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The Basis of the U.A.E. Legal System

The Basis of the U.A.E. Legal System

Lawgical with LYLAW & Tim Elliot

26 November 2019

Tim Elliot:  Welcome to Lawgical.  I’m Tim Elliot, here once again in the Jumeirah Lakes Towers District with Ludmila Yamalova, Managing Partner at the legal firm, Yamalova & Plewka, here in Dubai.

It’s going all be today about the U.A.E. legal system.  What we’re going to try do, Ludmila, is to break down the legal system into bite-sized chunks.  I have a dispute here in the Emirates.  It’s a small country.  Lots of people think of Dubai as being the whole Emirates, but it’s not quite that easy, is it?

Ludmila Yamalova:  Indeed, it isn’t, and you’re right, for those living outside of the U.A.E., there is often a disconnection between Dubai being the country or there’s an understanding or belief that Dubai is the country, but in fact the country we are talking about is the U.A.E.  The U.A.E. has seven emirates, and Dubai is just one of the seven emirates.  Why it’s relevant for the purposes of this discussion is that we have different courts and different court systems, depending on the emirate.  In general, what’s important to highlight is the U.A.E. is the civil law jurisdiction.  The civil law jurisdiction is usually categorized by virtue of relying much more on the laws versus court precedents.  That’s just a very high-level comparison between a civil law jurisdiction and a common law jurisdiction, so it is much more law based versus court precedents based.

Interestingly enough, although the U.A.E. geographically is a very small country, and the default system in the U.A.E. is the civil law jurisdiction, we also have exceptions.  There are two exceptions.  In the emirate of Dubai, there is within this a civil law jurisdiction.  There is another separate jurisdiction system, and that is called the DIFC courts, or the Dubai International Financial Centre courts.  The DIFC courts are actually based on common law jurisdiction, and they are very different from the local courts.  I’ll explain that shortly.  The DIFC courts have been in existence since 2006, so for quite a number of years.

In 2015, Abu Dhabi introduced a similar model.  That model is called ADGM courts or the Abu Dhabi Global Market courts.  Once again, it’s very similar to the DIFC courts in many ways, but in particular because it is a common law jurisdiction.  Though we are very small country, we have very complex legal systems as you rightfully pointed out.  We have a civil law framework and within that civil law framework we have at least two exceptions that are common law.

Now just in relevant terms, the difference between civil laws and common laws and the difference between local courts and the DIFC courts and the ADGM courts, there are several.  One is that the civil law system in general is based on the Egyptian law and previously to that it was a French code of law, so a lot of the laws here, under the U.A.E. civil law system, are very similar to those in Egypt and even in France.  Court precedents, generally speaking, are not binding.  All of the arguments are mainly based on laws and much less so on the court precedents, at least in theory, and I will come back to this particular point later.

Also, in the civil law jurisdiction, there are three systems or three types of courts.  There is the Court of First Instance, Court of Appeal, and then there is the Court of Cassation.  What’s very important to highlight is that in local courts under the U.A.E.’s civil law system the official language is Arabic.  Everything that is argued in the courts has to be done in Arabic.  All the submissions are obviously in Arabic and have to be legally translated, which means that just because I speak Arabic or I have someone in my office who speaks Arabic, if they do the translation of a document that I want to submit, that is not sufficient and that is not the right protocol.  In fact, to submit documents to court, they have to be legally translated which means they have to bear a stamp of a court-certified translator.

Tim Elliot:  Is this the case in the DIFC courts or in the Abu Dhabi Global Market court?

Ludmila Yamalova:  No.  The DIFC courts and the Abu Dhabi Global Market courts, or the ADGM courts for the interest of simplicity, they are actually common law, so they are much more court precedent based, and they are based on English laws.  The official language in those two courts is English.  They only have two court levels, that is the Court of First Instance and then the Court of Appeal.  In the local courts, the three stages of the courts, and that is the Court of First Instance, the Court of Appeal, and Court of Cassation, the right to appeal two levels up is more or less automatic.  In other words, I cannot be refused if I lost in the Court of First Instance.  I cannot be refused the right to appeal to the next level and I cannot be refused to appeal the judgment to the Court of Cassation.

