DIFC Announces Enactment of Amendments to DIFC Law on Application of Civil and Commercial Laws in the DIFC and DIFC Real Property Legislation

Dubai, UAE, 21 November 2024: Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, has enacted amendments to DIFC Law on the Application of Civil and Commercial Laws in DIFC (the “Application Law”). The amendments provide statutory certainty to the source of DIFC Law and how it may be interpreted.   In addition, certain amendments have been made to the DIFC Real Property Law and Real Property Regulations.

Jacques Visser, Chief Legal Officer at DIFC Authority, said: “We are delighted to announce the enactment of key amendments to the DIFC Law on Application of Civil and Commercial Laws. These amendments reinforce DIFC’s status as an international common law jurisdiction and as the leading financial centre in the MEASA region. The amendments confirm that DIFC laws are supplemented with reference to English Common Law and the laws of other common law jurisdictions. These important amendments provide statutory confirmation, for practitioners and the Courts, regarding the source of law in DIFC and the way in which DIFC legislation may be interpreted.”

Law of Application

Source of Law

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

Amendments

To address the Source of Law issue, and further to public consultation, a new Article 8A has been added to the Application Law.  In summary, this establishes that DIFC Law is to be determined first by reference to DIFC statute, and DIFC Court judgments interpreting and applying DIFC statute. Then, as DIFC law is not intended to be strictly statutory, Article 8A provides that DIFC Statute is supplemented by the common law (including the principles and rules of equity). The DIFC Courts in determining the common law for DIFC may have reference to the common law of England and Wales and other common law jurisdictions. The enacted version of Article 8A has been modified from the consultation proposal, which made reference to importing specific common law doctrines, causes of action, defences and remedies, where appropriate, into DIFC Law. These changes clarify that the DIFC Courts, like any leading common law courts, have the power to consider comparative jurisprudence from a variety of jurisdictions in developing or modifying common law rules and principles of equity on a case-by-case basis, but that they do not have broader legislative or policy making powers.

A new Article 8B of the Law of Application confirms 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 amendments are intended to ensure that both English Common Law, and developments in other established common law jurisdictions, continue to remain a central feature of DIFC’s legal system.

Real Property Law and Regulations 

DIFC has introduced a Mortgage Registration fee of 0.25 per cent of the value of a Mortgage being registered by a purchaser of Real Property. This is in line with current onshore practice and will cover the administration required by the office of the Registrar of Real Property to review the documents and process registration. 
In addition, DIFC has extended the period of registration of Off Plan Sales from the current 30 day period to 60 days, to better accommodate the timetable for Off Plan Unit purchases, from launch stage to production of a final Off Plan Sales Agreement.  The extension provides purchasers of Off Plan Units more time to register such transactions and pay the Freehold Transfer Fee.

These amendments are intended to enhance the regulatory framework within DIFC, in line with best practice.

The Amendment Laws were enacted on 14 November 2024 and came into effect on 21 November 2024. The Laws can be accessed via DIFC’s legal database.