IP Litigation in the DIFC Courts

Author  Jens Cederskjold  Licence CC BY 3.0  Source Wikimedia Commons

 

Jane Lambert

The Dubai International Financial Centre ("DIFC") is a 110-hectare section of Dubai with its own common law legal system administered by English-speaking judges. Its legislation is based on the laws of England and Wales and other common law countries.  On 21 Nov 2019, the Ruler of Dubai enacted the DIFC Intellectual Property Law 2019, which I discussed in my Introduction to, and Overview of, the New DIFC Intellectual Property Law on 11 Dec 2019.  

One of the most interesting provisions of that enactment is the establishment of a Commissioner of Intellectual Property with power to resolve most intellectual property disputes quickly and cheaply.  I discussed the Commissioner's functions and responsibilities in DIFC IP Law Update on 24 Jan 2025.  However, there are likely to be cases that can best be decided by a judge.  These might include actions with complex facts or difficult points of law, claims that require an inquiry into damages or an account of profits or circumstances where justice might be defeated unless an interim injunction can be obtained quickly.  As the Innovation Hub and the AI Campus grow and develop, disputes are likely to arise that require the sort of robust judicial response that is available in London and Singapore.    

The DIFC Courts consist of a Court of First Instance, a Court of Appeal and a Small Claims Tribunal. The Court of First Instance is divided into 4 specialist Divisions, namely a Civil and Commercial Division, a Technology and Construction Division, an Arbitration Division and a Digital Economy Court.  Art 22 (2)  of DIFC Court Law 2004 enables the Court of First Instance to "order an injunction restraining a person from engaging in conduct or requiring a person to do an act or thing or other order the Court considers appropriate."  Art 36 (1) (a) of The Law of Damages and Remedies 2005 empowers the court to grant interim injunctions,

The Rules of the Dubai International Financial Centre Courts 2014 resemble the Civil Procedure Rules ("CPR") and contain many similar provisions, but they differ in several ways.  There is no equivalent to CPR Part 63 in the DIFC Court Rules, and the Courts' practice directions do not supplement Parts of the DIFC Court Rules.  Another important difference between IP litigation in the UK and in the DIFC Courts is that the DIFC Intellectual Property Law 2019 does not permit the DIFC Courts to revoke or declare invalid Gulf Co-operation Council or Emirati patents or other registered rights.  It is not yet clear whether the DIFC Courts would reach a similar decision to that of the Court of Justice of the European Union in Case C‑339/22, BSH Hausgeräte GmbH v Electrolux AB EU: C:2025:108, [2025] EUECJ C-339/22, [2025] WLR(D) 306, ECLI:EU: C:2025:108, 25 Feb 2025 where the Court believes such a patent or other IP right to be invalid.

The procedure for obtaining interim injunctions in the DIFC Courts is similar to that of England and Wales.   Applications are launched by an application notice supported by evidence in one or more witness statements, a statement of case verified by a statement of truth or the application notice itself.  A distinction is drawn in the timetable for exchanging evidence between applications that can be heard in less than 2 hours ("ordinary applications") and those that are likely to require more than 2 hours ("heavy applications").  Both appear to be treated as equivalent to "applications by order" in England and Wales.   As in those countries, an applicant for an interim injunction must undertake to the court to pay such damages as the court considers that the applicant should bear.  The court may order an applicant to give security for his or her undertaking.

The DIFC Courts Rules provide for freezing injunctions and search orders to be ordered in appropriate circumstances. The evidence supporting applications for such orders should be made by affidavit rather than in witness statements.   An independent legal representative with experience in executing similar search orders should supervise any search that may be ordered.  Such legal representative should report to the court on the execution of the order after such execution has been carried out.

There is no specialist intellectual property list in Dubai.  The Digital Economy Court probably comes closest. I mentioned that Division and its jurisdiction in DIFC IP Law Update 2025 on 25 Jan 2025. HE Justice Michael Black KC, one of my contemporaries at the Manchester Bar, has charge of that list.

Anyone wishing to discuss this topic should call me on +44 (0)20 7404 5252 during UK office hours or send me a message through my contact page at any time.

Why is there no longer a British IP Attaché to the Gulf Co-operation Council?

Author IJA Public Domain Source Wikimedia Commons

British EmbassyAbu Dhabi

 

Jane Lambert

The UK Intellectual Property Office has published a Linkedin newsletter called IPO Overseas,  It is about the UK's network of overseas IP attachés, trade experts and UK-based policy teams.  The latest issue, which was published on 26 July 2024, is entitled "IPO's Middle East and North Africa ('MENA') International Team.,  Although the subtitle is "How our IP Attaché network can help you do business with the Middle East and North Africa" the publication features an interview with  Ben Llewellyn-Jones, IPO’s Director of Business and International Policy and not with an attaché.

The British government used to have an attaché to the Gulf Cooperation Council ("GCC"), On 27 Oct 2021 I wrote that HM government signalled the importance of the GCC as a trading and investment partner by appointing Yamish Yakoob as its first Intellectual Property Attaché to the bloc in UK's New Intellectual Property Attache to the GCC.  I based my article on the IPO's Case Study IP Attaché: Yamish Yakoob, Gulf Cooperation Council of 7 Oct 2021 which was apparently withdrawn on 27 March 2024.  No explanation has been given for the withdrawal.  Mr Yakoob is still at the British embassy in Riyadh but his new job title is "Retail, Food & Drink @ British Embassy." His LinkedIn page indicates that he started that job in April 2024.

In his interview, Mr Llewellyn-Jones said that the GCC is this country's 4th largest non-EU trading partner after the USA, China and Switzerland and that British trade with that region is worth around £59 billion.  He indicated that the government is negotiating a free trade agreement with the GCC.  He mentioned that UK businesses can face a number of challenges when registering and protecting their IP in the Middle East. These can range from the need to take effective action against trade mark infringement to high registration fees.