In the DIFC courts and the ADGM courts, on the other hand, the right of appeal is not automatic.  You need to get the permission to appeal.  Therefore, in most cases if you have a DIFC or an ADGM court case, the Court of First Instance is more or less, chances are, will be the final judgment.  Because most of the appeals are not necessarily granted.

So the difference is quite significant and it is especially significant because it’s such a small country and we have so many different choices to turn to.

Tim Elliot:  I was going to say, that makes it a very complex, a very diverse situation.  So there are, obviously, a number of different court buildings in the U.A.E. as well.

Ludmila Yamalova:  Indeed, and that is a further complication.  That is, you think, okay, I mentioned earlier we have seven emirates, and you would think that in terms of local courts, we just would have perhaps one Court of First Instance and one Court of Appeal and one Court of Cassation.  That is not so.  In fact, we have, in the interest of simplicity think of it as four court systems.  So the U.A.E., being the federal system, has seven emirates.  However, when the U.A.E. came together, when the individual emirates came together, there was a choice to be made whether all of the emirates want to become part of the federal court system or the federal judicial system, or whether they wanted to keep their own individual emirate court systems.

Originally, it was Dubai and Ras Al Khaimah that opted out of being part of the Federal Court system.  Later, Abu Dhabi also opted out.  Now, you have these three emirates, being Dubai, Ras Al Khaimah, and Abu Dhabi, which have their own court systems, whereby, for example, you have the Court of Cassation and it is the ultimate and the final court for each one of those emirates.  If I have a dispute in Dubai, I go to the Court of First Instance and the Court of Appeal and the Court of Cassation, all of which are based in Dubai and the Dubai Court of Cassation judgment is the final judgment and cannot be appealed anywhere else.  You cannot appeal the Dubai Court of Cassation judgment, for example, to the Federal court.

Now a number of emirates opted into the federal court system, and those emirates are Ajman, Sharjah, Umm Al Quwain, and Fujairah.  That means even though for the Court of First Instance and the Court of Appeal, those two courts are based in each one of those individual emirates, but as far as the final court is concerned, and that is the Court of Cassation, if you want to, for example, appeal to the Court of Cassation for a matter that is being litigated in Sharjah, then you would take it to the Federal Court of Cassation.  Therefore, in simple terms, we have four Courts of Cassation, that is Dubai, Abu Dhabi, Ras Al Khaimah, and the Federal Court.

Why it is important is because, again, even though we are a very small country, if you have a case in Dubai, let’s say an employment case, it’s not to say that you can take that case and litigate it for example in Abu Dhabi, perhaps because you are based in Abu Dhabi or Abu Dhabi for some reason is more convenient for you.  It really is important to understand the underlying nature of the case before you decide where you bring the case, in which emirate and which court.

Tim Elliot:  So you can choose where to bring the case?  I mean, to me, as a native English speaker, it would make sense to use the DIFC courts, let’s say, because I can understand that it will be in English.  That’s going to help me.  Is that the case?  I can choose?

Ludmila Yamalova:  Yes and no.  For the most part, these days many of the cases can be litigated in the DIFC courts under certain conditions, but there are a few exceptions.  Let me back up a little bit because if you think about just the phrase, the DIFC courts, what is that?  That’s the Dubai international Financial Centre courts.  Now, the DIFC is a free zone, and historically the belief was, and that was the truth for a while, was that unless you have a DIFC based case or a you’re a DIFC based party or a case was of a financial nature, then that court, the DIFC court, was not accessible or available to anybody else.  That court was ultimately there to only litigate issues for DIFC based parties or DIFC based matters.  That was the original understanding and in many ways the court was set up that way for the first part of its existence and it had limited jurisdiction.  It could only hear cases that were based in the DIFC.  In 2011, the law was amended allowing parties to contract into the DIFC.  Let’s say, if you have a trading company and you want to be able to avail yourself of the legal system before the DIFC courts for a reason such as, for example, as you said, you want to litigate your dispute in English, you can do that but you must include that language in your contract.  Now you can opt in but the condition is that you have to expressly opt in to the DIFC court by including specific language.  In fact, the DIFC courts have on their website the exact language that you would want to include into the contract to make sure that you have the right to avail yourself of that jurisdiction when the time comes.  Same for the ADGM, the option is now there.  You don’t necessarily need to have a connection to the DIFC, as long as you mention it in the contract, then you will have the default jurisdiction.

