC Law No. 5 of 2020, is the result of a legislative overhaul aimed at creating an environment of ethical data management. The Updated DP Law combines international data protection standards of the General Data Protection Regulation (GDPR), the UK Data Protection Act 2018, the California Consumer Privacy Act and others with innovative, new concepts that work for the DIFC’s FinTech/X-tech incubator. Ultimately, the goal is to obtain adequacy recognition by the European Commission. This paper is Part 2 in a series that tells us how such a law was created and how a small jurisdiction in the United Arab Emirates is making big strides in data protection.

International commercial courts as new actors in adjudication business: Collaborators or competitors?

International commercial courts are a relatively new phenomenon that changes the configuration of the international adjudication business. As novel players on the dispute resolution scene, these courts challenge the notion of competition between the existing actors in the business. From the perspective of arbitration, international commercial courts tend to be perceived as both collaborators and competitors. Furthermore, various driving forces influenced the creation of these courts, which gave them a hybrid structure and a quite unique institutional appearance. This article examines three prominent courts in three different parts of the world: the Dubai International Financial Centre Courts (DIFCC), the Singapore International Commercial Court (SICC) and the Netherlands Commercial Court (NCC). The aim is to identify the main features of these adjudication actors that operate within three highly commercially relevant geographic regions in order to outline their character and role on the adjudication business stage. Eventually, through these examples this article addresses the puzzling question of competition versus cooperation in contrast to arbitration. Nevertheless, it is still hard to give a definitive answer - it seems too early for a firm prediction regarding the future of these projects. Jurisprudence must be developed in order to comprehensively test the success of international commercial courts

The legal legitimacy of the China International Commercial Court: history, geopolitics, and law

ABSTRACT The academic contribution to the question of reforms to the China International Commercial Court (CICC) has essentially been based on classic comparative legal approaches. More precisely, two main schools of thought have emerged which compare the CICC with the international commercial courts established by Singapore (the Singapore International Commercial Court [SICC]) and Dubai (the Dubai International Financial Centre [DIFC]) because Chinese officials have presented these institutions as models for the CICC. This article breaks new ground by adopting a legal and geopolitical analysis. The article makes an interdisciplinary enquiry, which combines political-economy and sociological analysis. The political-economy approach emphasizes an institutional reform in line with China’s self-interested response to the commercial needs of Chinese investors along the Belt and Road Initiative. The sociological approach refers to China’s history and culture, appreciates China’s contemporary policies, and suggests that reform on mediation and arbitration under the CICC are likely to play the most prominent role at the new court. This article highlights the fundamental contradiction between geopolitics and judicial independence within the realm of the CICC, and argues that if the designers of the CICC treat SICC and DIFC courts’ procedural rules as templates for replication, any reform attempts are likely to fail, given that the CICC forms part of China’s geopolitical tactics rather than being a product of market orientation. Instead, this article argues that the CICC should be understood as a mechanism for domestic reform purpose and function.

UAE private foundations—an overview

Abstract Most Middle Eastern entrepreneurial families are familiar with foreign offshore trusts and foundations and have been using these tools to ensure wealth preservation and inter-generational continuity for several generations. In that context, the United Arab Emirates (UAE) now counts three foundation regimes (in the Abu Dhabi Global Market, the Dubai International Financial Centre and the Ras Al Khaimah International Corporate Centre) and provides a local solution to wealth management and preservation, family succession planning, corporate structuring and asset protection. The purpose of this article is to present the context, mechanisms and interests in relation to UAE private foundations.

Presenting a legal and regulatory analysis of the United Arab Emirates’ past, present and future legislation on combating money laundering (ML) and terrorist financing (TF)

