A closer look at the Judicial Tribunal and its key decisions of 2017

The Joint Judicial Committee (the "Judicial Tribunal"/"JT") was established by the Government of Dubai Decree No. 19 of 2016 issued on 9 June 2016 (the "Decree"). The JT comprises a seven member panel made up of four judges from the "onshore" Dubai Courts and three from the DIFC Courts. Its mandate is to review and resolve "conflicts of jurisdiction" between the DIFC Courts and the Dubai Courts.

We provide a review of the JT's key decisions since its launch the first of which (Daman Real Capital Partners Company LLC v Oger Dubai LLC) was issued in November 2016 and called into question the use of the DIFC Courts as a conduit jurisdiction.1

Since this landmark decision, a number of decisions were made by the JT in 2017 and a definite jurisprudence has emerged.

We have classified the key decisions into three categories:

• the JT's decisions giving guidance as to what is a "conflict of jurisdiction";

• the decisions relating to the enforcement of domestic Dubai arbitral award; and

• the decisions relating to the enforcement of foreign arbitral awards and judgments.

1. A "conflict of jurisdiction"

The JT is tasked with reviewing and resolving "conflicts of jurisdiction" between the DIFC Courts and the "onshore" Dubai Courts. In a series of decisions, the JT gave more guidance as to what is the scope of its powers and what is a "conflict of jurisdiction".

Investment Group Private LTC v Standard Chartered Bank

The application related to proceedings before the DIFC Courts during which Investment Group Private ("IGP") had conceded to the DIFC Court's jurisdiction but then argued the Sharjah Courts would be a more appropriate forum. 

IGP, thereafter, initiated proceedings before the Dubai Court of First Instance and contended that the DIFC Courts were not competent to hear the case initiated by Standard Chartered Bank ("SCB"). The Dubai Courts, both at first instance and appeal levels, dismissed the case on the grounds that IGP conceded to the DIFC Court's jurisdiction and could not withdraw such a concession.

IGP, then, filed an application before the JT seeking the JT to order that the "onshore" Dubai Courts had jurisdiction to hear the dispute between them and SCB and that the DIFC Courts were not competent to entertain the case.

The JT dismissed the case and concluded that the DIFC Courts should entertain the case as having conceded to the jurisdiction of the DIFC Courts IGP should be bound by such a concession. This decision was based on the concession rather than a principle.

Following the JT's decision, in the resumed DIFC proceedings, IGP filed a counterclaim, which the DIFC Court allowed subject to certain conditions, including payment of an outstanding costs order and discontinuance of the proceedings before the Union Supreme Court. IGP refused to withdraw its petition before the Union Court and filed a new application to the JT, seeking an order from the JT that the DIFC Court be compelled to accept the counterclaims without condition.

The JT dismissed the case on the basis that there was no conflict of jurisdiction and held that it “is not tasked with dictating the procedures or decision of the Dubai Courts or DIFC courts, and is only authorised to make a determination of the competent court when a conflict of jurisdiction arises“.

Gulf Navigation Holding PJSC v DNB Bank ASA

The application related to the recognition of a foreign judgment issued by the Commercial Court in London.

Gulf Navigation Holdings ("GNH") filed an application before the JT requesting the JT to annul the decision of the DIFC Court recognising the foreign judgment.

The JT dismissed the application on the basis that the DIFC Courts had issued a final and conclusive decision; there were no parallel proceedings in the "onshore" Dubai Courts and, as such, no conflict of jurisdiction. 

Marine Logistics Solutions LLC and another v Wadi Woraya LLC and others

The application related to enforcement of a London-seated arbitral award under the New York Convention before the DIFC Courts.

Marine Logistics filed the application to the JT, seeking an order from the JT determining which of the "onshore" Dubai or DIFC Courts were competent to make a determination on the validity of the arbitral award.

The JT dismissed the case on the basis that there were no parallel proceedings in the "onshore" Dubai Courts and, as such, no conflict of jurisdiction. Enforcement proceedings had only been initiated before the DIFC Courts.

