DIFC Announces Consultation for Amendments to DIFC Law on Application of Civil and Commercial Laws in the DIFC

Dubai, UAE; 02 May 2024: Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, proposes to enact amendments to DIFC Law on the Application of Civil and Commercial Laws in the DIFC (the “Application Law”). The amendments seek to provide statutory certainty to the source of DIFC Law and how it may be interpreted.    

Jacques Visser, Chief Legal Officer at DIFC Authority, said: “Over the last twenty years, the DIFC has matured and developed into the leading global financial centre in the MEASA region. At the heart of this success is the adoption of common law in DIFC.  In particular, DIFC laws are supplemented with reference to English Common Law and interpreted in accordance with both English common law and the laws of other established common law jurisdictions.  The proposed amendments do not seek to change this approach but rather provide statutory confirmation, for practitioners and the Courts, regarding the source of law in the DIFC and the way in which DIFC legislation may be interpreted.”

Source of Law 

Since the inception of DIFC, it has been understood by practitioners that DIFC Laws are supplemented by, or “backstopped”, by English Common Law. DIFCA believes that it is necessary to provide statutory certainty as to the source and interpretation of DIFC law, especially as the DIFC often looks at global best practice on a much broader basis than what English statutory law provides for. Hence the proposed amendment.  

Proposed Amendments 

To address the Source of Law issue, a new Article 8A has been added to the Law of Application.  In summary, this provides that DIFC Law is to be determined first by reference to DIFC statute but that where a specific doctrine, cause of action, defence or remedy has not been expressly included in DIFC statute, the “gap” may be filled by English common law. The DIFC Court is expressly constrained by the requirements that the finding be appropriate, and subject to such modification and development as those circumstances require.  The DIFC Court is also precluded from relying on an English common law doctrine, cause of action, defence or remedy where it is expressly or impliedly excluded by a DIFC Statute. 

A new Article 8B has also been added to the Application Law to clarify that interpretation of DIFC statute may be guided by principles developed in respect of analogous laws in established common law jurisdictions. Additionally, if a DIFC Statute is based on an international model law, its interpretation may also be guided by international jurisprudence interpreting and applying the international model law, as well as interpretative aids and commentary published by international bodies regarding the international model law.  

The proposed amendments are intended to ensure that English Common Law, and developments in other established common law jurisdictions, continue to remain a central feature of the DIFC’s legal system. 

Further details about the proposed amendments can be found in Consultation Paper No 1. of 2024, available here. The consultation has been posted for a 30-day public consultation period with the deadline for providing comments ending on 1 June 2024.