Legal Updates
5 min read

Clarifying the DIFC's Legal Framework: The Role of English Common Law

Written by
JP Legal
Published on
November 20, 2024

Introduction

The Dubai International Financial Centre Authority (DIFCA) has initiated a consultation for proposed changes to the Law on the Application of Civil and Commercial Laws in the DIFC, amending DIFC Law No. 3 of 2004 (the “Application Law”). These amendments, if enacted as DIFC Law No. 6 of 2024 (the “Proposed Amendment Law”), aim to clarify the source and interpretation of DIFC law following feedback due on June 1, 2024. This article explores the motivations behind these changes and their potential impact on the DIFC's legal landscape.

Historical Context

Since its establishment, the DIFC has operated under a framework wherein English common law supplemented its statutes. This practice provided a fallback mechanism, allowing parties to resort to English common law when DIFC laws lacked specific provisions. However, the DIFC Court of Appeal's decision in The Industrial Group Limited v Abdelazim EL Sheikh EL Fadil Hamid [2022]DIFC CA 005/006 (“Industrial Group”) challenged this assumption by emphasizing the statutory nature of DIFC law, leading to uncertainty among legal practitioners.

Implications of the Industrial Group Case

The Industrial Group decision marked a pivotal moment by rejecting the assumption that English common law automatically applied in the DIFC. The Court of Appeal ruled that DIFC law must be interpreted strictly within its statutory boundaries, resulting in the failure of claims for malicious prosecution and abuse of process. This decision highlighted the need for legislative clarification to provide certainty on the applicability of common law principles within the DIFC.

Addressing the Source of Law

In response to the confusion following the Industrial Group ruling, the Proposed Amendment Law introduces new provisions to address the source and interpretation of DIFC law. New Article 8A stipulates that DIFC law is primarily determined by its statutes and relevant court judgments. It permits the application of English common law principles only when appropriate and not expressly excluded by DIFC statutes. This ensures that English common law can fill gaps in DIFC law, provided it aligns with the circumstances of the case and statutory provisions.

Interpretation Guidelines

The Proposed Amendment Law also introduces Article 8B, which guides the interpretation of DIFC statutes. This article acknowledges that DIFC law is influenced by a variety of legal traditions, including the UNIDROIT Principles and the UNCITRAL Model Law. Consequently, the interpretation of DIFC statutes may draw on principles from both common law and non-common law jurisdictions. This approach allows for a more nuanced and context-sensitive application of legal principles, fostering a dynamic legal environment in the DIFC.

Conclusion

The proposed legislative amendments reflect the DIFC's commitment to providing a clear and robust legal framework. By potentially incorporating English common law as a supplementary source, the DIFC aims to enhance legal certainty and maintain its status as a leading financial center in the MEASA region. The changes seek to resolve ambiguities arising from the Industrial Group decision and offer a structured approach for the application and interpretation of DIFC law.

These developments signify a progressive step towards a more comprehensive legal system, reaffirming the DIFC's dedication to high standards of legal practice. The DIFC's readiness to adapt and clarify its legal framework ensures it remains an attractive jurisdiction for international commercial disputes.

Latest posts

Services
5 min read

Uniqus Enters Saudi Arabia with JP Legal by Its Side

How Strategic Legal Counsel Supports Seamless Market Entry in the GCC In this case study, JP Legal showcases its role in supporting Uniqus — a global ESG and Accounting advisory platform — with their successful entry into the Saudi market, a key milestone in their regional expansion. JP Legal provided end-to-end legal support for Uniqus' establishment in the Kingdom, covering entity structuring, regulatory compliance, registration, and licensing. The focus was not just on process, but on strategic scalability and long-term success. The blog highlights JP Legal’s expertise in: Guiding professional service firms through GCC market entry Providing on-the-ground support and regulatory insight Delivering tailored legal solutions for fast-growing, tech-enabled companies With the Kingdom of Saudi Arabia (KSA) continuing to open its doors to international firms, JP Legal positions itself as a trusted legal partner for sustainable growth in the GCC. 📩 Reach out to explore how JP Legal can support your next expansion.
Services
5 min read

Strategic Growth Needs Strategic Counsel:

Inside JP Legal’s $1B+ M&A Practice Across the GCC JP Legal has advised on mergers, acquisitions, and joint ventures exceeding $1 billion in value, serving clients across Saudi Arabia, the UAE, and the wider GCC. Their approach goes beyond deal execution — offering end-to-end legal support that spans: Deal Structuring: Aligning transactions with business goals while ensuring cross-jurisdictional compliance Due Diligence: Identifying legal and regulatory risks to protect client interests Regulatory Compliance: Navigating Zakat, tax, investment, and competition frameworks Post-Acquisition Integration: Supporting operational alignment and long-term success Serving sectors from tech and logistics to retail and manufacturing, JP Legal combines regional insight with global execution. Their M&A practice is built on clarity, strategy, and trust, offering tailored legal guidance at every stage of the transaction. Thinking M&A in the GCC? JP Legal is ready to guide your next move.
Services
5 min read

Navigating Mergers & Acquisitions with Confidence: How JP Legal Supports Every Step

At JP Legal, we offer end-to-end legal support for mergers, acquisitions, and strategic investments across the GCC. Our M&A team is known for its practical, goal-aligned approach—helping clients navigate the legal, regulatory, and strategic complexities of each transaction. From structuring and due diligence to negotiation, closing, and post-deal integration, we guide every stage with clarity and precision. With deep regional insight and a strong emphasis on collaboration, we don't just provide legal support—we become a trusted partner in achieving successful, compliant, and strategically sound outcomes.
Announcements
5 min read

FCA Introduces Major Overhaul to UK Listing Rules

The FCA's biggest listing reform in 30 years streamlines rules, boosts flexibility, and attracts innovators—simpler listings, enhanced voting rights, and fewer hurdles make UK markets more competitive.