Now there are two more things to add.  For some of the matters, even if you don’t have specific language and you’re not, for example a DIFC based party, but if part of your transaction did take place in the DIFC and you can establish that, that in and of itself also gives you the right to claim the jurisdiction of the DIFC courts.  For example, you and I, we want to sign a contract.  We are based outside of the DIFC.  We have nothing to do with the DIFC, but on the day we decide to execute that contract, you and I meet at a coffee shop in the DIFC and we sign, you sign and I sign, in the DIFC at a coffee shop.  Let’s say I paid for the coffee and I have a receipt on that day that shows yes, we were here in the DIFC.  Perhaps we even mentioned the date and the time on the contract when we signed.  The provision in the contract itself about the jurisdiction is vague enough, perhaps it is just Dubai courts.  Now, we have a dispute.  Where do we go to court?  We can opt for the DIFC jurisdiction on the basis of (a) the language in the contract is general enough because it says Dubai courts, and let’s face it, the DIFC stands for Dubai International Financial Centre, so it is one of the Dubai courts.  Then (b) part of the transaction took place in the DIFC and that is we signed a contract in the DIFC.  In fact, this particular principle has become known as the coffee shop rule.  This is not just a hypothetical and made up example, but in fact in the DIFC courts there is such a principle as the coffee shop rule and that is as long as you can establish any nexus or any connection to the DIFC, including signing a contract or even talking about a part of a contract while in the DIFC, that would warrant for you to claim jurisdiction under the DIFC courts.

Tim Elliot:  And something as simple as a receipt from the coffee shop would go to evidence?

Ludmila Yamalova:  Indeed, it would.  It’s an important piece of evidence.

Tim Elliot:  The coffee shop rule.

Ludmila Yamalova:  Yes, the coffee shop rule.  However, there are limitations.  There are certain disputes that cannot be brought into the DIFC courts, and that is, particularly disputes that have, for example, they were certain other judicial departments have exclusive jurisdictions, such as rental disputes.  If you have a rental dispute, and you don’t mention the DIFC in particular, or the rental dispute said the default jurisdiction is in Dubai for the RDC, or the Rental Dispute Center.

There are certain employment cases as well, if you are not based in the DIFC then you’re subject to the U.A.E. federal employment law and therefore, you cannot bring a case for employment in the DIFC under the DIFC employment law because they have a separate employment law than the one that applies to all the other employees that are outside of the DIFC.  But I will tell you, even that is changing.  There are a number of understandings and MOUs that are being signed between certain free zones and the DIFC courts allowing parties to start bringing cases, or at least opting, for the DIFC jurisdiction in certain cases, including employment, so even that is shifting.  That is just to add a little more color to an already colorful jurisdiction and the whole framework here.

Tim Elliot:  It’s becoming a full rainbow.  Let’s be honest.  Let’s step outside of the DIFC for a second.  When you have to argument a case in Arabic, present documentation in Arabic, and that has to be translated legally, professionally for the court.  If I spoke in Arabic to the level necessary, could I represent myself?

