Dubai's New Judicial Authority: A Game-Changer for Dispute Resolution
23 August 2024
Bini Saroj
In a significant development aimed at enhancing legal certainty and efficiency in the Emirate of Dubai, the Ruler of Dubai issued Decree No. 29/2024 crystalizes the role of the Judicial Authority as an independent judicial authority who has a final say in conflicts of jurisdiction between the DIFC and the Dubai Courts. This was mainly due to the Jurisdiction Conflicts between the Courts of the Dubai International Financial Centre ("DIFC Courts") and Judicial Authorities ("Judicial Authority").
Dubai: the "New Judicial Authority" replaces the previous Joint Judicial Committee and is designed to address the increasing complexity of jurisdictional disputes arising between the Dubai International Financial Centre (DIFC) Courts and other Dubai-based judicial bodies.
Article 4 of Decree of 29/2024 limits the Judicial Authority’s functions:
1.Determining the component Judicial Body having jurisdiction over any claim or application in respect of which a conflict of jurisdiction arises between the DIFC Courts and any of the Judicial Bodies.
2.Determining the judgement that shall be enforced in case of issuance of contradictory judgements by the DIFC Courts and other Judicial Bodies on lawsuits related to the same parties and the same subject matter of the dispute.
Article 4 (3) of the Decree 29/2024 allows the Rules or the Chairman of the Judicial Authority to delegate additional duties or powers to the Judicial Authority, the exclusion of other powers the exclusion of other powers in the Decree 19/2016 are not intentional.
Another change within the Judicial Authority’s powers is that now they are empowered to resolve conflict of jurisdiction not only between DIFC Courts and Dubai Courts but also between the DIFC Courts and any Judicial Body (as per Article 4 of Decree 29/2024). Judicial Bodies are judicial bodies that are judicial authorities as per the legislation establishing them. This goes ahead than the Dubai Courts for instance the Rental Disputes Resolution Centre (Article 1 of Decree 29/2024).
The effect of the Judicial Authority decisions:
Decree 29/2024 has provided a binding effect on the decision of the Judicial Authority is two-fold which is vis-a-vis the parties of a specific case and is final and binding of the jurisdiction (Article 9 (b) of Decree 29/2024). Even then, the decision also has binding effects on the courts in other matters (Article 9(b) of Decree 29/2024).
Thus, the Decree 29/2024 confers a precedent-like effect on the decisions of the Judicial Authority which binds all Judicial Bodies.
•Composition of the Judicial Authority: The Judicial Authority has the Secretary General of the Judicial Council and the three judges from each system of courts:
1.The Chief Justices of the Dubai Courts of Cassation, the Court of Appeal and the Courts of First Instance.
2.The Deputy Chief Justice of the DIFC Courts and two judges from the DIFC Courts selected by the Chief Justice of the DIFC Courts.
The president of the Dubai Courts of Cassation is the Chairman but a new function of Deputy-Chairman is established with the Deputy Chief Justice of the DIFC Courts assigned to this role. However Decree 29/2024 does not clarify its functions and powers.
Moreover, two judges selected by the Chief Justice of the DIFC Courts do not need to be one from each of the Court of First Instance and the Court of Appeal. The DIFC Courts’s Chief Justice is not assigned a seat in the Judicial Authority.
PROCEDURES:
Procedures as per Decree 29/2024 are consistent with Decree 19/2016 and considered casses upon application of a party where:
(i) there is a conflict of jurisdiction;
(ii) none of the Judicial Bodies relinquished the claim or both of them did or the Judicial Bodies issued contradictory judgments thereon.
Decree 29/2024 also has the following developments:
1.The Attorney General is not authorised to refer the matter to the Judicial Authority.
2.Decree 29/2024 does not provide for the period for consideration of a request, unlike Decree 19/2016.
3.The provisions on stay of the proceedings have been amended - this provides a clearer provision for an automatic stay on proceedings in case of a referral to the Judicial Authority.
Article 7 of the Decree 29/2024 is consistent with Decree 19/2016 that pending the consideration of the request by the Judicial Authority:
1.The proceedings are subject to the requests being stayed.
2.Relevant execution proceedings are stayed.
3.Limitation periods are suspended for the period from the ‘date of submittal’ of the claim to the Judicial Authority.
Evidently, the objective behind the introduction of the New Judicial Authority is to provide a greater predictability for businesses as to the proper forum for resolving their disputes in Dubai. The New Decree helps to achieve that with the wider remit of the New Judicial Authority and the introduction of a system of precedent.
However, the wording of “reference of a dispute” resulting in a stay was replaced with the language suggesting that the consideration of the application by the Judicial Authority stays the proceedings. For instance, in the ruling in Lakhan v. Lamia [2021] DIFC CA 001, the COA established that the DIFC Court has to be satisfied that there is a genuine conflict of jurisdiction to impose a stay.
A combination of the automatic stay of the proceedings and without a period of consideration of a request by the Judicial Authority could create a possibility of prolonged stays of proceedings. Notably, to avoid delays parties should reconsider the common practice of initiating parallel proceedings, since the automatic stay on such proceedings could extend over 30 days.
Another criticism is that this decree potentially allows for a ‘guerilla tactics’ as the claims stay automatically on the submission of an Application. Furthermore, there is no express time limit for the New Judicial Committee to issue a decision.
In conclusion,
The new Decree makes developments to resolving issues in the older decree. By providing a clear and efficient mechanism for resolving jurisdictional conflicts, the authority contributes to a more predictable and stable legal environment.
This, in turn, is expected to enhance investor confidence and foster economic growth. While challenges may arise, the New Judicial Authority is well-positioned to play a pivotal role in shaping the future of Dubai's legal system.
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