DIFC court determines it has inherent jurisdiction to stay proceedings in favour of DIAC arbitration

By Henry Quinlan, Natalie Wainwright and Victoria Bloom

The Dubai International Financial Centre (DIFC) court has confirmed that it has the inherent jurisdiction to grant a stay of proceedings in favour of a Dubai International Arbitration Centre (DIAC) arbitration. In so holding, the court did not follow its previous decision on this issue in the recent Injazat case. However, the court did support the finding in Injazat that the DIFC Arbitration Law, as presently drafted, fails to implement the New York Convention.

Articles 12.1 and 12.2 of the rules of the DIFC court (RDC) provide that a defendant who wishes to dispute the court’s jurisdiction to try the claim or argue that the court should not exercise its jurisdiction may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction that it may have.

The DIFC court may stay the whole or part of any proceedings or judgment either generally or until a specified date or event under article 4.2 of the RDC. Under article 4.9, the court may exercise its power on an application or of its own initiative…

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