PurposeThis paper aims to study the three levels of anti-money laundering (AML) and combating of terrorist financing (CTF) regulations that apply to banks and financial institutions listed within the country. The paper aims to determine risks arising from globalised financial centres within the United Arab Emirates (UAE) and potential improvements deficiencies that may otherwise serve as conduits for criminal and terrorist organisations. There is a significant body of literature that covers the advance of AML/CTF legislation in the Dubai-based free trade zone, the Dubai International Financial Centre (DIFC). Though free trade zones are scattered across the UAE, the DIFC has the highest foreign investment in the country with an expanded international network.Design/methodology/approachThe UAE has made progress as part of its fight against money laundering (ML) and terrorist financing (TF). This paper studies the legislative stance by analysing the country’s AML/CTF laws. Also, the advances of global financial centres in the UAE have created layers of regulation, each regulator with their own set of rules. This paper attempts to study the regulations and the level of their enforcement to combat ML and TF.FindingsThis paper finds significant regulatory oversight in certain frameworks set within the UAE’s financial system. However, the paper finds secondary literature and evaluations conducted by international bodies that suggest some deficiencies within the mechanisms, that are being resolved by the country’s regulatory agencies. The UAE’s advancing network of financial institutions has created a global chain of monetary transfers, which offers some possibility of ML also extending to TF. Though the country has made progress, there remain a few flaws that can be exploited by criminal and terrorist organisations.Practical implicationsML has the possibility to damage markets if allowed in excess. This is not the case with the UAE, and large unverified transactions are investigated by the regular authorities. ML is now a matter of concern when funds acquired through illegal means may be used to directly finance terrorism.Originality/valueThis paper tests the UAE’s mechanisms to combat ML and TF in the context of the country’s advancing of a global central financial market. There is a need to understand these regulations as investors within the UAE and abroad may sometimes face risk if ML/TF deficiencies are exploited by criminal and terrorist organisations. This paper provides an insight into the country’s infrastructure to combat ML and TF and also weighs its performance as per international standards and guidelines.

Free Zone Arbitration in the United Arab Emirates: DIFC v. ADGM (Part II)

This is Part II of a two-part article that deals with the phenomenon of free zone arbitration in the United Arab Emirates. Part I, which was published in the last issue of this journal, discussed in some detail the concept and practice of free zone arbitration in the Dubai International Financial Centre (DIFC). This Part II discusses free zone arbitration in the more recently established Abu Dhabi Global Market (ADGM) and highlights the main differences between the two. In doing so, Part II will take a closer look at the judicial and legislative framework of the ADGM, including in particular the main provisions and the operation of the 2015 ADGM Arbitration Regulations, the institutional framework of arbitration in the ADGM, the curial function of the ADGM Courts in ADGM-seated arbitrations and the recognition and enforcement of domestic (non-)ADGM and foreign arbitral awards in the ADGM. Part II also explores to what extent the ADGM Courts are envisaged to serve as a host or conduit jurisdiction in the terms proposed and practiced by their DIFC counterparts.

Free Zone Arbitration in the United Arab Emirates: DIFC v. ADGM: (Part I)

This article is published in two parts and discusses the concept and practice of free zone arbitration in the United Arab Emirates (UAE). More specifically, the article seeks to highlight the status quo of arbitration in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), both of which may serve as an offshore seat of arbitration in their own right. Both the DIFC and the ADGM offer a common law alternative to arbitration in onshore UAE. Part I of the article focuses on arbitration in the DIFC. It provides an introduction to the judicial and legislative framework of the DIFC, including in particular the main provisions and the operation of the DIFC Arbitration Law, the institutional framework of arbitration in the DIFC, the curial function of the DIFC Courts in DIFC-seated arbitrations, and the recognition and enforcement of domestic DIFC and foreign arbitral awards in the DIFC. Part I also discusses the DIFC Courts’ status as a conduit jurisdiction facilitating the recognition and enforcement of non-DIFC awards for onward execution in onshore Dubai and beyond.

The benefits and disadvantages of the law on the expansion of the jurisdiction of the DIFC Court

PurposeThis paper aims to discuss the benefits and disadvantages of the law on the expansion of the jurisdiction of the Dubai International Financial Centre (DIFC) Court. The major role of DIFC Courts in the Arab community is to handle cases related to commerce and business. For a long time, the court had been acting only in their geographical area until a new law was enacted to extend their jurisdiction all over the world. Afterward, a lot of criticism emerged as for why and how the court will benefit from such actions. The law has drawn a harsh response, although most benefits have also been experienced since the court received quite a large number of new signings. Interaction at the world business forum has benefited the economy of Dubai thanks to the law.Design/methodology/approachThe following study focuses on a description of such benefits and drawbacks. The study does not evaluate a factual process of expansion but indicates the most distinct evidence of positive, as well as negative consequences of the expansion.FindingsIt is appropriate to make a general comment on the fact that the expansion of DIFC Court is not sufficiently effective at the current stage. Needless to say, it contains numerous positive aspects, but the gaps are evidently essential because they place the entire Court in a hard circumstance. The Court does not have a well-developed legal framework for its new area of jurisdiction as long as its limited volume of prior precedent is a distinct sign of the Court’s dependence on the UAE’s Law. In such way, DIFC Court will not be able to address issues within new fields of jurisdiction, as it simply lacks an expertise and international law in its legal framework. Moreover, the jurisdiction over new areas of international business was not verified with a plain system of mediation, which is why a current expansion of DIFC Court has to be recognized as redundant. However, its advantages are tending to produce their effects provided that the Court manages to address its current problems.Originality/valueThe study has described the basic benefits and drawbacks of DIFC Court expansion. To speak about the main benefits, they can be depicted as appliance of the common law, unification of English language for proceedings, presence of a preliminary arbitration and guarantees of award enforcement. In a similar way, the drawbacks of the expansion have been issued. The study has identified such drawbacks as lack of international and sophisticated expertise, untested legal framework, strong influence of forum non conveniens, and existence of a limited volume of prior precedent. The paper has not assessed a success of a factual expansion of DIFC Court jurisdiction, but it has managed to fulfill its primary purpose. Thus, the paper has identified a certain tendency concerning the expansion.

