Reforming the DIFC Courts: Key Changes Under Dubai Law No. (2) of 2025
On 3 March 2025, His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as Ruler of Dubai and Vice President and Prime Minister of the UAE, issued Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts (the “Law”), which entered into force on 14 March 2025.[1] The Law represents the most significant legislative revamp of the DIFC since its establishment, superseding both DIFC Law No. (10) of 2004[2], which established the DIFC Courts and Dubai Law No. (12) of 2004.[3]
Why Reform Was Necessary
The 2004 laws worked well for the DIFC courts for over two decades. However, as the DIFC grew into a major global financial centre, some limitations of the laws were exposed, such as ambiguities in the courts’ jurisdiction, absence of a clear framework for alternative dispute methods and procedural gaps that created uncertainty about the remedies available to parties. Law No. (2) of 2025 aims to fix these shortcomings by codifying the established court practices into primary legislation, thus clearly defining the structure and powers of the DIFC Courts, and introducing reforms that bring Dubai’s commercial dispute resolution system more in line with international standards.
Strengthening the Structure and Governance of the DIFC Courts
The Law affirms the independent operations of the DIFC Courts across all three tiers, the Court of Appeal, Courts of First Instance and Small Claims Tribunal. Article 22 establishes a DIFC Courts Affairs Committee presided over by the Chief Justice, to oversee defined governance functions. Additionally, the Law also sets out a clear procedure for appointing the Chief Justice and the Director of the Courts, reinforcing the separation between judicial and administrative functions and improving transparency in the management of the courts.[4]
Clarifying the Jurisdiction of the DIFC Courts
The most significant reform introduced by the Law is Article 14, which concerns the jurisdiction of the DIFC Courts. Article 14 establishes a unified provision governing the types of cases the DIFC Courts can hear.[5] Article 14 combined and replaced the framework previously split between Article 5(a) of Dubai Law No. (12) of 2004[6] and Article 19 of DIFC Law No. (10) of 2004.[7]
Expanding Access Through Opt-In Jurisdiction
A key reform in Article 14(B) allows parties with no connection to the DIFC to submit their disputes to the DIFC Courts, provided their agreement to do so is specific, clear and express in writing[8] Furthermore, Article 14(C) avoids conflicting judgments by allowing the DIFC Courts to decline jurisdiction where another court has already issued a final enforceable judgment.[9] Additionally, Article 14(A)(7) gives the DIFC Courts jurisdiction over disputes linked to international treaties ratified by the UAE, strengthening the DIFC’s role in handling international commercial disputes.[10]
Enhanced Powers to Grant Interim and Precautionary Relief
Article 15 of the Law significantly strengthens the DIFC Courts’ enforcement framework by clarifying and expanding their authority to recognize and enforce foreign judgments and arbitral awards in line with UAE legislation, international treaties and conventions such as the New York Convention. The Law also codifies the DIFC Courts’ power to grant interim and precautionary relief, including freezing orders, injunctions, and disclosure orders, in support of foreign litigation and arbitration proceedings, even where the dispute has no direct connection to the DIFC, provided the relief is sought within the DIFC. In addition, the reforms reinforce the DIFC Courts’ role as a “conduit jurisdiction,” allowing parties to recognize foreign judgments or arbitral awards before enforcing them against assets through the Dubai Courts, thereby reducing procedural uncertainty and strengthening Dubai’s position as a leading international centre for cross-border dispute resolution. Interim and precautionary measures are temporary remedies granted by courts pending the final determination of a dispute. A freezing order, prevents a defendant from disposing of or dissipating assets to frustrate the enforcement of a future judgment or arbitral award. Disclosure orders require parties or third parties to disclose documents or information relevant to identifying or preserving evidence necessary for ongoing proceedings. Injunctions are court orders compelling a party either to perform or refrain from certain acts. Under Article 15 of the Law, the DIFC Courts are expressly empowered to grant such remedies in support of foreign litigation and arbitration proceedings, significantly enhancing the ability of claimants to secure assets and protect their legal interests within Dubai even where the substantive dispute is being heard outside the DIFC. This development follows the DIFC Court of Appeal’s decision in the Carmon[11] case, which confirmed the DIFC Courts’ jurisdiction to grant such relief in support of foreign proceedings. The codification of jurisdiction removes uncertainty and provides claimants a stronger way to stop assets in Dubai from being moved or hidden while foreign proceedings are ongoing.[12]
