Speedy execution of new strategy raises appeal of DIFC Courts jurisdiction in H1 2022

Based on the figures reflecting its performance for the first six months of the year, Dubai International Financial Centre (DIFC) Courts has reaffirmed the positive impact of increased efficiency of process, making it a preferred platform for dispute resolution.

The volume of cases across all divisions recorded a 10 per cent increase in the first half of 2022, compared with the first six months of 2021, with a total value of Dhs1.9bn. In the main Court of First Instance (CFI), 44 cases were filed, with the total value of Dhs 1.87bn and an average case value of Dhs53.3m. Cases within the Arbitration division under the CFI also recorded an increase in the first six months of 2022, with a total value of Dhs1bn and an average claim value of Dhs130m.

Claims brought before the CFI covered a range of sectors, including banking and finance, real estate, manufacturing, retail, and hospitality, and involving disputes related to breach of contract, outstanding payments, wills and probate, and employment. There was also a noticeable number of ‘opt-in’ cases for the first six months of 2022, with 50 per cent of claims in the CFI cases originating from parties ‘electing’ to use the DIFC Courts to resolve their disputes.

The operational capacity of the region’s first Small Claims Tribunal (SCT) was strong in the first six months of 2022, with 263 claims filed, an increase of 31 per cent year-on-year and an overall claim value totaling Dhs23.8m, a 16 per cent increase for the same period in 2021.

Claims were driven primarily by disputes involving breach of contract, employment, banking and finance, and property and tenancy. Increased remote virtual hearings through the region’s first ‘Smart SCT’ virtual court, has led to over 62 per cent of claims registered originating from parties selecting the SCT as their preferred method for dispute resolution.

Reinforcing the paperless strategy of DIFC Courts, over 650 digital orders were issued in the first six months of 2022, and a further 66 judgments issued for the same period.

Justice Omar Al Mheiri, director, DIFC Courts, said: “The DIFC Courts has entered 2022 with clear intent and purpose; with the approval of HH Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance and President of the Dubai International Financial Centre, the new DIFC Courts Strategic Work Plan, 2022 – 2025, is in full effect. Encapsulated within a four-pillar mandate, the upgraded strategy outlines an ambitious drive for full digital transformation through advanced technologies to increase the efficiency of dispute resolution. A new hyperconnected judicial network will also be developed alongside cutting-edge legal procedures and specialised Rules for enhanced accessibility to court services.”

Digital transformation for efficiency

The latest work plan of the DIFC Courts also recommends increased digital transformation, with the replacement of outdated processes with end-to-end digital technology, ensuring court systems are smart, user-friendly and agile enough to keep pace with global commerce. For example, artificial intelligence will reduce clerical burdens, help streamline the case review methodology, create a realistic virtual presence, remove document duplications, and unlock time to take on significantly more complex tasks.

In early 2022, the new Digital Economy Court assigned a group of international lawyers and industry experts to draft and approve new specialised rules for the Digital Economy division. Leading international judicial expertise is also being finalised to oversee and operate the court’s advanced digital infrastructure and service capabilities, with further updates on this front scheduled for the coming months.

In the first six months of 2022, Phase II of the Court Tech Lab initiative was launched, with the project R&D programme launched to position Dubai as the city that pioneers new industry-specific technologies.

Phase II involved a prototyping stage for two finalists, where they received financial support, as well as access to the DIFC Courts to research, test and adapt the technology solution. The finalists were FaceKi from Bahrain and CourtCorrect from the UK, who provided solutions to their assigned challenge.

Future research from the DIFC Courts will combine expertise and resources to investigate handling disputes arising out of private and public blockchains, with regulation and contractual terms encoded within the smart contract. Implications for cross-border data flows, digital and data governance, and ensuring protection and security of information for the business relationships that help drive the digital economy, are now being reviewed with accelerated intent.