When DIFC Courts began operating a little more than a decade ago, the UAE business community’s general reaction was that of scepticism. Many questioned the new entity’s long-term power, jurisdiction and influence.
Fast forward to 2017 and DIFC Courts could well be providing the blueprint for the commercial courts of the future.
On April 20, it signed a memorandum of understanding with the Abu Dhabi Judicial Department (ADJD), the Arabic-language civil law court governing Abu Dhabi, cementing an already existing relationship with the capital.
“It’s the last piece of the jigsaw,” says DIFC Courts co-chief executive and registrar general Mark Beer, OBE. “We now have a connection with every court system within the UAE.”
Connectivity is the byword for Beer and his colleagues.
DIFC Courts are connected to Abu Dhabi’s English-language Abu Dhabi Global Market (ADGM), the Arabic AGAD courts, and, as of December 2016, to Ras Al Khaimah’s independent courts. In the rest of the emirates, they are connected to the federal court system that is governed by the Ministry of Justice, not to mention to the Arabic-language civil law Dubai Courts, located on Dubai Creek.
“Dubai Courts is our big brother,” Beer says. “We have a narrow focus of helping business solve its problems and helping individuals and SME owners, but we’re not a criminal court. Dubai Courts has an inspirational leader at the helm, his Excellency Taresh Al Mansouri, and we work closely with him and share ideas.”
From the offset, DIFC Court’s rulings had to be enforced by Dubai Courts. Now, beyond the UAE’s borders, the fledgling courts have similar connections with most Middle East countries as well as the US, the UK, Europe, Singapore, South Korea, Malaysia and Australia, amongst others.
More significantly, in October 2016, the DIFC Courts became the first foreign commercial court to forge a relationship with the Shanghai High People’s Court, the foremost business court in the commercial and financial centre of mainland China, which is one of the UAE’s largest trade partners.
This “hyper-connectivity” — relationships with courts at home, abroad and with individuals — is primarily aimed at building the world’s strongest enforcement regime. The work at DIFC Courts has brought international praise for facilitating the legal process for UAE-based companies, and led DIFC Courts to be seen as one of the top commercial courts in the world.
“It’s nice that in a short period of time we have been recognised as being one of the most technologically advanced courts in the world,” Beer says. “We owe that to the brilliant people who work here on the technology. And our goal — or vision — is to make sure that by 2021 we are seen as the number one commercial court in the world.”
Beer sees some positive indicators this will be achieved. Next year, he is set to take over the presidency of the International Association for Court Administration, which is a vindication, he says, for the innovation and technology currently operating in the Middle East.
DIFC Courts, thanks to their relative infancy, has had a chance to reinterpret how courts function in the 21st century, with a focus on technology, transparency and customer service.
“We were blessed with a clean sheet of paper when we started and what we understood is that in today’s world you don’t need to physically attend a court,” Beer says. “The minute we realised that we don’t physically need to turn up here to conduct the case, the barriers came down about where the lawyers need to be based. So we said you can be based anywhere in the world. For example, an Australian business might want to use their Australian law firm to help them.”
The DIFC Courts are keen to help SMEs and individuals in their disputes.
“People are very nervous when they walk into court,” he says. “They sit and wait. What they want to do is sit at home, do their preparation and they want to talk to the judge from a comfortable place, from their mobile phone. Helping people get access to justice becomes the core of it, and if we keep doing it I’m absolutely convinced we will hit our target of being recognised as the world’s leading commercial court by 2021.”
For small claims cases, which are carried out without lawyers, 90 percent are resolved within four weeks. For bigger cases, involving anything more than AED500,000 ($136,000), parties are allowed to hire lawyers. That has not always been straightforward.
“People were coming to us, [when] their businesses were potentially having to close,” Beer says. “They had a great business, great idea, employed 20 or 30 people, they’re up in one of the free zones and they’ve done a huge piece of work, and they haven’t been paid.”
As disputes drag on, many individuals or SMEs find themselves in a catch-22 situation; they cannot afford a lawyer because they have not been paid by the person they intend to take to court. DIFC Courts provides relief.
“To my mind that was desperately unfair, so we put in the Middle East’s first pro bono scheme here in the DIFC Courts,” Beer says. “That pro bono scheme means if you need help and you need a lawyer because it’s high value, we have a list of lawyers from the biggest law firms. And if you just want to talk about it, we have pro bono clinics every two weeks.”
In the two cases that have gone all the way to trial, the person who required DIFC Courts’ legal support has won on both occasions.
The DIFC Courts also help to support the finest legal talent emerging across the emirates.
This has led to the DIFC Courts becoming the first governmental agency to be awarded five stars for customer service under the UAE’s new rating system.