Mr Llewellyn Jones encouraged British businesses to use the IPO's international team: The team knows that local IP systems can be difficult for some to navigate even if a business has registered its IP in the UK with the IPO. He said:

“This is where our international team can help with their local knowledge”, said Ben. “We can help to guide businesses through these IP systems, guide you through what to expect and support you as you build your business overseas”

His top tips were:

• "If you're looking to trade in MENA and the GCC, include IP as part of your market research or export plan
• Do your due diligence and check, for example, if someone already registered a trade mark that is the same as yours. If you're not sure, we'll have a complex portfolio of IP rights and legal experts who will be able to help you.
• Finally, if your IP is an important part of your business value, register your rights as soon as you can!"

The British government has published further guidance and information on doing business and the IP issues that arise in the Middle East which is not linked directly to the IPO's newsletter.   However, I incorporated that guidance and information and combined it with my own in IPO Guidance on the Gulf Cooperation Council on 8 April 2023.

One resource that the IPO does not mention and perhaps should is that there are English-speaking common law courts in Dubai, Abu Dhabi and Qatar.  Each of those courts has judges who practised in the UK or other Commonwealth common law jurisdictions and all members of the Bar of England and Wales can qualify easily to appear before them.  If a British company is thinking of licensing its technology, distributing its goods or franchising its services in the region it may find advantages in choosing the law of one of those legal systems as the proper law and its courts as the forum for future dispute resolution. 

This is an area in which my chambers have some expertise.  Colleagues who practise other areas of law already appear before those courts.  Last year, Stephen Somerville, our first deputy senior clerk visited Dubai and he has been sufficiently encouraged by that visit to make a second trip later this year.   Anyone interested in using our expertise and connections should contact me on +44 (0)20 7404 5252 during UK office hours or send me a message at other times through my contact page.

Expo 2020 Dubai Association Rights

Author SumikashaC Licence CC BY-SA 4.0 Source Wikimedia 

Jane Lambert

Expo 2020 Dubai opened on 1 Oct 2021. It should have taken place between 20 Oct 2020 and 10 April 2021 but, like the Tokyo Olympics, it was postponed for a year because of the pandemic.  As it happens, International Expos have a lot in common with the Olympic Games. They attract visitors from all parts of the world. They require lavish sponsorship.  They are regulated by ithe Bureau International des Expositions much in the way that the Games are regulated by the International Olympic Committee.

Like the Olympics and other major sporting events, their funding is vulnerable to ambush marketing.  The booklet, Expo 2020 Dubai Brand Protection Guidelines, describes ambush marketing as "the act of creating a false or unauthorized association with an event, whether intentional or not." It effectively gives worldwide publicity to the ambushers for nothing.

The right to associate with a major sporting event or Expo is called an "association right" and it is regarded as an intellectual property right (see para 16.1 (6) of the Part 63 Practice Direction).  I discussed the legislation that protected the rights of the International Olympic Committee and the London Organizing Committee in Olympics Association Right and London Olympics Association Right on 31 July 2012 in NIPC Law.  Similar legislation has been enacted for the Commonwealth Games in Birmingham in 2022 which I mentioned in Guidance on Birmingham Commonwealth Games Association Right on 10 Aug 2021 in NIPC West Midlands.

The marks that are protected in the United Arab Emirates include the composite word and device marls of the Bureau International des Expositions and Expo 2020 Dubai. Images of those marks appear on pages 11 to 13 and 16 of the booklet. The booklet suggests that neither the Emirati nor the Dubai government has enacted special legislation to protect those marks or association rights. The intellectual property rights that are mentioned on page 19 are trade marks and copyright. I discussed the relevant legislation in UAE Trade Mark Law on 30 May 2013 and copyright and related rights on 4 Jan 2012 and 11 Feb 2012.

The booklet does not mention the courts in which infringement proceedings would be brought. It is assumed that these will be the civil courts in Dubai. As an intellectual property law has been enacted for the Dubai International Financial Centre. it may also be possible for sponsors to seek relief in the Centre's English speaking common law courts (see  Introduction to, and Overview of, the New DIFC Intellectual Property Law 11 Dec 2019).  An advantage of that jurisdiction is that the DIFC provides a remedy for passiong off (see The DIFC Law of Passing-Off  7 April 2012).

Changing the subject, almost every country in the world seems to be represented with its own pavilion in Dubai including very small states such as Monaco and the Holy See.  The British pavilion seems particularly lavish.   A day ticket to the Expo costs 95 UAE dirhams which is just under £20 and children, students, seniors and "people of determination" get in for free.  That compares very favourably to the Roman remains in Bath, an important tourist attraction in this country. 

Anyone wishing to discuss this article can call me on  +44 (0)20 7504 5252 during office hours or send me a message through my contact form. 

Dubai's Courts of the Future Initiative

Author A Vahanvaty
Licence Creative Commons Attribution-Share Alike 2.0 Generic
Source Wikipedia

Jane Lambert

The Dubai Future Foundation is an initiative of the Dubai government to chart the economic, social and cultural future of Dubai. Its initiatives include artificial intelligence and robotics, autonomous transportation, blockchain technology, three-dimensional printing and pilotless aircraft. Each of those technologies is likely to lead to legal issues which are mentioned briefly in the topics section of the Courts of the Future website.

Those issues will have to be resolved in Dubai as they will in the rest of the world and the body that seeks to address those issues in Dubai is the Courts of the Future Forum. This is a panel of 13 lawyers and other experts from around the world including two members of the English bar and partners of Bird & Bird. The acting chief executive and chief operating officer of the Dubai Future Foundation also sit on that panel as does the co-chief executive and registrar-general of the Dubai International Financial Centre Courts (an English speaking common law jurisdiction in the Dubai International Financial Centre which I first discussed in DIFC Courts 7 Jan 2011 J D Supra).

