Sheikh Mohamed bin Rashid Al Maktoum, the emir of Dubai, has released a new Dubai International Financial Centre (DIFC) Law in a move that will affect dispute resolution mechanisms in the financial free zone. The new law’s antecedent, the 2004 DIFC Law, heralded the DIFC’s creation.

One aspect of the law that has not changed is contracting parties’ freedom to choose a contract’s governing law if the contract is concluded in the DIFC. Article 19d tacitly gives parties the right to choose a law other than the DIFC Laws and DIFC Regulations.

However, there are several key differences between the previous law and the new version. The body formerly known as the DIFC Dispute Resolution Authority has been officially divided into two distinct entities: the DIFC Arbitration Institution and the DIFC Courts.

Article 14e of the DIFC law states “the DIFC Courts will have exclusive jurisdiction to interpret the DIFC Laws and the DIFC regulations”. Although the DIFC Arbitration Centre is now a separate body, this article provides a means through which a party can challenge the execution arbitration ruling before the DIFC Courts on the basis of an incorrect interpretation of DIFC Law.

Dispute resolution clauses in contracts referring to the “jurisdiction of the DIFC” should be amended by the relevant parties as soon as possible so as to clarify whether such jurisdiction refers to litigation or arbitration. Otherwise, there have been no changes to the arbitration procedures in the DIFC.