Jurisdictional Developments In The DIFC Courts

Jurisdictional developments in the DIFC courts, an examination of the Corinth Pipeworks SA -v- Barclays Bank PLC ("Corinth") case and other matters"...

When the DIFC Courts were established by Law 12 of 2004 ("Law 12") their jurisdiction was defined in Article 5 to be exclusive in relation to

civil or commercial cases and disputes involving the Centre or any of the Centre's Bodies or any of the Centre's Establishments. civil or commercial cases and disputes arising from or related to a contract that has been executed or a transaction that has been concluded, in whole or in part, in the Centre or an incident that has occurred in the Centre. objections filed against the decisions made by the Centre's Bodies which are subject to objection in accordance with the Centre's Laws and Regulations; any application over which the Courts have jurisdiction in accordance with the Centre's Laws and Regulations. Article 5 also provided that the parties could opt out of DIFC Court's jurisdiction in relation to items a, b and d above.

Centre Establishments are defined in Law 12 as "Any entity or business duly established or carrying on business in the Centre, including any Licensed Centre Establishments. A Licensed Centre Establishment is defined as "Any entity licensed, registered or otherwise authorised to carry on financial or banking business including those activities or businesses referred to in Article 9 of the Centre Law."

Until recently Article 5 has been construed narrowly by most lawyers and commentators (including the writer).

In October 2011, when, by Law No. 16 of 2011 ("Law 16"), the jurisdiction of the DIFC Courts was extended to include cases and claims in which the parties had agreed in writing (before or after the disputes were raised) to the jurisdiction of DIFC Courts, this was widely welcomed in the Regional business community as giving access to an English language common law court system if the parties so elect in a written agreement explicitly entered into between the parties. The words used in Law 16 state "...this agreement must be according to a clear and explicit special provision."

What the Court of Appeal, comprising the Chief Justice Michael Hwang SC, Justice Sir John Chadwick and HE Justice Ali Al Madhani has now decided in Corinth is that the original jurisdiction of the court extends further than many commentators had previously thought (and than was originally determined at First Instance by the Deputy Chief Justice, Sir Anthony Colman, in this case). The case was determined under Law 12 which was applicable at the time of the hearing but had been amended by Law 16 by the time the judgment was rendered. However, if Law 16 has to be applied to the same circumstances the result would be the same.

The brief facts of the matter...