The terms of reference of the Courts of the Future Forum are set out in its charter. Art 1.2 of that charter provides that the purpose of the forum is to advise the courts about:

"(a) the current performance and reputation of the Courts as perceived by the Forum members in relation to handling of the disputes of the future;
(b) the strategic direction required for the Courts to maintain and improve their knowledge, performance and reputation regarding future IP, construction, technology and other related disputes;
(c) developments and trends in the arena of international dispute resolution which may have an impact on the DIFC Courts and its operation and which, if adopted, might benefit the DIFC Courts and its users in resolving disputes of the future."

While its recommendations will be addressed to the DIFC courts, they are likely to be relevant to court services everywhere including, in particular, the Business and Property Courts of England and Wales which were the model for the DIFC courts (see Jane Lambert Launch of a Judicial Super Highway?  12 July 2017 IP Northwest).

The forum has drafted a model Part 40,000 for the DIFC Court Rules which are based on our Civil Procedure Rules.  A footnote explains that the number 40,000 was chosen for the Part because:

"40,000 km/h is the speed at which an object must travel in order to break free of a planet’s gravitational pull."

An introductory paragraph states:

"The founding principles for the Courts of the Future are explained here through an imagined set of rules for processing claims in a new specialist division of a court. This division would be designed to support companies developing new technologies, sectors and applications – from blockchain to 3d printing. The rules include details of how the court itself could use these technologies, for example there is an artificial intelligence for adjudicating small claims. It is the kind of division that this Forum aims to create."

Rule 1 of that Part declares that it applies to Court of the Future claims ("COF claims").  Rule 3 provides:

"A claim may be issued as a COF Claim if it:

(a) involves issues or questions of technical complexity, or 

(b) has no or no single physical geographical nexus, or

(c) the proceedings are likely to involve multiple parties from different jurisdictions.

 The following are examples of the types of claim which may be appropriate to bring as COF Claims, but are not exhaustive and other types of claim may be appropriate to this specialist division:

(1) claims involving international commercial chain transactions;

(2) claims relating to liability for the acts or omissions of artificial intelligence, software or any devices or components of devices whether integrated or not that are dependent on or controlled by such software including, but not limited to autonomous or semi-autonomous vehicles;, medical devices and types of industrial and domestic equipment;

(3) claims involving issues of cyber security in respect of data and/or assets stored online;

(4) claims relating to competition and/or anti-trust issues in respect of online assets or currency;

(5) claims involving online intermediaries and/or online platforms or marketplaces;

(6) claims relating to online peer to peer transactions;

(7) claims relating to online blockchain transactions;

(8) claims relating to 3D printing;

(9) claims relating to or arising out of extraterrestrial activity or territories;

(10) intellectual property claims arising out of or in relation to any of the above claims;

(11) any combination of the above claims;

(12) insurance claims in relation to any of the above claims; and

(13) challenges to decisions of arbitrators in COF disputes."

 The Part has 12 rules as follows:

1 General
2 Specialist division
3 Definitions
4 Rules
5 Joinder
6 Interim Payment
7 Enforcement
8 Record Keeping
9 Processing of personal data
10 Data confidentiality and security
11 COF Practice Direction
12 Micro Disputes Practice Direction

The rules on enforcement and micro disputes are particularly interesting.  Litigants will be required to give details of their blockchain accounts and judgments will be enforced instantaneously via smart contracts.  Micro disputes (that is to say those under US$50,000 where there is no dispute of fact and neither party is a corporation will be determined by computer.

All thought-provoking stuff which will interest judges. lawyers. court administrators and business people everywhere. Should anyone want to discuss this article, he or she should call me on +44 (0)20 7404 5252 during normal business hours or send me a message through my contact form.

Enforceability of Shareholder Agreements in the DIFC: Smartpaper Software LLC v Keross LLC and Another

This case which came before Sir John Chadwick in the Court of First Instance of the Dubai International Financial Centre is of interest of practitioners outside Dubai because the enactments that the judge considered are modelled on Acts of the United Kingdom Parliament and the contract that the claimant company sought to enforce was one that could easily have been concluded by entrepreneurs anywhere.

In Smartpaper Software LLC  v Keross LLC and Another CFI 012/2010 14 Sept 2014 the claimant sued for damages for breach of a shareholders' agreement to which neither the claimant nor the first defendant were party. The agreement, which is described as a “Final and Binding Shareholder Agreement for Selling Membership Interests of Keross LLC” (the “first defendant”) for the stated purpose of working together in an orderly and transparent way to effectuate the sale of all membership interests owned by two parties to the agreement respectively to the second defendant, provided for the first defendant to transfer certain assets and liabilities to a new company to be formed. The claimant, which was incorporated 3 months after the shareholder agreement, claimed to be that new company. It alleged that the defendants had failed to transfer those assets and in particular certain contracts to it. The value of those contracts was the sum claimed in damages.

The action came on for trial before Sir John on 22 Feb 2012, He formed the preliminary view that the claimant was unlikely to succeed for the following reasons:

1. The claimant was not party to the shareholder agreement.
2. The first defendant was not party to that agreement.
3. The proposed transfer was unlawful under art 46 of the DIFC Companies Law unless the case could be brought within one of the exceptions under art 46 (1).
4. The particulars of claim no longer disclosed a cause of action as certain paragraphs alleging malice had been struck out by Sir David Steel shortly before the trial.

The judge invited the claimant to address him on those points before calling evidence. The claimant's representative, who was one of the parties to the agreement, failed to persuade Sir John who dismissed the claim under RDC Part 24 which appears to be modelled on Part 24 of the English and Welsh Civil Procedure Rules. The judge indicated that he would put his reasons in writing which were published on 11 Sept 2014.

