United Arab Emirates - Part II Country Report - Handbook on Third-Party Funding in International Arbitration
Originally from Handbook on Third-Party Funding in International Arbitration
1.1. TPF Regime in the UAE
1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well-established practice)?
TPF has not been commonly used in the United Arab Emirates (“UAE”).
The historical lack of interest in TPF arose from the perceived lack of uncertainty surrounding litigation and arbitration in the UAE. In terms of litigation there was a perceived lack of uncertainty regarding the final judgments which would be rendered by the UAE Courts, irrespective of the merits of the claim. There was also a perceived lack of uncertainty surrounding the subsequent enforcement of successful judgments and arbitration awards.
However, the region is starting to attract attention from established international Funders. Additionally, both potential litigants and counsel are becomingly increasingly interested in TPF. The increased interest in TPF has arisen from:
(1) The growth in the UAE landscape and the greater certainty arising from the creation of the Dubai International Financial Centre (“DIFC”) freezone in the Emirate of Dubai, and its specialist financial courts, the DIFC Courts. The DIFC Courts were created in 2004. “The DIFC Court is a Common Law and English language jurisdiction within Dubai, whose courts system is largely modeled on the English Commercial Court,” and whose judgments can be enforced as judgments of the Dubai Courts. Parties are free to submit their disputes to the exclusive jurisdiction of the DIFC Courts. It is worth mentioning that more recently we have seen the creation of the Abu Dhabi Global Market (“ADGM”) freezone in the Emirate of Abu Dhabi as well as its specialist financial courts the, ADGM Courts. The ADGM Courts are marketed as supporting the ADGM with a fully independent, common law framework to adjudicate civil and commercial disputes and provide another attractive forum for TPF.
(2) Greater resolution of disputes in the region by way of arbitration as well as an increasing trend in the enforcement of local and international arbitration awards by the UAE.
For the purposes of answering the questions in this questionnaire we will consider the position both from the “onshore” UAE law perspective (i.e., the position before the UAE Courts) and the “offshore” DIFC law perspective (i.e., the position before the DIFC Courts). The ADGM Courts are relatively new and therefore unless we indicate otherwise, our answers will not apply to ADGM Court proceedings.