Dubai Enacts New Financial Court Law
New Law on Dubai Financial Center Court Jurisdiction
Dubai's leader, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, has enacted a new law on the jurisdiction of the Dubai International Financial Centre (DIFC) courts. The new regulation, enacted as Law No. 2 of 2025, not only regulates the tasks and operations of the courts but also mandates the establishment of a new mediation service center to help parties resolve their disputes amicably.
Independence and Responsibilities of DIFC Courts
Under the new law, DIFC courts—comprising the Court of Appeal, the Court of First Instance, and the Small Claims Tribunal—exercise their functions and jurisdiction independently. The operation of the courts is determined by law, DIFC's own laws and regulations, and court rules. The law details the appointment mechanisms for the court's president and director, as well as their responsibilities.
The goal of DIFC courts is to provide efficient and modern dispute resolution mechanisms that encompass not only traditional litigation but also offer alternative solutions. This includes the creation of a new mediation service center aimed at helping parties resolve their disputes peacefully with the assistance of mediators. Mediators are selected from professionals registered with the DIFC courts, ensuring the process's professional quality.
Role and Operation of the Mediation Center
The operational framework, jurisdiction, and procedures to be followed by the mediation center are determined by the center’s president. This step indicates that Dubai is serious about quickly and effectively resolving corporate and commercial disputes, saving time and resources while preserving relationships between parties. Mediation, as an alternative resolution mechanism, is becoming increasingly popular in the international business world, and Dubai strives to follow this trend.
Exclusive Jurisdiction of DIFC Courts
The new law highlights that DIFC courts have exclusive jurisdiction over civil, commercial, and employment cases initiated by or involving the center’s bodies or institutions. This implies that in such cases, DIFC courts are the exclusively competent authorities, further elevating the center's significance and influence in the region.
The law also comprehensively regulates litigation processes, evidential rules, urgent situations, enforcement, liability exemptions, technical errors, procedural mistakes, and statutes of limitations.
Review of Previous Regulations
The new law repeals Law No. 10 of 2004, as well as Law No. 12 of 2004, which previously governed DIFC courts. Furthermore, any provisions that contradict the new law are revoked. This step indicates Dubai's ongoing efforts to update and modernize its legal framework to meet the expectations of international financial centers.
Summary
The Law No. 2 of 2025 not only regulates the operation and jurisdiction of DIFC courts but also mandates the establishment of a new mediation service center to enable parties to resolve disputes amicably. This move strengthens Dubai's position as an international financial center and contributes to making the city attractive to global business players. The new law clearly signals that Dubai takes legal security, efficient dispute resolution, and modern legal frameworks seriously, fostering economic growth and stability.
