DIFC amends Application Law to provide statutory certainty to source of DIFC Law
The Dubai International Financial Centre (DIFC) enacted amendments to the DIFC Law on the Application of Civil and Commercial Laws in DIFC to provide statutory certainty to the source of DIFC Law and how it may be interpreted.
Further amendments have also been made to the DIFC Real Property Law and Real Property Regulations. The amendment laws were enacted on 14 November and came into effect on 21 November.
Since the inception of DIFC, it has been understood by practitioners that DIFC Laws are supplemented, or ‘backstopped’, by common law. The DIFC Authority (DIFCA) believes it necessary to provide statutory certainty as to the source and interpretation of DIFC law and to ensure that both English Common Law, and developments in other established common law jurisdictions, remain a central feature of DIFC’s legal system.
To address the Source of Law issue, a new Article 8A has been added to the Application Law, which provides that DIFC Law is to be determined first by reference to DIFC statute, and DIFC Court judgments interpreting and applying DIFC statute. Article 8A then provides that DIFC Statute is supplemented by the common law, including the principles and rules of equity.
In determining the common law for DIFC, the DIFC Courts may have reference to the common law of England and Wales and other common law jurisdictions. The amendment also clarifies that the DIFC Courts, like any leading common law courts, have the power to consider comparative jurisprudence from a variety of jurisdictions in developing or modifying common law rules and principles of equity on a case-by-case basis, but that they do not have broader legislative or policy making powers.
A new Article 8B of the Law of Application also confirms that interpretation of DIFC statute may be guided by principles developed in respect of analogous laws in established common law jurisdictions. Additionally, if a DIFC Statute is based on an international model law, its interpretation may further be guided by international jurisprudence interpreting and applying the international model law, as well as interpretative aids and commentary published by international bodies regarding the international model law.
“The amendments confirm that DIFC laws are supplemented with reference to English Common Law and the laws of other common law jurisdictions,” said DIFCA Chief Legal Officer Jacques Visser. “These important amendments provide statutory confirmation, for practitioners and the Courts, regarding the source of law in DIFC and the way in which DIFC legislation may be interpreted.”
DIFC has introduced a Mortgage Registration fee of 0.25% of the value of a mortgage being registered by a purchaser of real property. This is in line with current onshore practice and will cover the administration required by the office of the Registrar of Real Property to review the documents and process registration.
DIFC has also extended the period of registration of ‘off-plan sales’ from the current 30-day period to 60 days, to better accommodate the timetable for off-plan unit purchases, from launch stage to production of a final off-plan sales agreement. The extension provides purchasers of off-plan units with more time to register such transactions and pay the Freehold Transfer Fee.