In his reasons the judge modified his view on the first ground. The claimant relied on art 104 (1) and (3) of the DIFC Contract Law which is modelled on s.1 (1) of the British Contracts (Rights of Third Parties) Act 1999:

"104 Right of third party to enforce contractual term
(1) Subject to the provisions of this Law, a person who is not a party to a contract (a ‘third party’) may in his own right enforce a term of the contract if

(a) the contract expressly provides that he may; or
(b) subject to Article 104(2), the term purports to confer a benefit on him.

(2) Article 104(1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.
(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into."

The shareholder's agreement provided:

“In consideration for Sami and Khaled selling their respective interests to Farouk, Keross LLC shall transfer the ownership of specific assets and liabilities (the ‘Consideration’) to a new legal company (the ‘New Entity’) to be incorporated by Sami and Khaled.”

At paragraph 11 of his reasons the judge said:

"It seems to me reasonably clear that the “New Entity” is a person on whom the relevant term purports to confer a benefit within the meaning of Article 104(1)(b) of the Contracts Law; and that it cannot be said – for the purposes of Article 104(2) – that the parties did not intend that that term should not be enforceable by the New Entity. It is also clear that SCS is not “expressly identified” in the Shareholder Agreement by name or as a member of a class for the purposes of Article 104(3). The question is whether SCS is expressly identified “as answering a particular description”: that is to say, whether SCS can be identified as the “New Entity”?"

The judge did not decide the point as the claim failed on other grounds. However, he said at paragraph 12:

"In the circumstances that I have reached the conclusion, on other grounds, that the claims advanced by SCS in these proceedings have no prospect of success and should be dismissed, I am content to assume (without deciding) that SCS can be identified as the “New Entity” for the purposes of article 104(3) of the Contracts Law."

Similarly, he made no finding on the second point as the particulars of claim  had alleged that the first defendant was party to the shareholders' agreement through the agency of their directors and shareholders. At paragraph 15 he said:

"Given that [the first defendant] has taken no part in these proceedings – and in the absence of any allegation of agency to support the assertion in the Particulars of Claim that it “came to an agreement” – I would be reluctant to hold that [the first defendant] must be treated as a party to the Shareholder Agreement. In the circumstances that I have reached the conclusion that, having regard to Article 46 of the DIFC Companies Law, the claims in these proceedings have no prospect of success, it is unnecessary to decide the agency point; and I do not do so."

However, he held that the transaction was unlawful having regard to art 46 of the Companies Law which prohibits companies from providing financial assistance to acquire shares in that company or its holding company unless the transaction falls within one of a number of exceptions. Further, as the parts of the particulars of claim alleging malice had been struck out there was no longer a cause of action.

Because the case was decided by a former Lord Justice of the Court of Appeal and the enactments are modelled on English statutes this case is of persuasive authority in the United Kingdom and other jurisdictions with similar laws. It is a pity that the judge did not decide the privity and agency points but he has uttered some useful dicta.  The issues raised in this case should be borne in mind by those who negotiate and draft shareholders' agreements in England as well as the DIFC,

Angels in Dubai

According to its website, Envestors Dubai is the only active business angel network in the region. Angel investment is not entirely new to the Middle East and North Africa or even to the Gulf Co-operation Council region. I wrote a short piece about Angels Den in Qatar on 26 Sept 2011.

For those who are still unfamiliar with the concept I defined a business angel on the Inventors Club website as "a wealthy individual who wishes to invest in a new business." Typically, he or she may well have already built up and sold a business and will therefore have acquired skills, knowledge and experience that can be shared with the new business. Some angels invest as individuals and others as members of syndicates.   In the UK an investment can fall anywhere between £10,000 and 750,000.  I wrote a little primer on angel investment for my former chambers website in "On the Side of the Angels" on 8 July 2011.

Envestors Dubai appears to be the trading name of Envestors MENA Ltd. which is a member of the Braveheart Investment Group plc of Perth in Scotland.  Braveheart was formed in 1997 and manages around £120 million.  It offers equity, loan and mezzanine funding to SME as well as advice on corporate finance and investment readiness. For more information on that country and Envestors see "Envestors to operate YABA" in my IP Yorkshire blog (13 April 2013).

Envestors Dubai claims to have met and advised over 1,000 companies in the last 3 years, and have selected about 20 to take forward and present to its investors, of which approximately 50% have been funded.   A profile of the company's investors appears on the "Our Network" page of its website, The investment opportunities on offer are on the "Current Deals" page.

Anyone looking to invest and indeed anyone seeking angel investment will require advice on company law, contracts, employment, tax and, of course, intellectual property. I can help with IP and I have written a short article "What Business Angels and VCs need to know about IP" which can be downloaded from the JD Supra website. Parties to a licence, joint venture, shareholders' agreement or other transaction can write their contracts in English, choose to govern them according to DIFC law (which is based on the common law) and to refer any disputes to an English speaking common law court with a judge from the United Kingdom or other common law country by inserting a Dubai International Centre Courts jurisdiction clause (see "DIFC Courts: Choice of Jurisdiction Clauses" 28 Dec 2012).

If you want to talk to me about this article, you can reach me through my contact form or call me on any of the above numbers. You can also follow me on Facebook, Linkedin, twitter or Xing.

DIFC Courts Code of Best Professional Practice

On 27 March 2013 the Dubai International Financial Centre ("the DIFC") Courts published a Code of Best Legal Professional Practice (the "Code"). According to the Foreword by the Chief Justice, Michael Hwang SC, the Code has no statutory or regulatory underpinning just yet but the provisions relating to litigation will be incorporated into the Code of Professional Conduct for Legal Practitioners (Practice Direction No. 2 of 2009). Moreover, the courts will regard the Code as a benchmark for behaviour and professional standards and any "failure by a DIFC lawyer or a DIFC firm to behave in accordance with the Code is likely to have consequences for that lawyer or firm in the event that such conduct becomes relevant to any case or hearing that comes before the DIFC Courts."