Ludmila Yamalova:  In short, yes, but not to the level of the Court of Cassation.  At the Court of Cassation, you are required to have an advocate, but remember the Court of Cassation is the third level.  Yes, until such time, for the Court of First Instance, the Court of Appeal, you can represent yourself, and many people do, but certainly speaking Arabic is a huge advantage, but it’s not necessarily mandatory because courts do provide for legal translators.  That option is available, though the quality of translation perhaps obviously will not be the same as if you spoke the language yourself and could communicate with the judge directly.  But the difference here is that in local courts, most of the arguments in civil matters and commercial matters are made on written submissions.  Therefore, there isn’t really much oral advocacy that’s going on before the judge.  So it’s not so important for you as a litigant, as a party to the dispute to stand in front of the judge and argue your case because most of the hearing last only a few minutes.  The courts require that all the arguments, all the evidence, everything is submitted on the pleadings, that is in writing.  Therefore, even speaking the language itself is not so important because for the limited hearings, the limited scope hearings, you can rely on legal translators at the court, but for submissions to the court, that’s where you really want to make sure that all your submissions are either properly legally translated or if you speak the language, then you will have to make sure to put in all the arguments on paper.  That’s an important element because a lot of people coming from different jurisdictions, they expect the oral advocacy to be a big component of cases here.  But the judges, unless you want to add something new to the matter, to the case, they will not even really give you much of an opportunity to do speak or comment on your case because they want to make sure that everything that you want to add to the case is actually done in writing.

Tim Elliot:  When it comes to being in court with a court-appointed translator, could I, for example, go to court with a friend who speaks Arabic and communicate with the judge in that way?

Ludmila Yamalova:  Oh, wouldn’t that be convenient.  In short, no.  That’s not an option.  Furthermore, you gave an example of an individual representing himself or herself before the judge, however, for companies, it’s a little different because how can the company represent itself before the courts?  The law on that particular point has changed recently.  In the past, the company could only be represented either by the manager who was listed on the company’s trade license or through an advocate, that is a lawyer.  That was the only way the company could represent itself.  Therefore, even if you have a number of Arabic speakers at the company, but the person who was listed as a manager on the trade license was not, the company could not represent itself.  The law was changed recently, just last year, and now companies actually can designate whoever they want from the company, whoever speaks Arabic to represent them.  So it became a little more flexible for companies to be able to represent themselves.  Why this is important is because in the U.A.E. as of about 10 years or so now, the right of audience before the local courts is reserved to the term that has become known as local advocates.  Local advocates are, for the most part, U.A.E. nationals, and this is by law.  Just speaking Arabic or being an Arabic nationality is no longer sufficient to have the right of audience before the judge, that is, to be an advocate or stand in front of the judge.  You need to be an emirate to have the right of audience.  There are a few exceptions.  The exceptions are those lawyers or those advocates who have been practicing in the U.A.E. legal system for 20+ years, so there could be a few Lebanese, Egyptian, Sudanese advocates who are not U.A.E. nationals but who have the right of audience before local courts only by virtue of being basically grandfathered into this position by virtue of their history with the courts here.  But otherwise, the right is reserved to the local advocates and therefore you’re limited in terms of your ability to source a lawyer.  You’re limited to hiring somebody who only works for a local advocacy which means that not only are you not able to bring a friend, but you cannot even hire a firm that does not have an advocacy license.

On that point, there is a difference between local advocates or an advocacy license or advocates and legal consultants.  My firm, for example, we are legal consultants.  We are lawyers, but we are without the right of audience before the local judges.  We’re admitted in the DIFC courts and at ADGM.  We can do a lot of other litigation type of work, but in terms of standing in from of the judge and submitting documents on letterhead, that is only reserved to advocates and not legal consultants.  There are many more legal consultants because there are a number of foreign firms in the U.A.E. that have branches here and many of those legal consultants have a lot of Arabic speaking lawyers, but none of them can represent clients and the court directly because they are not advocates.

Tim Elliot:  Let’s talk about fees.  What are the differences in fees in the various different courts you’ve been talking about?

