Common DIFC Courts Mistakes to Avoid in Dubai

By the time a claim reaches the DIFC Courts, much of its outcome has already been decided — in the two lines of a contract that say where disputes will be heard, and in the assumption that a court sitting in Dubai must work the way the parties expect a court in Dubai to work. The DIFC is a common-law jurisdiction with its own judiciary, its own procedural rules and its own body of judgments, and the errors below all come from treating it as something else.

Assuming the DIFC Courts will hear it because everyone is in Dubai

Being based in Dubai does not put a dispute in front of the DIFC Courts. Their jurisdiction rests on a connection to the DIFC — a party established there, a contract performed there, a transaction concluded there — or on the parties having agreed in writing to submit to them. A claim filed on the strength of geography alone invites a jurisdictional challenge that has to be argued and paid for before anyone reaches the merits.

The reverse error is as common. Parties who did intend the DIFC Courts write a clause that never says so, or that says so in one document and something different in another. Where the intention is to use this forum, the clause should name the DIFC Courts as the court of exclusive jurisdiction, in those words, and the same wording should appear in every related document — the guarantee, the side letter, the framework agreement and the order forms issued under it.

Contradicting the clause somewhere else in the file

Split and inconsistent dispute clauses generate satellite litigation about where the case belongs. The usual patterns are a main agreement referring disputes to arbitration while an annexed schedule refers them to a court, a governing-law clause pointing to one system and a jurisdiction clause to another, and clauses that still name the DIFC-LCIA. Dubai Decree No. 34 of 2021 abolished that institution and moved its caseload to DIAC. The DIFC remains available as a seat of arbitration, but a clause that still names the abolished institution hands the other side something to argue about before the merits are reached. The same applies to clauses naming ADCCAC, restructured as arbitrateAD from 2024: if the parties want the reference to work, the wording has to say what they now mean.

These points are worth checking against the ADGM as well. Both are common-law jurisdictions, but they are separate ones with separate rules, and a clause drafted for the ADGM does not transplant cleanly to the DIFC. Anyone comparing forums should look at our DIFC Courts practice alongside how the equivalent claim would run in the other financial centre.

Running it like an onshore case

Proceedings in the DIFC Courts are conducted in English, and the procedure is party-driven rather than inquisitorial. Cases are built on pleadings that set out a case in full, witness statements standing as evidence in chief, cross-examination, and a documentary record produced by the parties themselves rather than assembled by a court-appointed expert. Practitioners whose experience is onshore sometimes file a short memorandum and expect the court to take it from there. It will not.

Two habits follow from this. Witness evidence has to be prepared to be tested, which means statements written in the witness’s own account rather than in counsel’s summary. And the documents that will decide the case are the documents the parties disclose, so preservation of email, messaging and accounting records has to begin when a dispute becomes foreseeable, not when a claim form arrives.

Missing the timetable

The court manages its own list, and the directions it gives at a case management hearing are the ones that will apply. Late filings, incomplete disclosure and unexplained failures to comply with directions are treated as the party’s problem, and relief is discretionary rather than routine. The rules also allow a party with a hopeless case or a hopeless defence to be dealt with without a trial, which cuts both ways: a defendant who does not engage properly at the outset may find the claim decided against it early, and a claimant who has documented its case properly can use the same route.

Ignoring what losing costs

The DIFC Courts can order an unsuccessful party to pay the successful party’s legal costs on a scale that has no real equivalent onshore. This changes the arithmetic in both directions. A weak claim is materially more expensive to bring, and a defendant with a strong position has more reason to fight rather than settle for nuisance value. It is worth pricing that exposure before proceedings start, not after a costs order. This is one of the first questions to put to experienced Dubai counsel when deciding whether to litigate at all.

Winning, then discovering the enforcement problem

A judgment is only useful against assets. Where the defendant’s assets sit inside the DIFC, execution is straightforward. Where they sit onshore in Dubai, in another emirate or abroad, the judgment has to be taken through a separate enforcement route, with the translation and formality requirements of the place where the assets are. The time to think about this is when the contract is drafted: locating the counterparty’s assets, taking security, or requiring a guarantee from an entity that holds something worth enforcing against will do more for recovery than anything argued at trial.

Assuming the forum is only for financial institutions

The DIFC Courts hear the commercial and employment disputes of entities established in the centre, claims brought under contracts that opt in to them from anywhere, and lower-value claims through a small claims tribunal. The same jurisdiction sits behind DIFC wills, which non-Muslim residents use to direct how UAE assets pass on death. Ruling the forum out because a business is not a bank is a mistake made at the drafting stage and discovered much later.

Related services: our DIFC Courts litigation team advises on jurisdiction clauses, claims and defences before the DIFC Courts, and enforcement of their judgments.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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