The Code applies to those who appear as advocates before the courts as well as those who conduct legal business in the DIFC and covers non-contentious as well as contention work  The Chief Justice says that the Code is

"based on established professional conduct rules drawn from different jurisdictions. It has been the subject of review by those who practise in the UAE. It has also been the subject of public consultation."

It certain;y seems to have drawn heavily on both the Code of Conduct of the Bar of England and Wales and the SRA Code of Conduct.

Should anyone require wish to discuss this article he or she can call me on +44 (0)20 7404 5252 or get in touch through my contact form. You can also follow me on Facebook, Linkedin, twitter or Xing.

Enforcing DIFC Judgments in England and Vice-Versa

On 23 Jan 2013 Mr Justice Cooke, the judge in charge of the English Commercial Court, and Mr. Michael Hwang SC, Chief Justice of the DIFC Courts, signed a Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales copies of which are on the English Judiciary and DIFC Courts websites.

The DIFC Courts

Paragraph 5 of the memorandum describes the DIFC Courts as follows:

"The DIFC Courts form part of the legal system of the United Arab Emirates, albeit that this memorandum only states the position as it applies to the DIFC Courts. They deal with civil and commercial disputes which are connected to the Dubai International Financial Centre or in respect of which the parties have agreed that the DIFC Courts should have jurisdiction. The DIFC Courts consist of a Small Claims Tribunal (SCT), a Court of First Instance and a Court of Appeal. They were established by Dubai Laws 9 and 12 of 2004 and operate as a common law court, applying the highest international standards of legal procedure. The Courts’ judiciary is selected from common law jurisdictions around the world and from Dubai and enjoy the highest international renown."

I have already written quite extensively about the DIFC Courts. Readers are referred in particular to my article "DIFC Courts" 7 Jan 2011 on JD Supra and my posts "The Legal Order of the United Arab Emirates" 12 Nov 2011, "DIFC Court: Corinth Pipeworks SA v Barclays Bank Plc" 20 March 2011, "DIFC Courts' Jurisdiction: Corinth Pipeworks Appeal Allowed" 25 Feb 2012, "DIFC Courts Spread Their Wings" 7 Dec 2011 and "DIFC Choice of Jurisdiction Clauses" 28 Dec 2012 in this blog. 

The Commercial Court

Paragraph 4 describes the Commercial Court as

"a specialist court within the Queen’s Bench Division of the High Court of England and Wales. It deals with complex cases arising out of business and financial disputes, both national and international, which fall within its jurisdiction. It was established as a separate court within the Queen’s Bench Division by section 3 of the Administration of Justice Act 1970 (now section 6(1)(b) of the Senior Courts Act 1981), although a specialist Commercial List had operated since 1895 for the hearing of commercial cases, to which specifically designated judges with commercial experience were assigned. The Court is internationally recognised for its experience and expertise in commercial dispute resolution."

Readers who wish to know more about the Commercial Court and its practice are referred to the 9th edition of The Admiralty & Commercial Courts Guide.

Status of the Memorandum

The memorandum is not a treaty or legislation.and it makes clear that there is no treaty between the governments of the United Kingdom and the United Arab Emirates whereby British judgments may be enforced in the UAE or Emirates' judgments in the UK.    The memorandum has no legal effect, it is not binding on the judges of either party, it does not supersede any existing laws, judicial decisions or court rules, it is not intended to be exhaustive or to create or alter any existing legal rights or relations.   Its purpose is simply to set out the parties’ understanding of the procedures for the enforcement of money judgments of one party in the courts of the other.

How to enforce Judgments

In both legal systems, judgments of the other party may be enforced as a debt in accordance with the following principles.   It is important to stress that these principles are not confined to the parties' judgments.   They apply equally to the judgments of any foreign court where there is no treaty for the enforcement of judgments between the UK (or as the case may be UAE) and the foreign jurisdiction.

Where a foreign court of competent jurisdiction has determined that a certain sum is due from one person to another, a legal obligation arises on the debtor to pay that sum.  The judgment must be final and conclusive, though it may be subject to appeal.   A foreign court is considered to have competent jurisdiction where the judgment was against a person:

(a)   who was present within its jurisdiction when the action began;

(b)   started proceedings or counterclaimed in the foreign court;

(c)   submitted to the jurisdiction of the foreign court; or

(d)   agreed to submit to the jurisdiction of the foreign court before proceedings began.

There are, however, some foreign debts that cannot be enforced in this way such as taxes, fines and other penalties.

Procedure for enforcing a DIFC Judgment in England

Paragraph 21 of the memorandum provides that n order to enforce a judgment of the DIFC Courts in the Commercial Court, a party must issue a claim form in the Commercial Court, providing a concise statement of the nature of the claim and claiming the amount of the judgment debt. A certified copy of the judgment should be exhibited to the claim form.  A certified copy of a DIFC Court judgment may be obtained by making a without notice application to the DIFC Courts exhibiting a copy of the judgment which is to be certified. The certified copy will be endorsed by a certificate that it is a true copy, signed by a judge or registrar and sealed with the seal of the DIFC Courts.   In most cases a judgment creditor will be entitled to summary judgment under CPR Part 24 unless the debtor can persuade the court that the judgment was obtained by fraud, it was contrary to public policy; or the proceedings were conducted in a manner which the Commercial Court regards as contrary to the principles of natural justice.