Ludmila Yamalova:  The fees can actually be quite significant.  One big difference is that in local courts we are talking about dirhams.  When the fees are being quoted, it’s all in dirhams and that is the U.A.E. local currency obviously.  In the DIFC courts and the ADGM, we are talking about dollars.  Everything is done in dollars.  Everything is quoted in dollars.  Right there, the difference is fairly significant.  Depending on the type of cases you’re filing, for example, employment versus a rental dispute versus commercial, the court fees are usually set at a percentage, anywhere from 3.5% to 7.5%, depending on the case, and that is of the claimed amount.  But they are usually capped.  They can be capped at either 20,000 dirhams, depending on the nature of the case, or 35,000 dirhams.  In dollar terms, the maximum fee you would pay in the local courts is let’s say $10,000 or about 35,000 dirhams.  In the DIFC, for example, everything is quoted in dollars and the cap now, I believe, is $40,000.  It used to be $20,000.  Now it is $40,000.  The initial court fee is a lot higher.  On top of that, in the DIFC there is a fee for almost every hearing and most of the submissions that are made.  Let’s say there is a hearing.  Usually again the fees are in dollars and it would be $100, it would be $500 per hearing, and so on and so forth.  Depending on the nature of the case, depending on how long the case goes, the DIFC Court may, or may not, be more expensive, again, depending on the amount at stake, but equally so perhaps because every hearing costs money.  In theory, the strategies or the philosophy is that parties will be more incentivized to settle and not drag things out because everything does cost money and depending on who the party is that asks for a particular claim or a particular hearing, that party will have to advance fees.  It really demotivates people from doing what we call in the U.S. motion practice, and that is just dragging the court process out just to gain more time.  Gaining more time in the DIFC costs more money.

That being said, once again talking about fees in the DIFC, even though it is much more expensive, but the winner can get attorneys’ fees recovered.  In other words, the loser would pay the winner’s lawyers’ fees, which is huge, because in the local courts the law kind of provides for it, but in practice the courts grant anywhere from 500 dirhams to I think 1,500 dirhams for lawyer’s fees.  Effectively, there is no recovery of lawyers’ fees in local courts.  In the DIFC, the threat is serious, and therefore, once again, the philosophy or at least the hope is a theory that parties should be more incentivized to want to settle because if you do file, for example, a frivolous case or a malicious case, or if you’re just doing this to postpone payment of your obligation, then there is a fairly hefty penalty at the end of the process should you lose.

Tim Elliot:  Just for the purposes of anybody listening now who’s not sure of the relationship between the dirham and the dollar, the dirham as a currency is pegged to the dollar.  It’s 3.68 dirhams to the dollar, so as you said, $10,000 is 35,000 to 36,000 dirhams.  Let’s talk about some very specific cases just for a second, if I could throw these at you in a slightly quick-fire fashion.  Imagine I’m a Dubai International Financial Centre employee, can I go to the labor court to file a case?

Ludmila Yamalova:  Great question.  No.  In short, no.  The DIFC courts have exclusive jurisdiction over their own employees.  If you’re a DIFC employee, you can only go to the DIFC courts.

Tim Elliot:  Okay.  Conversely then if I work in the Dubai Media City which is part of the TECOM free zone, a quite popular media free zone here, could I file with the DIFC Small Claims Tribunal if I have a dispute?  Say a salary payment or something like that?

Ludmila Yamalova:  Not right now because right now the labor courts or the U.A.E. courts that are in charge of hearing employment disputes have exclusive jurisdiction over all cases of the employees that are subject to its laws.  There are some free zones that are working on some kind of an MOU with the DIFC courts, but TECOM, as an example, is not one of them for now.

Tim Elliot:  Let’s just get back to the general differences in the U.A.E. legal system, just really to sum up as much as anything.  The question in my mind is this:  What would lead you to choose one system or one court over another?  Are there any specific cases that you can cite as examples that highlight why you should choose one over the other?

Ludmila Yamalova:  There are many examples.  One particular example is, let’s say the small matters or low value matters.

Tim Elliot:  The Small Claims Tribunal such as it is.

