In the recent case of Injazat Capital Limited v Denton Wilde Sapte, the Courts of the Dubai International Finance Centre (DIFC) were asked to stay or dismiss proceedings alleged by the Defendant to have been commenced in breach of an agreement to refer disputes to arbitration in London. In dismissing the application, Justice Sir David Steel held (1) that the DIFC Courts have no power under Article 13 of the DIFC Arbitration Law to stay or dismiss proceedings in favour of arbitrations situated outside the DIFC, and (2) that in any event the alleged arbitration agreement was invalid under its governing law (which was the law of Dubai). The first of these rulings has potentially significant implications: in denying the availability of a stay in respect of arbitrations with a foreign seat, DIFC law is at variance with English law and the UNCITRAL Model Law, and is (as the Court noted) arguably inconsistent with the New York Convention (to which the UAE is a party).
David Murray, who is registered to practise in the DIFC Courts, successfully represented the Claimants in resisting the application. The judgment is available here: http://difccourts.complinet.com/en/display/display_main.html?rbid=2725&element_id=9028