“Why have we focussed on customer service?” Beer asks. “Because when people come here, it isn’t the beginning of their journey. They’ve got to the point of frustration in their journey that they need someone else to help them. So we’ve got to make sure we can look after them, to make sure they feel comfortable.”
Filing a case from the comfort of your home while at the same time having access to a lawyer’s free advice is one way to ease the burden.
“If you want to file a case with us, you do it from your mobile, from your PC at home, you don’t have to come here,” Beer says. “We do a lot to help the process, and the feedback we got from the small claims side of it, people say, ‘I had no idea that getting my rights could be this pleasant’, even if that’s not the right word.”
Ultimately, providing technology, transparency and customer service, Beer says, is the role of the courts today.
“Historically, we’ve built these huge buildings with columns, and it’s intimidating for most people and perhaps it was designed to be intimidating,” Beer says.
“But that’s not the role of our service any more. And at the end of the day we’re a service, we’re here to help people solve their problems so we’ve got to be more open. We have to make people feel comfortable about it.”
Dealing with the world from DIFC Courts
Beyond Dubai, Abu Dhabi and the rest of the emirates, DIFC Courts has partnerships with the GCC and Arab world covered by regional treaties, as well as the Americas, Europe, Australasia, Singapore, South Korea, Kazakhstan and Russia.
There is a reason why such a wide “hyper-connected” network is needed, according to Beer. The courts in most countries focus on domestic disputes, which cover up to 98 percent of cases. Dubai, on the other hand, is unique in its number of foreign companies and expatriates and as such requires a global legal network.
That Dubai Courts are frequently the first to sign agreements with other courts, which is a source of pride. “We were the first court that the UK commercial courts signed a memorandum with,” Beer says. “London gets you access to the UK and the EU. We signed with Southern District of New York, which gets you into the US. There’s South Korea, a hub for innovation and construction. Singapore is a natural connection, and there’s a very large trade partnership between UAE and Australia.”
With China being one of the UAE’s largest trading partners, it was inevitable the two countries would sign a legal agreement, and that arrived in late 2016. Again, it was mainland China’s first connection with a foreign court.
Much of the initial relationship building was achieved offering some of the best Chinese business students internships in Dubai.
“The concept was that these people would go back to China and be aware of how amazing Dubai was in the context of being one of its biggest trading partners,” Beer says.
“If you go to a trial, then the court has failed”
Alongside three Emirati judges, DIFC Courts has top judicial officials from Singapore, Hong Kong, the US and the UK, adding up to a combined 350 years of experience. As a result, there has yet to be a ruling not enforced by overseas courts.
“It’s a 100 percent track record,” Beer says. “My personal view is that if you go to a trial, then the court has failed. What people really want from a court is settlement: ‘Will the court help me to resolve this problem?
“Whether you’re a Fortune 500 company with billions of dirhams or someone who’s got a problem with their employer, what you want is resolution,” Beer says. “You want the system to be good, to be perfect, you want one of the world’s most advanced commercial courts to be on your doorstep, but ultimately what you’re looking for from the system is help and we do such a good job that very few cases end up having to go to a trial.”
In total, $1.5bn worth of cases were filed last year, up from $440m two years ago. About 85 percent of cases, each worth an average of $25m, were settled. That is down compared to 92 percent when DIFC Courts started. The reason, Beer says, is that as cases get more valuable, the inclination not to settle increases.
“Still, we think we have the highest settlement rate of any commercial court in the world, but most commercial courts don’t publish their figures,” he says.
Beer says that transparency is key to the way DIFC Courts operate, compelling parties to focus more seriously on resolving disputes.
“The DIFC at the outset focussed on governance,” he says. “You look at the creation of Hawkama as a governance institute, it’s been high on the agenda of the DIFC Courts from the beginning. The way that the regulator operates and the way we operate all fit into a model of corporate governance of transparency, of ethics. We were the first court in the Middle East to have a code of conduct.” (Hawkama is the name of the organisation that was created to offer assistance to the private and public sectors in MENA so as to adopt good governance standards).
Beer praises new co-chief executive
For nine years, Beer has worked alongside Amna Sultan Al Owais, whose promotion to the top role was announced on May 23. During that time she has played an important role in helping the DIFC Courts enhance its status as one of the world’s leading commercial courts.
“Amna is a wonderful example of Emirati women excelling in the judicial sector,” Beer says. “Her well-deserved elevation to the very top echelons of our organisation is a source of great personal pride.”
Al Owais replaces Beer as registrar, while he becomes registrar general. Additionally, Al Owais remains in her current role as a Small Claims Tribunal judge and deputy chief executive of the Dispute Resolution Authority. He remains chief executive of the Dispute Resolution Authority.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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