The Dubai International Financial Centre (DIFC) Courts: A Specialised Commercial Court in the Middle East

The Dubai International Financial Centre came into existence in 2004 and has since developed into a world class financial centre. Established in order to attract foreign investment and to make Dubai an international hub for commercial and financial transactions, the DIFC is an independent jurisdiction under the UAE Constitution, with its own civil and commercial laws, mostly based on common law. The DIFC Laws are modelled on the best practices of the world’s major financial jurisdictions and embody the best of international financial and commercial law. DIFC’s laws and regulations are developed and administered by the Dubai International Financial Centre Authority (DIFCA) and the Dubai Financial Services Authority (DFSA) and are written in English. Importantly, the DIFC has also its own Courts, the Dubai International Financial Centre (DIFC) Courts: a specialised commercial court in the Middle East operating exclusively in English and based on common-law principles. In this article, we will discuss and analyse the function of the DIFC Courts.

СПОТОВЫЙ РЫНОК ДЛЯ ИРАКСКОЙ НЕФТИ И ПЕРСПЕКТИВЫ ТРАНСФОРМАЦИИ ЦЕНООБРАЗОВАНИЯ НА СЫРУЮ НЕФТЬ

The article analyses perspectives for developing a new spot market for Iraqi oil in the context of the sharpening competition of oil-exporters for export niches. Since opening of its oil sector to foreign capital and technology in 2009/2010 Iraq has firmly established itself as an important supplier of oil to European, Asia-Pacific and even US markets. In the present mechanism of crude oil price-setting Iraq is forced to adjust its oil export prices to the benchmarks established by more powerful market players. Meanwhile, the produced volumes of both Iraqi brands – Basra Light and Basra Heavy – are sufficient for launching a sustainable spot trade. The spot market will allow exporters of Iraqi oil to build long lasting partnerships with its buyers, e. g. refining plants in Europe and Asia-Pacific. Besides, the liquid and transparent spot prices will help the central authorities of Iraq to impose a discipline on the oil export which presently is in a chaotic stance. The spot market is promoted by a cooperation between the State Oil Marketing Organization and the Swiss trading arm of the Russian oil company Lukoil. Transfer of Iraqi oil exports to spot could trigger major adjustment or, possibly, even dismantling of the current institute of the official selling price presently used by OPEC countries. It is highly probable that in the medium term perspective new transparent and liquid spot market, localized in The Dubai International Financial Centre, will be integrated into the financial market. Eventually, this will lead to a structural strengthening of the world oil market.

The enforceability of electronic arbitration agreements before the DIFC Courts and Dubai Courts

Relying on modern technology to conclude arbitration agreements might raise some issues regarding the enforceability and formal requirements of the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (New York Convention or Convention), with special reference to Article II. This article Omar Husain Qouteshat and Kamal Jamal Alawamleh highlight the formal requirements and the legal issues of enforcing electronic arbitration agreements in accordance with the provisions of the Convention; analyses the ability to solve this issue in the Dubai courts and the Dubai International Financial Centre Courts (DIFC Courts) by examining possible solutions to enforce electronic arbitration agreements based on these provisions, including relying on electronic signature, interpreting Article II of the Convention broadly, and applying the principle of the most-favourable-law. It suggests possible solutions based on the principle of the most-favourable-law before the Dubai and DIFC Courts. Index words: United Arab Emirates; Dubai; electronic contracts; arbitration; e-commerce; enforcement; arbitration agreements

Challenges of authentication and certification of e-awards in Dubai and before the Dubai International Financial Centre courts: the electronic signature

