Historically, the Dubai International Financial Centre (DIFC) Courts which consist of a Small Claims Tribunal, Court of First Instance and Court of Appeal, have had limited jurisdiction to hear disputes and were initially intended to act solely as a forum to settle civil or commercial disputes between entities registered in the DIFC. Specifically, parties not registered in the DIFC or who entered into contracts in the UAE without a nexus to the DIFC were not able to opt into the DIFC Courts jurisdiction and would typically be subject to the jurisdiction of the UAE Courts.

Before describing the significance of recent changes in respect of the jurisdiction of the DIFC Courts, it is important to consider the jurisdiction of the UAE courts. In general terms, the UAE Courts have a significant jurisdictional net. 

Whilst parties are in theory free to choose (pursuant to the provisions of the UAE Civil Code) the law and governing jurisdiction of their commercial arrangements, in practice this is not the case.

The UAE Courts are incredibly guarded in respect of their jurisdiction. Consequently where commercial or civil disputes with a nexus (whether, for example, by virtue of place of contract performance or the identity of the contracting parties) to the UAE have been subject to foreign law and jurisdiction clauses, and overseas litigation, a party seeking to enforce an overseas judgment in such circumstances in the UAE has typically been frustrated. This is generally a result of the UAE Courts determining that the subject matter of such overseas judgment should have been within the confines of their jurisdiction. Consequently, in such cases, overseas judgments have not been automatically enforced but instead have been subject to an effective “retrial” by the UAE Courts, in effect defeating the purpose of the award of the overseas judgment.

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