Dubai: The Dubai International Financial Centre (DIFC) Courts have considered a large number of complex commercial and financial disputes, including a recently heard case in which the value of claims exceeded Dh4 billion, and another that ended with the annulment of a personal loan agreement that included a huge interest rate of 16% per month, as part of their handling of what the Vice President of the Courts, Judge Ali Shams Al Madhani, described as “cases involving whales and sharks.”Al Madhani pointed out that the centre’s Courts serve an economic system that includes about 8,800 licensed companies, and more than 70,000 people work and deal within it daily, which explains the nature of the commercial and financial disputes that it considers.During an interview with the ‘Arab Cast’ platform, Al Madhani revealed details of the DIFC Courts’ journey since its establishment, the reasons for its creation, the nature of its jurisdictions, and the most prominent principles it established in commercial disputes, reviewing practical examples of cases considered by the court, the limits of choosing the applicable law, and its role in enhancing investors’ confidence in the judicial system in Dubai.He stressed that since its establishment, the court has not aimed to increase the number of cases it considers, but rather has focused on the quality of judgments and cases with economic impact, noting that its success has been linked to consolidating confidence in the investment environment, and providing a specialised judicial system that deals with complex commercial and financial disputes in accordance with international standards, with full commitment to the public order in the UAE.Vice President of the DIFC Courts, judge Ali Shams Al Madhani. Picture credit: SuppliedHe said that the DIFC Courts deal with what he described as "whales and sharks," referring to major commercial and financial disputes, stressing that the court does not measure its success by the number of cases it hears, but rather by the value and impact of the judgments it issues.Al Madhani added that the court recently considered a case in which the claim amounted to about Dh4 billion, noting that such cases reflect the nature of the files that the court considers, which require specialised judicial expertise in commercial and financial aspects.He noted that a number of senior judges in Supreme Courts around the world described the DIFC Courts as “a small but influential court,” explaining that the court’s influence went beyond its institutional size to the quality of its rulings and its role as a reference point in commercial law.He explained that the establishment of the DIFC Courts came within the vision of the Dubai government to establish a global financial centre, capable of attracting international financial institutions and companies. He explained that at the beginning of the project, the government conducted consultations with a number of international institutions to find out the basic requirements for their presence in the region.These institutions did not focus solely on economic incentives, Al Madhani added, but also raised questions regarding the existence of a legal and judicial system that provides protection for investments and resolves disputes according to standards known to international investors.He pointed out that the transformations that the world witnessed after the September 11, 2001 attacks contributed to redrawing the map of capital flows, which prompted Dubai to accelerate its steps towards establishing a global financial centre supported by a specialised legislative and judicial system that enhances investor confidence.He stressed that the investor is not only looking for economic opportunities, but also for an independent and swift judiciary that guarantees the protection of his rights in the event of any dispute, which is one of the most important foundations, upon which the DIFC Courts was built.Al Madhani stated that the size of the economic system served by the DIFC Courts reflects the importance of having a specialised judiciary, noting that the centre includes about 8,800 licensed companies, while the number of clients and employees who enter it daily exceeds 70,000 people, which makes it, as he described it, an integrated economic city, requiring a judicial system capable of keeping pace with the size of the commercial and investment activity it is witnessing.Al Madhani explained that the DIFC Courts did not adopt a legal system that was an alternative to the legal system in the UAE, but rather came to provide a familiar legal environment for international companies that were accustomed to dealing with this system in international financial centres.He added that the experiment faced several questions at the beginning, but the application proved the possibility of combining respect for the UAE legal system with providing a judicial system that responds to the requirements of international trade and investment.Case studiesAl Madhani recounted the details of one of the cases that he considered a practical model of the philosophy of the DIFC Courts, explaining that the dispute arose between two people, regarding a personal loan that included interest of 8% every two weeks, or 16% monthly.He said that the two parties to the dispute agreed to resort to the DIFC Courts to resolve the case, but that did not resolve all the legal issues, as the court had to determine the applicable law, in addition to examining the legitimacy of the agreed interest, and whether it complied with the mandatory rules and public order in the UAE.He added that the court ended up invalidating the interest agreement, after it became clear that the lender was not licensed to practice lending activity in the first place, and that the agreement violated the legislation regulating this activity, stressing that choosing the Courts of the Dubai International Financial Centre or agreeing to apply a specific law does not permit circumventing the rules of public order or violating mandatory legislation in the country.He pointed out that the case did not end with the issuance of the ruling, as the borrower later returned to demand the return of the interest that he had previously paid, based on the principle of “unjust enrichment,” considering that the court had ruled that it was not due, which opened a new dispute over the legal implications of the first ruling.He stressed that this case represented a practical application of the court’s philosophy, which grants contracting parties the freedom to choose the litigation body or the applicable law, but does not allow for exceeding the rules of public order or legitimising agreements that violate the legislation in force in the UAE.Understanding the court’s jurisdictionAl Madhani explained that the jurisdiction of DIFC Courts is not limited to companies and institutions operating within the Centre, but extends to multiple forms defined by law, including disputes arising within the DIFC, or cases whose parties agree to refer them to the court, even if the legal relationship originated outside its geographical boundaries.He said that the agreement of the parties on the jurisdiction of the court is one of the foundations on which it is based, in considering many cases. He cited the example of a contractor and a property owner in an area outside the limits of the centre, who agreed when concluding the contract that the Courts of the DIFC would have jurisdiction to consider any dispute that may arise between them. He explained that the court exercises its jurisdiction in this case based on this agreement, while determining the applicable law remains subject to what is stipulated in the contract or to the relevant legal rules.Al Madhani added that the court's jurisdiction also includes disputes in which a company or institution licensed within the Dubai International Financial Centre is a party, including some labour cases, as well as civil lawsuits related to activities carried out within the centre.He pointed to one of the cases that the court considered for a woman who demanded compensation after she suffered damages, as a result of using one of the products inside a beauty salon located in DIFC, explaining that the court’s jurisdiction was established in this case because the incident was related to an establishment operating inside the centre, even though the subject of the lawsuit does not relate to a commercial dispute in the traditional sense.He confirmed that DIFC Courts may apply foreign laws if the parties to the contractual relationship agree to this, noting that the court has previously considered disputes that were subject to English law, and others to Chinese, Russian and Dutch laws, in accordance with what was stipulated in the contracts concluded between the parties.He added that this flexibility does not extend to mandatory rules or public order in the UAE.
