In March 2025, Dubai marked a significant shift in the judicial framework of the Dubai International Financial Centre (DIFC) Courts with the enactment of Dubai Law No. 2 of 2025 (the “Dubai Law”). This new legislation repeals and consolidates the founding statutes that previously governed the DIFC Courts, representing a pivotal move toward streamlining jurisdictional rules, enhancing procedural transparency, and reinforcing alternative dispute resolution mechanisms.
A Legislative Reset: What Changed?
The Dubai Law repeals both DIFC Law No. 10 of 2004, which originally established the DIFC Courts, and Dubai Law No. 12 of 2004, commonly known as the Judicial Authority Law (JAL). By consolidating these foundational statutes into a single, comprehensive legislative instrument, the Dubai Law aims to modernize and streamline the DIFC’s judicial framework by:
- Codifying long-applied practices into primary legislation.
- Clarifying the DIFC Courts’ jurisdictional reach.
- Empowering virtual and remote proceedings.
- Introducing a statutory Mediation Centre; and
- Enhancing enforcement and cross-border recognition mechanisms.
Defining Jurisdiction: Greater Clarity, less Ambiguity!
At the heart of the Dubai Law is Article (14), which comprehensively outlines the DIFC Courts’ jurisdiction:
- Core DIFC Matters: Disputes involving the DIFC, its bodies, or registered entities.
- DIFC Contracts & Property: Claims arising from transactions or property located within the DIFC.
- Trusts and Wills: Exclusive jurisdiction over trust instruments and non-Muslim wills registered in the DIFC (Articles 12(A)(2) and 31(5)).
- Arbitration-Related Claims: Broadened powers to hear matters under the DIFC Arbitration Law (Law No. 1 of 2008).
- Opt-in Agreements: Jurisdiction via written agreements—now explicitly required to be “specific, clear, and express” (Article 14(B)).
- Conflict Avoidance: New grounds to decline jurisdiction where a final, enforceable judgment has already been issued by another competent court (Article 14(C)).
Notably, Article 14(A)(7) of the Dubai Law extends DIFC Courts’ jurisdiction to matters conferred by international treaties ratified by the UAE, positioning the DIFC as a gateway for international commercial disputes.
Technology and Virtualization: A Step Forward
In a move aligned with global judicial trends, Articles 4(B) and 8(B) formalize the use of virtual hearings and remote testimony. These measures enhance access to justice and streamline operations; particularly valuable in cross-border or high-volume commercial litigation.
Mediation
One of the most significant developments is the statutory establishment of a DIFC Courts Mediation Centre under Article (13). Reinforced by Article 30(B), the Dubai Law now grants enforceability to signed settlement agreements either approved by the Mediation Centre or ratified by the DIFC Courts; treating them akin to court judgments.
This development elevates mediation from a soft alternative to a structured, enforceable process, encouraging parties to consider it earlier in the dispute lifecycle.
Enforcement Reform: Codifying the Conduit
Articles (29) to (33) introduce a refined enforcement regime:
- Creation of an “Enforcement Judge” role to oversee enforcement proceedings within the DIFC Courts.
- Recognition of mediated settlements, foreign judgments, and arbitral awards as enforceable instruments.
- Article (32) preserves the DIFC’s function as a conduit jurisdiction, allowing DIFC-recognized judgments to be enforced onshore in Dubai, even where the debtor holds no DIFC assets. For more details, see our article Breaking Barriers: New MOU Simplifies Cross-Jurisdictional Enforcement Between Dubai and ADGM Courts ( BD and Marketing Team – to be hyperlinked to our previous article titled Breaking Barriers: New MOU Simplifies Cross-Jurisdictional Enforcement Between Dubai and ADGM Courts)
Though the term “conduit jurisdiction” is not expressly used, its functional elements are now codified, lending this mechanism greater legal certainty.
Court Assessors: Expert Guidance for Complex Disputes
Under the new law, judges may appoint Court Assessors – independent experts to advise on technical matters such as engineering defects, complex valuations, or insurance disputes. Their input is non-binding, and parties may respond to their findings, ensuring fairness while enabling specialist insight.
Transitional Measures and What to Expect
Article 43(C) acts as a “savings clause,” preserving all existing regulations and procedural rules (including the DIFC Rules) unless they conflict with the new law. However, new secondary legislation is anticipated to be phased in over time.
Practical Takeaways
For businesses and legal practitioners engaging with the DIFC Courts:
- Review Dispute Resolution Clauses: Ensure opt-in clauses are now “specific, clear, and express.”
- Understand the Mediation Shift: Consider mediation early as it now carries legal finality.
- Map Enforcement Strategy: Align with the revised enforcement framework and the role of the Enforcement Judge.
- Anticipate Rule Changes: Monitor for updated Rules of Court and secondary legislation to align with procedural shifts.
Conclusion:
Dubai Law No. 2 of 2025 signals a deliberate move toward a more transparent, efficient, and globally integrated judicial framework within the DIFC. By harmonizing past laws and codifying long-standing practices, the Dubai Law strengthens the DIFC’s position as a credible, flexible, and forward-looking commercial dispute resolution hub.
Seek Legal Counsel
For expert guidance, consult Dr. Kamel Elshendidy, Counsel, Alanood Alriyami, Associate, and Ahmed Elkhatib, Paralegal, all specializing in litigation. Our team is dedicated to providing tailored legal solutions for your needs.
