The Dubai International Finance Centre (DIFC) court has issued a landmark decision, in the case of DNB Bank ASA v Gulf Eyadah Corporation CA, that could allow UK companies to enforce foreign judgments and rulings without having to go directly to the Dubai court system (local courts).
The case concerned the enforcement of a judgment that Norwegian financial services group, DNB, had obtained in the Commercial court in London against two shipping companies in Dubai, for $8.7 million.
Dubai, which is part of the United Arab Emirates, has a separate jurisdiction through the DIFC, with its own system of laws based on the English Common Law. The DIFC has its own court structure: both first instance and appellate are composed of Judges from the UAE, UK and Hong Kong. These courts have a mechanism for reciprocal recognition of judgments with the Dubai courts.
In this decision, the DIFC courts allowed a referral of the English court's judgment to the Dubai courts using this mechanism. The only option previously open to the parties was to approach the Dubai local courts in order to enforce the foreign judgment, which was cumbersome and expensive.
The DIFC already has a Memorandum of Understanding with the English Commercial Court but, in the first instance, the DIFC Court of Appeal held that it had wider powers to enforce foreign judgments. It accepted jurisdiction in referring the matter to the Dubai courts, even where there seemed to be no connection to the DIFC. Further, the Court of Appeal said that it was not wrong to use the DIFC courts' jurisdiction as a "conduit" for enforcement, but warned that the Dubai local courts could still retain their discretion.
The decision is a welcome development, but whether the Dubai local courts will exercise their discretion in a case where there was no connection with the DIFC remains to be seen.