The UAE’s Dual Layer Dispute Resolution Framework: A Closer Look

The United Arab Emirates (UAE) features a sophisticated and multi-layered dispute resolution framework, uniquely integrating both civil and common law systems.  

This dual approach provides businesses operating within the jurisdiction with strategic options, from litigation in mainland courts to arbitration in internationally recognized forums like the DIFC and ADGM. 

Ronin Legal examines the structure, interaction, and enforcement mechanisms across these systems to offer insights into optimal forum selection. 

Dual Legal Systems  

The UAE operates two distinct legal systems. The first is the civil law system, which applies across the mainland and in most free zones, such as the Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA), and Ras Al Khaimah Economic Zone (RAKEZ).  

The second is the common law system, applicable within the financial free zones of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). These jurisdictions are modelled on English common law and provide a legal environment familiar to international commercial parties.  

Mainland UAE Courts 

Mainland UAE courts operate under a civil law system and have broad jurisdiction over civil, commercial, and labour disputes, applying key statutes such as the Civil Code (Federal Law No. 5 of 1985) and the Commercial Transactions Law (Federal Law No. 18 of 1993).  

Proceedings are conducted in Arabic, and all non-Arabic documents must be submitted with certified translations. 

These courts retain jurisdiction over disputes arising outside of the financial free zones, unless the parties have contractually agreed to arbitration or selected the DIFC or ADGM courts as the forum for dispute resolution. 

The court system follows a three-tier structure comprising the Court of First Instance, the Court of Appeal, and the Court of Cassation (or the Federal Supreme Court at the federal level), offering parties the opportunity for comprehensive appellate review.  

DIFC Courts and Arbitration 

The DIFC Court System operates under common law principles and uses English as its official language.  

It features a hierarchy comprising a Small Claims Tribunal for disputes under AED 500,000, a Court of First Instance with specialized divisions, and a Court of Appeal for final appeals.  

The DIFC also allows for Opt-In Jurisdiction, enabling parties to contractually choose DIFC Courts or DIFC-seated arbitration for their disputes regardless of their physical presence in the DIFC. 

DIFC Arbitration is governed by DIFC Arbitration Law No. 1 of 2008, a DIFC-specific law based on the UNCITRAL Model Law.  

Following the 2021 abolition of DIFC-LCIA, the Dubai International Arbitration Centre (DIAC) now administers many arbitrations from its DIFC branch, with DIAC's 2022 Rules defaulting to the DIFC as the seat. 

ADGM Courts and Arbitration 

The ADGM operates under a common law system, with proceedings conducted in English. Its court structure comprises a Court of First Instance covering Commercial, Employment, and Small Claims divisions and a Court of Appeal for final appeals. 

ADGM arbitration is governed by the ADGM Arbitration Regulations 2015, enacted by the ADGM Board of Directors and based on the UNCITRAL Model Law. 

The ADGM Arbitration Centre offers modern facilities for proceedings, while ArbitrateAD which replaced the Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC) in 2024 designates ADGM as the default seat under its 2024 Rules. 

While parties outside the ADGM can opt into its jurisdiction through express agreement, ADGM does not function as a conduit jurisdiction for enforcing foreign judgments or arbitral awards, unlike the DIFC. 

DMCC Dispute Resolution Landscape 

The DMCC does not operate its own judicial system or separate body of substantive laws. Consequently, in the absence of an agreed-upon alternative dispute resolution mechanism, disputes involving DMCC entities will default to the Dubai Courts, which function under the UAE mainland’s civil law framework. 

While litigation typically occurs through the Dubai mainland courts, DMCC companies retain the flexibility to opt for arbitration. This can be conducted through institutions such as DIAC, ArbitrateAD or established international bodies like the ICC (International Chamber of Commerce) and LCIA (London Court of International Arbitration).  

The DMCC Dispute Centre complements these options by focusing on voluntary mediation, particularly for commercial and employment-related matters. Mediations are conducted under the confidential and cost-effective DMCC Mediation Rules. Any resulting settlement, once agreed upon, becomes enforceable through ratification by the Dubai Court. 