In two later cases2, the JT clarified that parallel proceedings need to be substantive for a conflict of jurisdiction to arise.

In the above decisions, the JT made it clear that its mandate is limited to making a determination on the competent court when there is a "conflict of jurisdiction". A conflict of jurisdiction exists when there are parallel proceedings before the onshore "onshore" Dubai Courts and the DIFC Courts provided the two sets of proceedings are substantive (i.e. not relating to execution or injunctive relief).

2. Enforcement of domestic arbitral awards

The second category of decisions relate to the question of which court is competent to make a determination on the validity of a domestic arbitral award when enforcement is sought both before the DIFC and the "onshore" Dubai Courts.

Daman Real Capital Partners Company LLC v Oger Dubai LLC

Daman filed the application to the JT, seeking an order from the JT determining which of the "onshore" Dubai or DIFC Courts was competent to make a determination on the validity of a DIAC administered arbitral award.

The JT identified and confirmed the existence of a "conflict of jurisdiction" in this case between the DIFC Courts and the "onshore" Dubai Courts as enforcement proceedings had been brought before the DIFC Courts and, in parallel, annulment proceedings were filed before the "onshore" Dubai Courts and were still pending.

Although there was a clear connection with the DIFC as the Respondent and the project in question were based in the DIFC, the JT concluded that the "onshore" Dubai Court was the competent Court to make a determination on the validity of the arbitral award, and the DIFC Courts should cease from "entertaining the case".

The three DIFC Judges sitting on the JT dissented from the part of the ruling that the DIFC Court should refrain from entertaining the case.

Dubai Water Front LLC v Chenshan Liu

Dubai Waterfront filed an application to the JT, seeking an order from the JT determining which of the "onshore" Dubai or DIFC Courts were competent to make a determination on the validity of a DIAC arbitral award following the issuance by the DIFC Court of First Instance of a decision recognising the said arbitral award.

The JT identified and confirmed the existence of a "conflict of jurisdiction" in this case between the DIFC Courts and the "onshore" Dubai Courts as enforcement proceedings had been brought before the DIFC Courts and, in parallel, annulment proceedings were filed before the "onshore" Dubai Courts and were still pending. 

Despite the DIFC Court of First Instance decision to recognise the arbitral award, the JT followed Daman, ordering that the "onshore" Dubai Courts were competent and the DIFC Courts should "cease from entertaining" the matter because "the case should be decided by one of the two courts and not by both of them". It is assumed in this case there was no nexus with the DIFC in terms of seat, governing law, location of the assets or the location of the Respondent. In light of the Daman decision, it came as little surprise that the JT reached this decision. A similar approach was taken in Ramadan Mousa Mishmish v Sweet Homes Real Estate LLC where the claimant had again attempted to use the DIFC Courts as a "conduit jurisdiction" to enforce a domestic Dubai arbitral award.

Again, the three DIFC Judges dissented.

From the above decisions, it seems clear that attempts to use the DIFC Courts as a conduit jurisdiction will ultimately fail as the "onshore" Dubai Courts appear to be considered to have the "general jurisdiction" when it comes to the enforcement of domestic arbitral awards even when the case - like in Daman - has a clear connection with the DIFC.

3. Enforcement of foreign arbitral awards and foreign judgement

There were three decisions in which the JT considered cases relating to the enforcement of foreign arbitral awards and judgments: Marine Logistics Solutions LLC and another v Wadi Woraya LLC and others, Gulf Navigation Holding PJSC v DNB Bank ASA, Gulf Navigation Holding P.S.C v Jinhai Heavy Industry Co. Limited (Formerly Zhoushan Junhaiwan Shipyard Co., Ltd.), and Emirates Trading Agency LLC v Bocimar International N.V..  