Procedure for Enforcing an English Judgment in the DIFC

The DIFC procedure is very similar to that of the Commercial Court.   The Rules and forms of the DIFC Courts are very similar to the those of the English courts.   In particular, Part 24 of the of the Rules of the DIFC Courts  which provides for immediate judgment is similar to CPR Part 24.

Further Information

On 11 Feb 2013 I was invited to join 4-5 Gray's Inn Square which is one of the leading sets of the English bar with expertise not only in intellectual property but also arbitration and alternative dispute resolution, chancery, commercial, construction. tax and other areas of work that fall within the jurisdiction of the DIFC courts.   This connection should enable me to expand my practice in the Gulf and to facilitate a more comprehensive service to clients in that region.   Should anyone wish to discuss this article or any other legal matter connected with the Gulf he or she should call Stephen Broom on +44 (0)20 7404 5252 or use my contact form.   He or she can also follow me on Facebook, Linkedin, twitter or Xing..

DIFC Courts: Choice of Jurisdiction Clauses

In DIFC Courts Spread Their Wings, 7 Dec 2011, I discussed the amendment to art 5 (2) of Law No. 12 of 2004 which extended the DIFC's courts' jurisdiction to any dispute that the parties might refer to them.
Practice Direction No. 2 of 2012 DIFC Courts' Jurisdiction suggests the following choice of jurisdiction clauses.

If the parties want the DIFC courts to have exclusive jurisdiction, they can use the following words for future disputes:

"Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be subject to the exclusive jurisdiction of the Courts of the Dubai International Financial Centre.
This contract shall be governed by and construed in accordance with the law of [INSERT PLACE]."

Or this formula for existing disputes:

"A dispute having arisen between the parties concerning [DEFINE DISPUTE], the parties hereby agree that the dispute shall be subject to the exclusive jurisdiction of the DIFC Courts.
The governing law of this agreement shall be the law of [INSERT PLACE]"

If they want to confer non-exclusive jurisdiction they can choose the following clause:

"Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be subject to the non-exclusive jurisdiction of the Courts of the Dubai International Financial Centre.
Each party irrevocably submits to the jurisdiction of the DIFC Courts and waives any objection it may have to disputes arising out of or in connection with this contract being heard in the Courts of Dubai International Financial Centre on the grounds that it is an inconvenient forum (forum non conveniens).
This contract shall be governed by and construed in accordance with the law of [INSERT PLACE]."

Should anybody require further information he or she can call me on +44 (0)161 850 0080 or email me through my contact page. You can also follow me on Facebook, Linkedin, twitter or Xing..

Why has no IP case come before the DIFC Courts?

In the 6 years of their existence the DIFC (Dubai International Financial Centre) courts have never actually had an intellectual property case. That is not because intellectual property falls outside their jurisdiction.  Arts 37 and 38 of the Centre's Law of Obligations (Law No 5 of 2005) codify the common law rules of confidence and passing off (see "The DIFC Law of Confidence" of 27 Jan 2011 and "The DIFC Law of Passing Off" 7 April 2011).

One possible reason why there have been no intellectual property cases in the DIFC courts is that patents and designs are about goods rather than services   There have been a few IP cases involving financial institutions in the UK such as HFC Bank plc v Midland Bank plc [2000] FSR 176 and  Cantor Fitzgerald International v Tradition (UK) Ltd  (2001) 24(9) IPD 24057, [2001] EWCA Civ 942 but they have been about branding and computer software. Another possible reason is that piracy and counterfeiting are dealt with by customs or other autoritties in the UAE.

There may be more scope for intellectual property litigation as a result of the DIFC Court of Appeal's decisions in Corinth Pipeworks SA v Barclays Bank Plc and Al Khorafi and Others v Bank Sarasin-Alpen (ME) Limited and Another and Law No 16 of 2011.   These cases were about torts that occurred outside the DIFC where the defendant was a "Centre Establishment".  If a business established or carrying on business within the DIFC infringes an intellectual property right anywhere in the UAE it should be possible to sue it in the Centre.  If the parties to a licence or other agreement relating to intellectual property rights can be sure of an English speaking common law forum (as they now can thanks to Law No 16 of 2011) they may well be tempted to choose DIFC law and the DIFC courts in their choice of law and jurisdiction clauses.

Part 25 of the  Rules of the DIFC Courts provide all the interim remedies that are available under the Civil Procedure Rules including search orders and freezing injunctions. The forms and procedure are very similar to those of the Chancery Division in England.

Should anyone wish to discuss this topic further he or she can call me on +44 161 850 0080 or fill in my contact form. He or she can also contact me through Facebook, Linkedin, Xing or twitter.

DIFC Courts Spread Their Wings

In the DIFC Court I wrote about the 45 hectare free zone in Dubai known as the Dubai International Financial Centre ("DIFC") and the special English speaking common law jurisdiction within the Centre aptly described by its present Chief Justice Michael Hwang SC as a "common law island in a civil law ocean" (address to Lawasia Conference, Kuala Lumpur 1 Nov 2011) which has contributed greatly to the DIFC's success.

When I wrote that article in January 2011 the court's jurisdiction was limited by art 5 of Law No 12 of 2004 to disputes relating to the DIFC. The practical effect of this limit was shown by Sir Anthony Colman's decision in Corinth Pipeworks S.A. v Barclay's Bank PLC of 8 Feb 2011 which I discussed in my case note of 20 March 2011. In that case the court refused to entertain an action arising out of an allegedly false statement by an employee of the defendant bank made within Dubai but outside the Centre on the ground that it had no connection with the DIFC.

By a decree dated 31 Oct 2011 HH Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai who is also Vice-President and Prime Minister of the United Arab Emirates, has extended the DIFC courts' jurisdiction to cover any business dispute from any part of the world (see the DIFC courts' press release of 31 Oct 2011).

