Legal certainty boosts business ties between Australia and the UAE
Tuesday, September 17, 2013/
It hasn’t had much air time, but a new Memorandum of Guidance between the Dubai International Financial Centre (DIFC) Courts and the NSW Supreme Court should boost the confidence of Australian investors and exporters considering the UAE as a target market.
So, who signed what, exactly?
On September 9 the New South Wales Supreme Court and the Dubai International Financial Centre (DIFC) Courts signed a Memorandum of Guidance (MoG) at a ceremony in Sydney.
The milestone document, which covers the mutual enforcement of liquidated (money) judgments, was signed by NSW Chief Justice Tom Bathurst and DIFC Courts Chief Justice Michael Hwang, in the presence of NSW Deputy Premier and Minister for Trade and Investment, Andrew Stoner and the Charge d’Affaires for the UAE Embassy to Australia, Abdulbaset Al Marzooqi.
Why would NSW and Dubai courts bother signing a MoG?
The DIFC Courts are Dubai’s established English language, commercial common law courts, and form a key part of the legal system of the UAE – Australia’s largest Middle Eastern trading partner. The NSW Supreme Court has unlimited jurisdiction within Australia’s largest state in civil matters, and also hears the most serious criminal matters. Its civil and commercial jurisdiction is the busiest of any Australian court, and is internationally renowned for its experience and expertise in dispute resolution.
The signature of the MoG represents a significant step, as it signals a commitment by these superior courts to using common rules and standards when it comes to enforcing liquidated (money) judgments. This new commitment to harmonised rules in a key area of commercial law is particularly important because Dubai and New South Wales both serve as major investment gateways into their respective countries and wider regions. A high number of cross-border commercial transactions take place between the two states, which means that there is the potential for a large number of commercial disputes to occur between.
What does the MoG cover?
The MoG is concerned only with judgments requiring a person to pay a sum of money to another person. It also sets out the procedures which a person seeking to enforce a NSW Supreme Court judgment in the DIFC Courts would need to follow, and vice versa. The enforcement guidance has been written with the objective of ensuring that claims are dealt with swiftly and generally without the need for oral evidence.
Why does the MoG matter?
The MoG represents the first time an Australian court has entered into an understanding to consult and cooperate with the DIFC Courts on the enforcement of each party’s money judgments in the other’s courts. The document can be expected to give certainty and clarity to investors, businesses and legal professionals operating in each jurisdiction by defining, for the first time ever, the method of enforcement of judgments.
What will it mean for my business?
Essentially, if you deal with the DIFC or your business with Dubai is governed by the DIFC’s jurisdiction, the MoG means that you can be more confident of being able to enforce a judgment made by the DIFC Courts, in Australia, using the NSW Supreme Court and vice versa.
Cynthia Dearin is managing director of Dearin & Associates, a boutique international market entry consulting firm.