However, only in one of the aforementioned decisions (Gulf Navigation Holding P.S.C (GNH) v Jinhai Heavy Industry Co. Limited (Formerly Zhoushan Junhaiwan Shipyard Co., Ltd.) (Jinhai)), did the JT find there was a conflict of jurisdiction which it needed to resolve. 

Jinhai related to the enforcement of a foreign arbitral award via the New York Convention (the seat was London). The governing law was English law.

In response to the DIFC Court application to recognise the award filed by Jinhai, GNH filed an application to the Dubai Centre for the Amicable Settlement of Disputes (which is a part of the "onshore" Dubai Courts) seeking appointment of an Expert to examine the issues even though they had already been decided in the arbitration.

The JT:

• identified and confirmed the existence of a "conflict of jurisdiction" between the DIFC Courts and the "onshore" Dubai Courts; and

• found that the "onshore" Dubai Courts were competent to hear the case, and that the DIFC courts should “cease to entertain” the recognition action pursuant to the "general principles of laws" embodied in the procedural laws and "since Dubai Courts have the general jurisdiction, then they are competent to hear the case".

It is noteworthy that the three DIFC Judges sitting on the JT dissented from the second part of the ruling that the DIFC Courts should refrain from entertaining the case on the following grounds:

GNH conceded to the jurisdiction of the DIFC Courts by not contesting it during the enforcement proceedings, not applying to set aside the decision recognising the award and in particular by applying to the DIFC Courts for a stay/postponement of the enforcement; 

• the reference to the principle of "general jurisdiction" of the "onshore" Dubai Courts implies that the Dubai Courts have precedence – there is no such principle in Dubai Law; and

• the statement that "this case is not similar to cases in which the courts apply the provisions of the New York Convention 1958 because the two courts are in one Emirate, viz. Dubai Emirate" is an incorrect statement of international law. The New York Convention allows an award to be enforced in different parts of a country.

4. Common threads

A number of points of principle or guidelines have emerged:

• In order to rely on the JT to make a finding on a conflict of jurisdiction, it is necessary for there to be substantive parallel proceedings in both the DIFC Courts and the "onshore" Dubai Courts.

• An acceptance of the DIFC or "onshore" Dubai Court's jurisdiction should prevent a party from subsequently being able to rely on the JT to dispute that court's jurisdiction.

• Where an arbitral award has no nexus with the DIFC (i.e. seat, governing law, location of a project/transaction, location of assets, location of party) it seems clear the successful party in the arbitration will not be able to use the DIFC Courts as a "conduit jurisdiction" to execute the award in onshore Dubai.

• The Daman case would suggest that even when a respondent, it's assets, and the subject-matter of the dispute is based in the DIFC, the DIFC Courts do not have jurisdiction to ratify the award if there are parallel proceedings in the "onshore" Dubai Courts seeking its nullification. However, it remains to be seen whether this will set a general principle or if Daman is a case that should be viewed on its own facts and circumstances.

• The Jinhai case would suggest it is possible to thwart enforcement of a foreign arbitral award pursuant to the New York Convention via the DIFC Courts for execution in onshore Dubai simply by starting substantive proceedings in the "onshore" Dubai Courts. This is even if the subject matter of the dispute has been determined by the arbitral tribunal.

• It has to be assumed that where the seat or governing law of an arbitration clause provides for DIFC law and a party seeks ratification of that award by the DIFC Courts for subsequent enforcement in onshore Dubai there will be no issues with the DIFC Courts assuming jurisdiction. However, as far as we are aware this proposition has not yet been tested before the JT. The references in some of the JT decisions to "the general jurisdiction of the Dubai Courts having precedence" may give rise to arguments to the contrary…


1 See our detailed analysis of the Daman v. Oger decision provided in our client alert "The DIFC Courts - a "conduit jurisdiction" no more?"

2 Cassation No 6 of 2017– Assas Investments Limited v Fius Capital Limited; Cassation No 8 of 2017–Assas OCP Limited v VIH Hotel Management Ltd.


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