The significance of this announcement is that it should shortly be possible to resolve a much wider range of cases, including intellectual property licensing and maybe even some infringement disputes, before an English speaking common law tribunal applying rules of procedure modelled on the Civil Procedure Rules. Since the UAE is party to a number of international and regional agreements on the enforcement of judgments it may be possible to refer cases from other parts of the Middle East or North Africa. Clearly the parties have to consent to the jurisdiction of the DIFC courts unless they come within its jurisdiction on some other ground. No doubt that can be done by a choice of jurisdiction clause specifying the DIFC courts in a licence or other agreement.

Should anybody wish to discuss this article or the topic in general he or she should not hesitate to contact me on +44 161 850 0080 or complete my on-line contact form.

Background Reading

Jane Lambert "The Legal Order of the United Arab Emirates" 11 Nov 2011

Sir Anthony Evans "Dispute Resolution in the DIFC" 16 Feb 2009 (DIFC website)

Sir Anthony Evans "Dispute Resolution in the DIFC" Oct 2008 (DIFC website)

Michael Hwang SC "The Courts of the DIFC - A Common Law Island in a Civil Law Ocean" (DIFC website)

Jane Lambert "DIFC Courts" 7 Jan 2011 (JD Supra website)

Dubai: Consultation on Proposals to amend the Rules of the DIFC Court

As I said in my introduction to the DIFC Court, the Dubai International Financial Centre ("DIFC") has its own court. This is a special common law jurisdiction with its own legislation. I have already discussed the Centre's laws of confidence and passing off in this blog.

The Rules of the DIFC Court ("RDC") appear to be based on our Civil Procedure Rules ("CPR"). They share, for example, the same overriding objective and terminology. For instance, claims are brought by claimants and not by plaintiffs.

On 20 April 2011 proposed a number of amendments to the RDC following extensive discussions with the Rules Sub-Committee of the Court Users Committee. Details of the proposed rule changes can be viewed here. Many of these proposed changes will facilitate electronic filing of court documents.

The consultation ends on 23 May 2011. Responses should be emailed to consultation@difccourts.ae

DIFC Court: Corinth Pipeworks SA v Barclays Bank Plc

In the introduction to my leaflet on the Dubai International Financial Centre Courts (which may be downloaded from the JD Supra website) I wrote:

"The governments of the United Arab Emirates and Dubai have established a free zone for financial services in Dubai known as the Dubai International Financial Centre ("the DIFC") in the hope that it will become a major financial centre to rank alongside London, New York, Tokyo and Singapore. According to KPMG the DIFC already ranks 7th in its list of the world's leading financial centres.

One of the reasons for the DIFC's success is a special jurisdiction in the zone with its own laws and law courts. Although Dubai and the UAE are civil law jurisdictions and their official language is Arabic the laws of the DFIC are in English and based largely on UK statutes and the English common law.

The DIFC courts conduct their business in English. Their rules and procedure are based on the English Civil Procedure Rules. Most of the judges of the DIFC courts come from England and Wales or other Commonwealth countries. Most counsel and solicitors from England and Wales can qualify to practise before the DIFC Courts quite easily.

In CFI 024/2010 Corinth Pipeworks S.A. v Barclay's Bank PLC (8 Feb 2011) a Greek company carrying on business in Athens tried to extend the jurisdiction of the DIFC court to a cover any claim against an entity with a branch within the DIFC. The cause of action arose out of an allegedly false statement by an employee of the Jebel Ali branch of Barclays Bank. Jebel Ali is, of course, in Dubai but it is outside the DIFC. However, Barclays does maintain a branch in the Centre. It was on the strength of the Bank's presence in that zone that the claimant launched its action.

The defendant Bank applied for a declaration that the DIFC Court had no jurisdiction in this action under rule 12.1 of the Rules of the DIFC Court (the equivalent of CPR 11.1). The application came on before Sir Anthony Colman, Deputy Chief Justice of the DIFC Court.

Sir Anthony summarized the claimant's case as follows at paragraph [53]:

"The argument in favour of that jurisdiction is very simple. When by the process of registration of a business and the granting of the necessary licenses a Centre Establishment is created, it is the entire corporation body to which that registration and those licenses are granted because the process involves registration and grant in the name of that corporation alone and not in the name of any other exclusively DIFC legal person. Moreover, when the corporation enters through its DIFC branch into a commercial transaction it is the corporation as a whole that does so. Therefore, a dispute arising out of a transaction entered into by a branch of the corporation located outside the DIFC is as much a dispute involving a Centre's Establishment as a dispute arising out of a transaction entered into by a branch of that same international corporation authorised to carry on business within the DIFC."

His lordship remarked that "the argument advanced on behalf of the Claimant would, if correct, have potentially far-reaching consequences." He added:

"Many members of the legal professional conversant with the DIFC and its Courts would assume that, given that the purpose of the Court was to provide a dispute resolution facility for the DIFC and with regard to transactions associated or connected with it or the commercial enterprises carrying on trade within the DIFC, an international company with a branch licensed to carry on business in the DIFC would be confined to bringing claims within the DIFC Courts in respect of disputes connected with the business of that branch in the DIFC. The suggestion that an international company incorporated and having its head office in, say, the United States or the United Kingdom, but with a branch registered and licensed to do business in the DIFC, could start proceedings in the DIFC Courts or could be sued in that Court in respect of a claim wholly unconnected with the DIFC or the business of its DIFC branch would, on the face of it seem distinctly improbable. Were that so, the scope of jurisdiction of the DIFC Courts would have an international dimension which had not hitherto been generally perceived."

