The private sector plays a key role in boosting the competitiveness of the UAE economy and achieving the vision of Sheikh Mohammed bin Rashid Al Maktoum, UAE vice president, prime minister, and ruler of Dubai, to establish Dubai as a global capital of the digital economy.
The ‘Digital Economy Strategy’ aims to double the contribution of the digital economy to the UAE’s gross domestic product (GDP) from 9.7 percent as of April 2022 to 19.4 percent within a period of 10 years.
Dubai aims to attract 300+ new digital businesses to the city by the end of 2024, by becoming home to over 20 unicorns by 2030 and having a digital economy worth in excess of $100 billion annually by 2031, or 1/5th of today’s national GDP which hovers around $500 billion.
The DIFC has recently established a new specialized court for the digital economy, in order to account for its rising role and influence in the day-to-day affairs of the Emirate.
In 2022, the UAE launched the Virtual Assets Regulatory Authority (VARA) which rolled out new legislation aimed at making Dubai the global center for crypto assets and related industries such as the metaverse.
Read: APIs are crucial for UAE’s digital transformation
The new specialized court is intended to cover a wide variety of fields including big data, blockchain technologies, artificial intelligence, cloud services, unmanned aerial vehicles, 3D printing technologies, and robotics.
Background
The DIFC Courts were established in 2004 to resolve disputes involving entities established in the DIFC. Such disputes would be governed in accordance with “DIFC law”, a codified version of English common law.
In 2011, the scope of the DIFC Courts was expanded to allow for an “opt-in jurisdiction”. The reforms allowed any parties worldwide, should they so choose, to have their disputes resolved by the DIFC Court. This was attractive to litigants as the DIFC provides a neutral venue for the resolution of disputes subject to English common law principles.
In 2017, the DIFC established a specialist technology and construction division. The Rules of the DIFC Courts (“the RDC”) were amended by the inclusion of Part 56 which provided for specialist rules in claims which were technically complex. At present, most claims handled by this division are construction related.
The new court for the digital economy should be seen in this context. Part 58 of the RDC, which came into force on 14 December 2022, establishes the Digital Economy Court (“DEC”). The DEC operates as a division of the DIFC Courts meaning that the general DIFC court rules continue to apply to all Digital Economy Court Claims (“DEC Claims”) unless Part 58 says otherwise.
For a claim to be admitted into the DEC, a party must establish that it meets the criteria contained in Part 58 of the RDC. DEC Claims are defined broadly with Part 58.7 outlining a “non-exhaustive list” including claims relating to fintech and digital assets.
Consumer DEC Claims
The new rules distinguish between “DEC Claims” and “Consumer DEC Claims”. A consumer DEC Claim is defined as a DEC Claim that has a value of less than AED 500,000. There is no requirement for a consumer to be involved.
Consumer DEC Claims will be held in private with any judgments issued anonymized before publication. If Consumer DEC Claims are valued at less than AED 100,000, the default position is that the “paper determination procedure” will be used. This allows a court to make a determination without a hearing.
It follows that the Consumer DEC Claims procedure is intended to offer parties a speedy resolution to their disputes.
How will DEC Claims differ from regular DIFC proceedings?
The new rules make explicit provisions for the use of technology both at hearings and while filing documents before the court. As well as having the power to conduct proceedings digitally, the Court is empowered to modify digital assets and use smart forms. Practice directions are to be issued setting out the scope of such powers.
The DEC is also expressly empowered to allow the service of documents by email or through social media. Indeed, parties are obliged to nominate an email address when filing a claim form and/or an acknowledgment of service.
Finally, Part 58 provides for the appointment of a judge in charge of the DEC. Parties to a DEC Claim can therefore expect that a specialized judge will be assigned to their case. This has considerable value in disputes that require technical expertise.
Conclusion
The establishment of the DEC should be welcomed by practitioners. It showcases Dubai’s commitment to becoming a hub for emerging technologies and establishes a clear legal framework in which disputes involving such technologies can be given their due attention and get resolved.
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