Ludmila Yamalova:  Right.  Let’s say you have a claim for 50,000 dirhams.  In practical terms, it’s not a very large amount.  Going to the local courts is fairly prohibitive because you need to not only pay the court fees, the legal translation fees, you have to pay local advocate fees and for 50,000 dirhams not many advocates want to take a case like that.  Since you are trying to claim 50,000 dirhams, you probably don’t want to pay very much.  Right now, in the local courts there isn’t really a system for small claims matters.  The DIFC, as you rightfully pointed out, does have under its umbrella, the court umbrella has the Small Claims Tribunal, SCT, and that is exactly to hear these kinds of small matters.  In that particular tribunal, parties can represent themselves, so you no longer need to worry about a local advocate.  You don’t need to translate anything.  You can do things directly yourself and in fact, for now at least, parties cannot bring in lawyers which basically means parties represent themselves and because of it, it’s just a lot less formal and a lot faster of a tribunal in terms of adjudicating disputes.  That is the whole premise is to come to us with small matters where we’ll be able to resolve them very quickly because we’re not getting lawyers involved, we’re not following very sort of high formalities, so because of that we’ll be able to resolve them within two weeks to four weeks, which is exactly what you want when you have a small matter.  That is one example.

Another example.  Let’s say if you have a very complex financial case or a case that involves international companies with a lot of documents and a lot of evidence and rather complex in its nature.  Cases like that are perhaps better to be brought in the DIFC courts where you don’t have to translate these volumes and volumes of documents and perhaps where judges might have seen cases similar to that because in the DIFC we have English trained judges, and the same in the ADGM.  We have a few local judges but for the majority, since it is an English-based court system, most of the judges are English trained and most of the judges are also extremely senior.  These are judges from London, from Singapore, from Hong Kong, and they have under their belts dozens of years of experience, so chances are they might have seen more of these more complex matters in the jurisdictions where they come from.  That’s another example of why you might want to bring a case before the DIFC courts.

Now, let’s say you have an inheritance matter, and if that is the case you would not want to bring it necessarily in the DIFC because, let’s say, it’s much more about enforcement of a will and that means you have to go and seize assets or deal with so many other third parties to try to change ownership of accounts.  The DIFC court judgement, you cannot really act with that court judgment outside of the DIFC, so you need to go and convert it into a local court judgment so that it has the authority with regards to third parties.  There are certain cases where you need to have a local judgment, and you want to have a local judgment because it’s a lot more efficient for you to enforce that judgment than having a DIFC court judgment.  So that’s another example.

There are some, for example, rental disputes where you want to go to the Rental Dispute Center because the judges there are much more experienced in rental matters, or if you have, for example, a property in Abu Dhabi.  Would you want to bring a case in Dubai or would you want to bring a case in Abu Dhabi?  Well, ultimately you need to think about enforcement.  Even though Dubai, if the contract provides for Dubai courts, for example, as a jurisdiction, you could bring it in Dubai but ultimately you need to enforce that Dubai judgment.  You will have to go to the Abu Dhabi court to enforce it.  Perhaps a better strategy is to start the case in Abu Dhabi.  The examples go on.

Tim Elliot:  Every case is particular to that case.  So simply, you need to take advice.

Ludmila Yamalova:  Absolutely.  In many ways, even though it’s a small country, there could be multiple choices for every given case.

Tim Elliot:  Ludmila, the one thing that does concern me is in legal disputes, it’s much better practice to try to talk it through and sort it out without going to court.  Court is always, I guess, seen as a final option.  How is something like arbitration treated here in the U.A.E.?

Ludmila Yamalova:  Yes, the court should always be the final resort.  Unfortunately, in most cases it is the only choice and that is because what’s called the alternative dispute resolution, or for example, mediation has not historically been very effective here.  In certain jurisdictions, for example, when you do file a court case, there is mandatory mediation where the judge says, okay, parties stop, pause, for x number of weeks.  I want to go and try to mediate it.  Mediate means that basically amicably more or less settle the case.  In this jurisdiction for now mediation does exist, but more as an administrative step, but less so as a binding or effective step in the process.  For now, whenever parties do have a dispute in most cases the case does end up going to court because the alternative dispute resolution has not quite developed yet in the way it has perhaps in other jurisdictions.