This article evaluates whether an electronic signature is sufficient to fulfil the authentication requirement stated under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (NYC) article IV(1)(a) before the Dubai and Dubai International Financial Centre (DIFC) courts. Dubai is one of the few countries with two jurisdictions in one country. The party who is seeking the enforcement of the award in Dubai may enforce it before the Dubai or the DIFC courts, so the purpose of the comparison is to discuss whether the winning party may benefit from the DIFC. To achieve the objective of the study, this paper evaluates the ability to exclusively rely on secured electronic signatures to fulfil the requirement stated under article IV(1)(a), and to generally consider the validity of the electronic signature in the Dubai and DIFC courts.Index words: United Arab Emirates; Dubai International Financial Centre; electronic signature; digital signature; arbitration; e-commerce; enforcement; arbitration agreements; Convention on the Recognition and Enforcement of Foreign Arbitral Awards; Federal Law 1/2006 on Electronic Transactions and Commerce

The Implications of International Commercial Courts on Arbitration

The recently created Dubai International Financial Centre’s (DIFC) Courts and the Singapore International Commercial Court (SICC) aim to grant the same benefits to parties as international commercial arbitration, offering something of a hybrid; not quite arbitration, but not quite litigation in a national court either. However, their current model is little more than a national court in an arbitral tribunal’s clothing. Nevertheless, the advantages and disadvantages of the two systems seem to balance each other out overall, with the notable exception of the enforceability of the outcome. The DIFC Courts’ proposed mechanism to transform its judgments into arbitral awards raise the question of definition for arbitral awards and disputes, and raises dilemmas with regard to the impact it has on the review of the decision solving the initial dispute. The broader implication of this innovative process is that it can create an enforcement mechanism of foreign court judgments in all New York Convention states, broadening the scope of the Convention beyond what it was envisaged to cover, while also essentially eliminating the judicial review intended to be performed under the Convention over decisions rendered on disputes. Whether this innovative procedure will result in a more efficient form of harmonization, circumventing the difficulties posed by the absence of global harmonization on the recognition of foreign court judgments, or the risk of abuse will result in damaging already harmonized laws, will remain to be seen.

Common Pitfalls of Arbitration in the United Arab Emirates: Interference and Enforcement

Since the United Arab Emirates (‘UAE’) ratified the NewYork Convention in July 2006, the popularity of arbitration has soared in the UAE. The local UAE courts have enforced a number of arbitral awards under the Convention and the Dubai International Financial Centre (DIFC) Court now offers an alternative seat and route for the recognition and enforcement of arbitral awards pursuant to an UNCITRAL Model Law-based arbitration law. Yet there remain a number of recurrent pitfalls commonly encountered by parties attempting to enforce arbitration agreements, conduct effective arbitrations and enforce foreign and domestic arbitral awards in the UAE. Parties may be caught out by issues such as capacity, the breadth of disputes considered non-arbitrable by the local courts, and alleged deficiencies in the conduct of the arbitration and the award itself. These pitfalls result from quirks of UAE law and the fact that there is still no dedicated arbitration law applicable to all of the UAE.

The Regulation of Securities and Islamic Finance in Dubai: Implications for Models of Sharīʿah Compliance

The Dubai International Financial Centre (“DIFC”) has become an important component of an increasingly significant global market for Islamic finance. However, the state of academic discussion has not necessarily kept pace with its growing economic import. This paper improves the current state of literature by (1) examining the current regulatory infrastructure for securities and Islamic finance in the DIFC, (2) comparing its regulatory model with those of other important Islamic finance jurisdictions, and (3) exploring the implications of Dubai’s experience for the notions of legal transplants, convergence, and competition.

Trusts in the Gulf

In 2014, the Abu Dhabi government announced its version of the Dubai International Financial Centre (DIFC, see www.difc.ae ): the Abu Dhabi Global Market (ADGM). In January 2015, six consultation papers were issued on the legal structure of the new organization, to be established in facilities which are already largely constructed on the renamed Al-Maryah Island. On 14 June, the results of the consultation were published in the form of adoption of 8 Regulations (as to which see http://www.adgm.com/setting-up-business/legal-framework/ ), of which the most important for present purposes are the Application of English Law Regulations ( http://www.adgm.com/media/37261/applicationofenglishlawregulations2015_adgm.pdf ). The structure largely mirrors that of the DIFC and the Qatar Financial Centre (QFC, see http://www.qfc.qa/Pages/qfc-home.aspx ) which, as much of the preliminary work on its establishment was done by former DIFC personnel, not surprisingly closely follows the DIFC model. The essential differences between the DIFC and QFC models are that there is no separate admissions regime to practise before the QFC Courts and there is somewhat less codification of the common law, see http://www.complinet.com/qfcra/display/display.html?rbid=1557&element_id=3 .