Interplay Between Jurisdictions 

The UAE has taken steps to ensure coordination and enforceability across its various judicial and arbitral systems.  

Judgments and arbitral awards issued in the mainland are enforceable in the DIFC under Dubai Law No. 2 of 2025, which replaced Law No. 12 of 2004. A 2018 Memorandum of Understanding enables mutual recognition and enforcement between ADGM and mainland courts. DIFC and ADGM courts also recognize each other’s decisions. 

To address conflicts over jurisdiction, the Conflict of Jurisdiction Tribunal (CJT) was established under Dubai Decree No. 29 of 2024, replacing the earlier Joint Judicial Committee. The CJT adjudicates jurisdictional disputes involving DIFC and other Dubai courts. 

Enforcement of Arbitral Awards 

Enforcement of arbitral awards in the UAE varies across its jurisdictions due to the dual legal framework.  

On the mainland, foreign arbitral awards are enforced under the New York Convention 1958, which the UAE joined in 2006. Applications go to mainland courts, which review for compliance with Federal Law No. 6 of 2018 (amended by Federal Decree-Law No. 15 of 2023). 

Refusal grounds are limited to procedural issues, like improper notification or non-arbitrable matters, or breaches of UAE public policy, narrowly defined but potentially including Sharia-related concerns. Enforcement requires Arabic translations of awards and may face delays due to the court’s three-tier structure. 

In the DIFC and ADGM, enforcement of foreign and domestic awards is more efficient. The DIFC, under Arbitration Law No. 1 of 2008, and ADGM, under Arbitration Regulations 2015, both based on the UNCITRAL Model Law, enforce awards with minimal scrutiny, focusing on procedural compliance and public policy within their common law systems.  

The DIFC acts as a conduit jurisdiction, enabling enforcement of foreign awards for execution in the mainland or other free zones under Dubai Law No. 2 of 2025. The ADGM does not serve as a conduit, requiring direct mainland enforcement for awards executed outside its jurisdiction.  

Other free zones, such as DMCC or JAFZA, lack independent arbitration frameworks, and enforcement of foreign awards defaults to mainland courts unless parties opt for DIFC or ADGM arbitration 

Outside the UAE, DIFC and ADGM awards benefit from New York Convention reciprocity, ensuring enforceability in over 170 countries.  

DIFC awards may be more readily recognized due to the jurisdiction’s conduit role and established reputation. Mainland and other free zone awards, governed by Federal Law No. 6 of 2018, are also enforceable abroad under the Convention, but their civil law basis and potential public policy issues complicate enforcement in jurisdictions less familiar with UAE law.  

Considerations for Forum Selection 

Strategic forum selection in the UAE depends on several key considerations. One of the most important is matching the forum to the nature of the dispute to ensure access to specialist judges or arbitrators with relevant industry expertise.  

This also allows parties to adopt procedures suited to the complexity of the matter, for example opting for DIAC in construction disputes, DIFC for financial matters, or expert determination mechanisms in technically nuanced cases. 

Parties must also evaluate the legal system and language of the chosen forum. The UAE mainland courts operate under a civil law framework with proceedings conducted in Arabic, while the DIFC and ADGM follow common law systems and conduct proceedings in English.  

For international parties, particularly those from common law jurisdictions, DIFC and ADGM offer greater predictability and familiarity, reducing the need for translations and aligning more closely with the language and structure of most international commercial contracts. 

In addition, arbitration especially when seated in the DIFC or ADGM offers an expedited and cost-efficient path to resolution compared to protracted litigation before mainland courts. This is due to streamlined procedures, reduced formality, and limited avenues for appeal, which contribute to faster outcomes and lower overall legal costs. 

Confidentiality is another major advantage of arbitration. Unlike the generally public nature of onshore UAE court proceedings, arbitral rules such as Article 38 of the DIAC Rules 2022 and Article 47 of the ArbitrateAD Rules 2024 emphasize privacy, making arbitration particularly attractive for sensitive commercial and employment disputes.  

This degree of confidentiality stands in marked contrast to the routine publication of judgments by the UAE’s higher onshore courts.