However, the courts are not always the only forum for dispute resolution.  There is also arbitration.  Arbitration, in simple terms, it’s a sort of semiprivate or semi government body that is an alternative to a court, but in order to avail oneself of arbitration the contract or the parties must be specifically state which arbitration centre, under which laws, and where it’s seated and such, so this is very specific.  Every arbitration centre has very specific language which it requires for the parties to include in order for them to avail themselves in the jurisdiction of that particular arbitration.  The U.A.E., once again, has multiple arbitration centers.  In Dubai, for example, we have the Dubai International Arbitration Centre, otherwise known as DIAC.  The DIFC has its own arbitration centre.  Abu Dhabi has its own arbitration, and then ADGM has its own arbitration, and so on and so forth.  Even with regards to arbitration centres which are an alternative to courts, we have a number of options.

Tim Elliot:  One final question, and this is really an outsider looking in perspective, I guess.  If anybody’s listening to this anywhere else in the world, is it advantageous to choose one court over another in terms of the judgment and how that’s viewed internationally?

Ludmila Yamalova:  It depends obviously on the parties and the matter at hand, but yes.  For example, let’s say there is a contract or transaction between two parties, one of which is not U.A.E. based.  Let’s say one is based in Malaysia and the other one is in the U.A.E.  Now which jurisdiction do you choose?  Which court do you choose?  Obviously, if the transaction is happening here, it’s natural to pick the U.A.E. in the event of a dispute.  But coming from Malaysia, you feel you don’t want to be subject to the U.A.E. courts because I am a foreigner and so therefore, there I will be at a disadvantage because I’m not a local entity.  In that particular case, the DIFC perhaps or the ADGM would be an alternative because these courts are viewed as international courts, and therefore, at least in theory, they have less of a bias, I guess, in theory again, a local court would have.  If you have a U.A.E. national, for example, and a Malaysian national and you bring a case in the local court, perhaps there is at least a perception of a bias.  This exists in all jurisdictions.  In the U.S. in particular this is quite developed, and the forum shopping term has come exactly from that.  In that case, the DIFC, because it prides itself to be much more international and therefore much more neutral, that would be a huge advantage for parties because not having to argue in Arabic is obviously massive advantage.  The other one is just that it’s an English type court.  Now, the further advantage which is significant for many parties and that is with the DIFC court judgment, you can enforce the judgment in many other jurisdictions outside of the U.A.E. much easier than you would enforcing a U.A.E. local court judgment, and this is because, again, in the DIFC Court it is an English-based court.  It’s common law.  The judges are English-trained judges, and therefore, the judgment when it’s issued, it’s much more akin, for example, you would have expected to have in an English court.  Additionally, over the years, the DIFC has signed a number of MOUs, or memorandums, with different courts around the world providing effectively for easier enforcement of the DIFC Court’s judgments.  Let’s say if you have a DIFC Court judgment, you go to the UK with that judgment, it’s a much easier process of enforcing it than it would be with an Arabic judgement.  The same thing, for example, with some of the courts in New York with whom the DIFC has signed MOUs and a number of courts in Asia, and so on and so forth.  In terms of the international enforceability of judgments, the DIFC and the ADGM perhaps are better forums or better choices than the local courts.

Tim Elliot:  Ludmila Yamalova is the Managing Partner of the legal firm, Yamalova & Plewka here in Dubai.  As always, Ludmila, I really appreciate it.

Ludmila Yamalova:  It was a pleasure to have you.  Thank you.

Tim Elliot:  Thanks for your time.  The basics of the U.A.E. legal system.  That was another edition of Lawgical.  Don’t forget, if you have a legal question you need answered, we’re happy to look at it in a future podcast.  If you would like a consultation with a qualified legal professional, all you have to do is click on the Contact button at Lylawyers.com.  Remember, we try to answer your legal questions either in a Lawgical Lite bite-sized quickie podcast or at our slightly more detailed, full-length Lawgical podcasts, just like this one, every single week.