New DIFC Laws Enacted

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

28 June 2005

It emerged on Sunday that His Highness Sheikh Maktoum Bin Rashid Al Maktoum, Ruler of Dubai, has enacted five new laws dealing with legal obligations, employment and security interests in relation to the Dubai International Financial Centre, and the Board of Directors of the Dubai International Financial Centre Authority has issued additional company regulations.

The new legislation comprises:

• Employment Law No. 4 of 2005. This law provides for minimum employment practices comparable to established international standards, so as to promote fair treatment of employees and employers;
• Law of Obligations No. 5 of 2005. This law creates a framework for claimants to seek recovery for non-contractual claims and sets out the rules as to when obligations arise and how disputes involving them are resolved;
• Implied Terms in Contract and Unfair Terms Law No. 6 of 2005. This law provides for fairness and certainty in contracts governed by the laws of the DIFC by providing terms and conditions not normally included in contracts and assures the necessary framework for their enforcement;
• Law of Damages and Remedies No. 7 of 2005. This law creates the structures necessary to assure the recovery of damages and other forms of relief to claimants within the DIFC; and
• Law of Security No. 9 of 2005. This law defines various forms of security interests as collateral for repayment of debts and prescribes the process for their perfection and enforcement.

Commenting on the issuance of the new laws and regulations, Dr Omar Bin Sulaiman, DIFCA Director General observed that:

“The DIFC is a distinct legal jurisdiction. This is a critical component of the overall offering of the DIFC and a major factor in the decisions of the numerous financial institutions that have applied for and received licenses to operate here. In the development of this legal system we have sought input from the world’s leading capital markets so as to ensure that we provide the world’s financial communities with the legal certainty they require."

"The issuance of these laws and regulations confirms our commitment to the continuing development of a framework which they will understand and within which they will feel comfortable operating. This legal framework was set in motion with the passage of the first set of laws in September of 2004 and the process is on-going. Other laws are planned for passage later this year in keeping with the DIFC’s promise of providing the best-in-class legislation addressing the full breadth of operations permitted to be carried out in and from the DIFC.”

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