The newest pillar of the DIFC’s legal framework, the court system is the latest example of the international standards the DIFC is introducing to the Middle East region. The laws were issued on 22 December 2004, and provide for a new court system designed especially for the DIFC and the sophisticated transactions that will be conducted within it.

• The law establishing the Judicial Authority at the DIFC establishes and sets out the jurisdiction of the court, allowing for the independent administration of justice in the DIFC; and
• The DIFC Courts Law sets out the powers, procedures, functions and administration of the court.

A vital component of the DIFC, the DIFC Court will operate a court of first instance and a court of appeal. The DIFC Court deals exclusively with all the cases and claims arising out of the DIFC and DIFC operations.

A key feature of the laws is that they have been carefully crafted to provide legal certainty along with commercial flexibility. The introduction of these two crucial concepts into the independent judicial system for the DIFC is another example of the international standards upon which the DIFC is built.

The independent court system of the DIFC allows for a matter to be heard either within the DIFC Court or in a court of another jurisdiction if the parties so wish. In addition, the DIFC Laws are applicable by default unless the parties choose the laws of another jurisdiction. This flexibility takes account of the different circumstances and requirements of companies and institutions and allows them to ensure a dispute is heard within the legal framework which best suits them.

‘The enactment of the two laws is a fundamental cornerstone for the financial market we are building. Establishing a court system which is suited to hear sophisticated financial civil and commercial matters is crucial for participants in the DIFC who need to resolve disputes quickly, efficiently and to the high standards they would expect in most developed jurisdictions’, Dr Habib Al Mulla, Chairman of the DFSA Board said.

‘The DIFC is the first centre in the region to offer a comprehensive legal framework that is similar to those in London, New York, Singapore and Tokyo. Each new development adds another pillar of strength and support to that framework and to the DIFC.

‘The independent system is vitally important as it will help to build confidence for the major banks and financial institutions who locate in the DIFC’, Dr Habib Al Mulla said.

The Dubai International Financial Centre (DIFC) has been established to position Dubai as a recognised hub for institutional finance and as the regional gateway for capital and investment to the Middle East.

The Dubai Financial Services Authority (DFSA) is the independent regulator of all financial and related ancillary services conducted in or from the DIFC – for example, asset management, banking, securities trading, Islamic finance, re-insurance, and an international financial exchange. The DFSA has been created using principle-based primary legislation modelled closely on that used in London and New York, and the DIFC regulatory regime operates to standards that meet or exceed those applying in the world's major financial centres. The DFSA licenses blue-chip institutions operating in a variety of industry sectors with a primary focus on the wholesale markets.