DIFC Seeks to Solidify Legal Framework with Proposed Amendments

Dubai International Financial Centre (DIFC),the leading financial hub in the Middle East,Africa and South Asia (MEASA),is proposing amendments to its law on the application of civil and commercial laws.This move aims to provide greater clarity and certainty regarding the source and interpretation of DIFC's legal system.

Jacques Visser,Chief Legal Officer at DIFC Authority,highlights the importance of common law in DIFC's success."DIFC Laws are supplemented with reference to English Common Law and interpreted in accordance with both English Common Law and the Laws of other established Common Law Jurisdictions," he explains.The proposed amendments aim to solidify this approach by offering statutory confirmation for legal practitioners and courts.

Addressing the Source of Law

Previously,DIFC law was understood to be "backstopped" by English Common Law.The amendments seek to formally establish this by adding a new article to the Law of Application.This article clarifies that DIFC statutes are the primary source of law.However,if a specific legal concept is not explicitly addressed in DIFC statutes,English Common Law can be used to fill the gap.DIFC courts,however,are required to ensure such applications are appropriate and consider any necessary modifications for the specific circumstances.Additionally,the amendments prevent courts from relying on English Common Law principles that contradict existing DIFC statutes.

Ensuring Continued Relevance of Common Law

Another new article clarifies the interpretation of DIFC statutes.The amendments allow DIFC courts to consider legal principles developed in established common law jurisdictions for analogous situations.Furthermore,if a DIFC statute is based on an international model law,interpretations from international jurisprudence and relevant commentary can be used as guidance.

These amendments aim to ensure that while English Common Law remains a cornerstone of DIFC's legal system,the Centre can also leverage best practices from a wider range of established common law jurisdictions.This approach is expected to foster a dynamic and adaptable legal framework that supports the continued growth of DIFC as a global financial hub.

For a detailed explanation of the proposed amendments,please refer to Consultation Paper No.1 of 2024,available on the DIFC website.The public consultation period for the amendments concludes on June 1,2024.