The DIFC announces new Dispute Resolution Authority

Publication | June 2014

The Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has issued Law No. (7) of 2014, amending certain provisions of Law No. (9) of 2004, concerning the Dubai International Financial Centre (DIFC).

The new law is designed to further enhance the DIFC as an effective centre for dispute resolution in the region that will provide parties with more options when considering the most appropriate forum to hear a dispute. This is in line with the UAE’s aim to become a leading global destination for effective dispute resolution.

In this regard, the new law replaces the DIFC Judicial Authority with a new body known as the Dispute Resolution Authority (DRA). The DRA will be comprised of:

  • the DIFC Courts
  • the Arbitration Institute
  • such other Tribunals or bodies as necessary to carry out the duties of the DRA

Under the new law, the duties and powers of the DIFC Courts will remain unchanged, however, an academy will be set up under the heading “such other Tribunals or bodies” that will deal with all of the non case related administration such as pro bono, practitioner registration, training courses and will in effect constitute a DIFC bar association.

The key development is the establishment of the Arbitration Institute. The DIFC currently houses an arbitral institution in the form of the DIFC-LCIA Arbitration Centre. We understand that the DIFC Courts are currently considering the form and structure the Arbitration Institute will take. The new law provides that the Chief Justice of the DIFC Courts will also be the Head of the DRA who, among other tasks, will be responsible for appointing a Board of Trustees to manage and oversee the Arbitration Institute. We would expect an announcement from the DIFC Courts with regards to the implementation of the DRA in the coming months.

We also await details of how the Arbitration Institute will be structured to address, amongst other matters, the general rule that arbitration centres are usually separate from national courts to ensure independence. Under the new law, the DRA will oversee both the DIFC Courts and the Arbitration Institute. The new law expressly states that each will have a separate legal personality. We anticipate that the DIFC will be considering how best to ensure and demonstrate that the DRA will operate each body independently of the other.