Legal city: facilitating global interconnectivity

Laws surrounding international governance have come to the fore in recent months as global business connections become further entwined. Charlotte Kan discusses why judicial systems must adapt to suit the legal needs of international businesses, reflecting on the DIFC Court’s proposals to make itself more accessible

As the legal world continues to become more seamless in terms of international boundaries and global governance, key issues that have come to the fore in recent months include the legal aspects of the use of social media and the control over the flow of information; the independence of the judiciary; legal privilege; and also whether human rights laws are still relevant.

In October 2011, the IBA Middle East conference, held in Dubai, saw more than 5,000 lawyers and judges from all over the world gather to focus on the legal challenges posed by another pertinent issue of today; global interconnectivity for businesses operating across multiple jurisdictions.

A healthy judicial system not only attracts and provides freedom of choice for wealthy international or multinational entities to bring and defend their claims but also creates a strong court system. According to Abeer Jarrar, a Corporate Lawyer with Clifford Chance Dubai, who also served in Washington DC as a General Counsel, such a system would “support modern specialist courts and carry a global guarantee of enforceability, while also allowing small and medium-sized businesses to continue to drive economic growth and create a solid service-oriented hub”.

In Dubai, creating an accessible legal system for international businesses has been something of a priority over the last year and the emirate has taken a number of steps to accelerate this. The government has proposed new legislations or amendments that aim to offer further clarity and transparency to the current mechanism and processes of the legal environment for businesses, and provide new legal tools in response to the ever-changing economic and developmental imperatives. In October, the jurisdiction of the DIFC Courts was expanded beyond its initial limits subject to certain conditions.

The government move means companies not registered in the DIFC (Dubai International Financial Centre) – a federal financial free zone administered by the government of Dubai – can now use their courts, where they have the option of hearing their cases in Arabic or English, using civil or common law, whereas previously they would have had to do it in local courts in Arabic.

Diana Hamade, an Emirati lawyer who is a consultant and adviser on UAE laws and who specialises in corporate, finance and real estate at Herbert Smith, believes that the government’s recent proposal for new legislation on the regulation of companies, financial restructuring and bankruptcy are positive for international businesses on many counts.

“[The recent developments] offer businesses the opportunity to settle disputes with jurisdictions other than those of local courts,” says Hamade. “It also gives an alternative within the region as it concurs with South-East Asia, Levant, the Middle-East and Africa.”