Allowing the application and striking out the claim the judge had no doubt that the claimant's argument was fundamentally defective. The flaw lay in

"according to the entire business of the corporation that characteristic which only the DIFC-authorised part of the business has. The fact that all the branches of the corporation may be part of a single legal person with a single corporate name emphatically does not result in all the branches of the corporation being part of a Centre's Establishment. The international corporation is a Centre's Establishment only to the extent to which its branch is authorised to conduct business in and from the DIFC and a claim or dispute only "involves" a Centre's Establishment when that claim or dispute is connected with or arises out of the activities of the corporation conducted by its DIFC branch or division. The requirement that the corporation as a whole must be a party to the proceedings and in its corporate name is simply a procedural consequence of its branch or division having no separate legal personality by which it can sue or be sued. What matters as regards jurisdiction under Article 5(A)(1)(a) is that it is with the conduct of the DIFC-authorised business that the cause of action is connected. The function of the DIFC Courts is to provide a justice system for the DIFC itself and to adjudicate on disputes connected with the commercial and civil activities of its organs (Centre's Bodies) and its population of those who are authorised to conduct a business in the DIFC in respect of which disputes have arisen."

His lordship's analysis is probably right but it does limit considerably the attractiveness of the DIFC Court as a forum for the resolution of commercial disputes. Herbert Smith has discussed this case and others in their article "The Courts of the DIFC - Can they hear your Dispute" in the March 2011 issue of the Middle East Exchange which appears on that firm's website.

DIFC Law of Confidence

The DIFC (Dubai International Financial Centre) is like a little bit of London in the Gulf. Covering an area of 45 hectares - slightly smaller than Kensington Gardens - it is a free zone for the banking, insurance, trading and other financial services industries with its own legal system. As I said in my article on The DIFC Courts, the interesting attribute of this legal system is that the laws are in English and its courts apply the common law.

There is now a comprehensive body of civil and commercial law for the Centre covering such matters as companies, contracts, insolvency, partnerships and data protection. DIFC Law No. 5 covers obligations which includes much of the law of tort (negligence, nuisance and deceit) and equitable obligations (fiduciary duties and confidence).

The DIFC law of confidence is set out in art 37 of this Law of Obligations. Paragraph (1) provides:

"Subject to Article 37 (4), a person has a duty not to misuse specific information which he has received from another (a "confidant"), directly or via an intermediary, and which can reasonably be regarded as confidential, where he knows or ought to know that the information is confidential."

It should be noted that the word "confidant" has a special meaning in this article in that it refers to the person imparting information rather than the person to whom information is confided (cf my note on "The Law of Confidence" in IP/IT Update). Art 37 (2) continues:

"If a person breaches his duty as defined in Article 37(1), he is liable to the confidant."

"Misuse" in the DIFC code includes but is not limited to disclosure (art 97 (4)). There is no attempt to define confidential but art 97 (3) provides that "unless non-confidentiality is otherwise expanded by agreement, information is not confidential if:

(a) it is in the public domain;

(b) it is trivial or useless; or

(c) it is in the public interest that the information should not be confidential."

The obligation of confidence is subject to the following limits in art 97 (4):

"(a) the confidant has consented, expressly or by implication, to its disclosure;

(b) its disclosure is required by law;

(c) its disclosure is required in the interests of the confidant;

(d) it is no longer confidential; or

(e) it is disclosed to a person who has a legitimate interest in receiving it."

Finally, it is no defence that the defendant did not know that he was misusing confidential information (art 97 (5)).

There does not appear to be any case law on the obligation of confidence. The only other relevant legislation that I have been able to find is art 29 of the DIFC Law of Contracts:

"Where information is expressly given as confidential by one party in the course of negotiations, the other party is under a duty not to disclose that information or to use it improperly for its own purposes, whether or not a contract is subsequently concluded. Where appropriate, the remedy for breach of that duty may include compensation based on the benefit received by the other party."

This provision would clearly apply to discussions between those with a business proposition such as inventors and potential backers such as angels or venture capitalists. However, it should be noted that the information must be disclosed "expressly in confidence" which implies a confidentiality agreement of the kind I have drafted for use in England (see my "Confidentiality Agreement" on the JD Supra website).

I should be glad to discuss this article with anybody who has any questions. He or she can contact me through my on-line form.

Why Dubai? Or the rest of the Gulf for that matter?

The Bar Council has sent three missions to the Gulf since 2008:

• 3 -8 May 2008: Dubai, Qatar and Bahrain
• 24 - 28 May 2009: Abu Dhabi, Bahrain and Dubai
• 3 - 8 December 2010: Oman, Qatar and the United Arab Emirates.

Those missions have focused on construction, financial services, company and insolvency work and on the opportunities offered by the DIFC (Dubai International Financial Centre) Courts and the Qatar Financial Centre Civil and Commercial Court. None of the missions has included members of the intellectual property bar which is hardly surprising since none of the cases that have been decided by the Dubai and Qatar courts has turned on intellectual property.

However things may be changing. Madeleine Heal has discussed proposals for a new intellectual property code and a specialist intellectual property tribunal for the DIFC in Proposed DIFC Intellectual Property laws – A Hub for Innovation. The development of Dubai Internet City, Dubai Media City and Dubai Studio City and Education City in Qatar and the Qatar Science and Technology Park will attract investment from around the world. Equally, businesses, universities and research institutes in those centres generate intellectual assets that will require legal protection around the world. There will inevitably be disputes and differences which will need to be resolved locally.

As Madeleine said in her article the English Bar can help with that. I have already helped to decide the aljazeera.com domain name dispute as a neutral (WIPO case D2005-0309 Jazeera Space Channel TV Station v. AJ Publishing aka Aljazeera Publishing). I hope to do more work as an advocate and advisor as well as arbitrator and mediator in the region. Also, as the Gulf falls midway between manufacturers in India and China and mineral and agricultural commodity producers in Southern and East Africa and also between the financial centres of Western Europe and the Western Pacific Basin, there should be more than just local work.