DIFC puts judges on front line

(MUSTAFA KASMI)   

Sir Anthony Evans, Chief Justice at DIFC Courts, said the court has handled several important cases over the past year, including the Forsyth case. He said the Forsyth Partners case, which saw the Dubai Financial Services Authority (DFSA) withdraw the company’s DIFC licence in August, gave rise to a number of smaller claims from employees looking to recover losses, cementing the need for a small claims’ tribunal at DIFC Courts.

The court has also flexed its muscles abroad, with an order to freeze the bank account of a Malaysian national who successfully used an American website to pretend as DIFC to obtain funds from investors.

In an interview with Emirates Business, he talks about the cases handled by the court and about his new team, which includes the first female judge in the UAE.

What has occupied DIFC Courts’ time over the past year?

At the beginning of 2007 we had a couple of requests from DFSA for freezing injunctions in cases that were outside the purview of DIFC. They had detected a scam, where a Malaysian individual was operating through a US-based website pretending to be DIFC. They called themselves the Dubai Commodities Exchange, which doesn’t exist.

The Malaysian national, through the website, requested would-be investors to place their money in a Malaysian bank account. Money came from places such as Australia and Singapore and the account swelled within a week.

So we issued an order to freeze the bank account. It gave rise to a jurisdictional problem because this was happening outside the centre and not within it, but, on the other hand, it was clearly causing damage to DIFC. This is just an example of a case where we were able to issue an order to protect the exchange from damage.

DIFC Courts’ order was respected by Malaysian authorities and the Malaysian police closed the bank account. Another major case was over a shareholder dispute in the ownership of a firm registered at DIFC in 2006. The judgment was issued in July 2007 and it was not appealed.

The Forsyth case and the number of subsequent disputes arising from it threw the spotlight on the court last year. How has this changed the way you operate?

The Forsyth liquidation threw up an interesting situation. There were quite a few employees who were worried about their own position, so they brought individual claims and some of those involved a relatively small amount of money.

The minimum claim amount is Dh100,000, but suppose someone said he or she was owed Dh90,000 but there’s a lot more to come in future, then you might have difficulty in saying whether the claim was under the limit or not. We already had a few small cases but the Forsyth liquidation paved the way for 10 or 12 smaller cases. That made us realise that we should open a small claims’ tribunal. So we now have a simplified, cheaper procedure for small claims.

To date, the tribunal has handled 31 small claims, with as many as 20 arising out of the Forsyth case. The initial stages of a small claim is held in private meetings between the two parties, but any hearing before the court is in public.

What powers do the court have?

We enforce our judgments and orders through the Dubai Courts. We are not a criminal court, there’s no way we can send people to prison, but we would be able to do this through the Dubai Courts.

The courts are here, in one sense, to provide a service. Our job is to deal with disputes and the project we are currently engaged in is to make sure we’re ready for any disputes that arise in future.

DIFC has reached a stage where there are lots of companies and transactions and we are the people to whom they will bring their disputes to. In that sense our business will increase, but we’re not here to make money from the disputes. The fewer the disputes the better. But we are prepared to handle bigger number of cases with the appointment of six new judges.

What kind of cases do you expect at the court this year?

We all have a feeling that there might be cases arising out of all the business activities that are happening in DIFC now. Most of the businesses are obviously going to be property, banking or insurance-related.

The court was originally founded on the basis that there would be an exchange here. The transactions on the exchange are likely to throw up disputes. There’s been relatively little transactions on the exchange so far, although with the DP World initial public offering and maybe several others to follow that’s going to change soon.”

Sir Anthony Evans

Chief Justice, DIFC Courts

Sir Anthony Evans was appointed Chief Justice of the DIFC Courts in April 2005. He was a High Court judge in England and Wales from 1984 until 1992 and a Lord Justice of Appeal (a member of the Court of Appeal) from 1992 until his retirement in 2000.

Before being appointed as judge, Sir Anthony Evans practised as a barrister, specialising in commercial cases. He became Queen’s Counsel in 1971 and a Recorder of the Crown Court in 1972. As a High Court judge, he sat regularly in the Commercial Court, and from 1990 until 1992 he was judge in-charge of the Commercial List.

Since 2000, he has continued to sit from time to time in the Court of Appeal and as a member of the Judicial Committee of the Privy Council. He is also a member of the Court of Appeal in Bermuda. Sir Anthony has extensive recent experience as an arbitrator, with particular emphasis on international commercial arbitration.

DIFC courts

Established in December 2004, the DIFC Courts is an independent judicial system that has jurisdiction over matters arising within the financial centre. It is not a criminal court and has no direct powers to enforce its judgments. It acts, instead, through the Dubai Courts.

The appointment of six new judges sees the first two Emirati judges become common law international judges and the UAE’s first female judge, Tan Seri Dato Siti Norma Yaakob from Malaysia. She was previously Chief Judge of Malaya and has also acted as judge on the Malaysian Court of Appeal and the Federal Court of Malaysia.

The new judges will interpret laws and issue orders for the enforcement of laws in the DIFC.

Dubai’s financial regulator, the Dubai Financial Services Authority (DFSA), threw two subsidiaries of global asset management group Forsyth Partners out of DIFC last August. DFSA withdrew the licence of Forsyth Partners Global Distributors since it “failed to meet the applicable regulatory capital requirements and was unable to demonstrate a capacity to remedy that breach”.