Dubai International Financial Centre (DIFC), recognized as the premier global financial hub in the Middle East, Africa, and South Asia (MEASA) region, has implemented amendments to the DIFC Law governing the Application of Civil and Commercial Laws (the “Application Law”). These updates bring greater legal clarity regarding the origins of DIFC Law and its interpretation. Additionally, revisions have been made to the DIFC Real Property Law and Real Property Regulations.
Real property law and regulations
DIFC has introduced a Mortgage Registration fee set at 0.25 percent of the value of a mortgage being registered by a real property purchaser. This measure aligns with current practices in the onshore market and will cover the administrative tasks required by the Registrar of Real Property to review documentation and process registrations.
Additionally, DIFC has extended the registration period for Off-Plan Sales from the existing 30 days to 60 days. This change aims to better accommodate the timeline for Off-Plan Unit purchases, from the initial launch to the finalization of the Off-Plan Sales Agreement. The extension provides buyers of Off-Plan Units with additional time to register these transactions and pay the Freehold Transfer Fee.
Jacques Visser, chief legal officer at DIFC Authority, expressed his satisfaction regarding the enactment of significant amendments to the DIFC Law on the Application of Civil and Commercial Laws. He noted that these changes reinforce DIFC’s status as an international common law jurisdiction and as the leading financial center in the MEASA region. He highlighted that the amendments confirm that DIFC laws are supplemented by references to English Common Law and the laws of other common law jurisdictions. According to him, these important updates provide statutory clarity for practitioners and the Courts concerning the sources of law within DIFC and the interpretation of DIFC legislation.
Law of application
Source of law
Since DIFC’s establishment, it has been recognized by practitioners that DIFC Laws are supported by common law. DIFCA asserts the need for statutory clarity concerning the source and interpretation of DIFC law, particularly as DIFC often considers global best practices beyond just English statutory law. This necessity has led to the proposed amendments.
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Other amendments
To address the Source of Law concern and following public consultation, a new Article 8A has been incorporated into the Application Law. This article clarifies that DIFC Law is primarily determined by referencing DIFC statutes and the judgments of DIFC Courts that interpret these statutes. Furthermore, recognizing that DIFC law is not strictly statutory, Article 8A specifies that DIFC statutes are supplemented by common law principles, including the rules of equity. In determining the common law applicable to DIFC, the DIFC Courts may refer to the common law of England and Wales, as well as other common law jurisdictions.
The final version of Article 8A differs from the initial consultation proposal, which suggested importing specific common law doctrines, causes of action, defenses, and remedies into DIFC Law. The revisions clarify that DIFC Courts, similar to other leading common law courts, have the authority to consider comparative jurisprudence from various jurisdictions when developing or modifying common law rules and equity principles on a case-by-case basis, without possessing broader legislative or policy-making powers.
A new Article 8B within the Law of Application affirms that the interpretation of DIFC statutes may be informed by principles from analogous laws in established common law jurisdictions. Moreover, if a DIFC statute is derived from an international model law, its interpretation may also draw on international jurisprudence related to that model law, along with interpretative aids and commentary published by international bodies.
These amendments are designed to ensure that both English Common Law and developments in other established common law jurisdictions remain integral to the legal framework of DIFC.
These amendments are intended to enhance the regulatory framework within DIFC, aligning it with best practices.
The Amendment Laws were enacted on November 14, 2024, and took effect on November 21, 2024.