Establishment of the DIFC Courts Mediation Centre
Article 13 of the Law establishes a Mediation Centre within the DIFC Courts to provide parties with a formal option of alternative dispute resolution. All parties must agree in writing to take part, and any settlement reached through the Centre can be enforced similarly to a court order under Article 30(B)(4).[13] This development reflects a clear intention to make mediation a more important part of dispute resolution in the DIFC.[14]
Conclusion
Dubai Law No. 2 of 2025 is a landmark law that brings together and updates the rules governing the DIFC Courts in a single framework. The Law clarifies the DIFC Courts’ jurisdiction, formally adopts key court decisions, creates a stronger role for mediation, and improves enforcement procedures. Together, these changes strengthen Dubai’s position as a leading international centre for commercial dispute resolution. Lawyers and businesses with DIFC-related interests should review their dispute resolution clauses carefully to make sure any opt-in provisions are specific, clear, and expressly stated.
As Dubai’s legal and financial landscape continues to evolve, navigating the expanding jurisdiction and procedural framework of the DIFC Courts requires careful legal insight and strategic guidance. We at Khalifa Bin Huwaidan Alketbi Advocates & Legal Consultants possess extensive experience in DIFC-related disputes, commercial litigation, arbitration, and cross-border enforcement matters. The firm regularly advises businesses, investors, and international clients on complex legal matters, ensuring that parties are fully equipped to benefit from the enhanced legal framework introduced under Dubai Law No. (2) of 2025.
[1] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts.
[2] DIFC Law No. (10) of 2004.
Saudi Arabia Steps Up: Saudi Authority For Intellectual Property (Saip) Takes Global Stage As International Patent Authority[3] Dubai Law No. (12) of 2004 Concerning the Judicial Authorities at the Dubai International Financial Centre.
[4] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 22.
[5] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 14.
[6] Dubai Law No. (12) of 2004 Concerning the Judicial Authorities at the Dubai International Financial Centre, art 5(a).
[7] DIFC Law No. (10) of 2004, art 19.
[8] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 14(B).
[9] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 14(C).
[10] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 14(A)(7).
[11] Carmon Reestrutura-engenharia E Serviços Técnios Especiais, (Su) LDA v Antonio Joao Catete Lopes Cuenda [2024] DIFC CA 003.
[12] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 15.
[13] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 30(B)(4).
[14] Dubai Law No. (2) of 2025 Concerning the Dubai International Financial Centre Courts, art 13.
FAQ
Dubai Law No. (2) of 2025 is the new law governing the DIFC Courts. It replaces the earlier DIFC Courts laws issued in 2004 and introduces significant reforms to the structure, jurisdiction, and procedures of the DIFC Courts.
The Law introduces several key reforms, including:
A unified framework for the DIFC Courts’ jurisdiction;
Expanded opt-in jurisdiction for parties outside the DIFC;
Enhanced powers to grant interim and precautionary relief;
The establishment of a DIFC Courts Mediation Centre; and
Clearer governance and administrative structures for the DIFC Courts.
Yes. Article 14(B) allows parties with no connection to the DIFC to opt into the jurisdiction of the DIFC Courts, provided the agreement is clear, specific, and expressly made in writing.
The Mediation Centre provides parties with a formal alternative dispute resolution mechanism within the DIFC Courts framework. Any settlement reached through mediation may be enforced in the same manner as a court order.
The Law enhances legal certainty, strengthens enforcement mechanisms, and aligns the DIFC Courts more closely with international dispute resolution standards, making Dubai an even more attractive venue for resolving commercial disputes.
Yes. Businesses and contracting parties should review their dispute resolution clauses to ensure that any DIFC Courts opt-in provisions are clearly and expressly drafted in accordance with the requirements of the new Law.
