Introduction
The Abu Dhabi Global Market (“ADGM”) is a financial free zone established pursuant to the Federal Decree No. 15 and Abu Dhabi Law No. 4 of 2013 (“Founding Law”) in the Emirate of Abu Dhabi and operating on the Al Maryah Island and Al Reem Island. Pursuant to its establishment, the ADGM Courts became operational on May 30, 2016 and are established as common-law courts, based on the English court system, in the midst of a predominantly civil law Middle East region.
ADGM Court Structure and Jurisdiction
The laws and regulations applicable in the ADGM comprise of the ADGM Courts, Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations, 2015 (“ADGM Courts' Regulations”), complemented by the ADGM Court Procedure Rules (“CP Rules”) and Practice Directions (“PD”). The ADGM Courts are based on a two-tier system entailing the Court of First Instance and the Court of Appeal. As per Article 13(6) of the Founding Law, the jurisdiction of the Court of First Instance is enforced in civil or commercial cases involving the ADGM or any authorities and establishments thereof, any lawsuit arising out of or in relation to a contract or transaction conducted wholly or in part in the ADGM, and any appeal against a decision or procedure issued by an ADGM authority. The Court of First Instance consists of a Civil and Commercial Division, Employment Division and Small Claims Division, the jurisdiction of which is as per the following understanding:
- Commercial and Civil Division: As per Rule 2 of the Divisions and Jurisdiction (Court of First Instance) Rules, 2015 (“Court of First Instance Rules”) the Commercial and Civil division has the jurisdiction to hear and determine a commercial or insolvency claim or dispute wherein the value of the claim exceeds USD 100,000 (United States Dollars One Hundred Thousand). The aforementioned value of the claim is inapplicable to insolvency disputes. The said division has no jurisdiction over family proceedings and claims arising out of Employment Regulations, 2019. However, the Commercial and Civil Division extends its jurisdiction to an appeal in relation to the judgments of the Small Claims Division.1
- Employment Division: As per Rule 3 of the Court of First Instance Rules, the Employment Claims Division has exclusive jurisdiction to hear any claims in relation to the enforcement of rights under the Employment Regulations, 2019 or any other employment matter.
- Small Claims Division: As per Rule 3 of the Court of First Instance Rules, the said division has jurisdiction over the matters that fall under the Commercial and Civil Division, except insolvency proceedings. The jurisdiction of the Small Claims division is where the value of the claim is less than USD 100,000 (United States Dollars One Hundred Thousand). However, disputes falling within Employment Division jurisdiction, where all parties have agreed in writing that the relevant claim or dispute is to be heard in or determined by the Small Claims Division may extend the latter's jurisdiction.2
As a court of final instance the Court of Appeal has jurisdiction to consider appeals made against judgments or decisions issued by the Court of First Instance, and to interpret any articles of the ADGM laws and regulations.
Initiating a Claim
The CP Rules and the corresponding PD 2, PD 3, and PD 4 of the Commercial and Civil Division, Small Claims Division and Employment Division respectively, lay down the procedure for filing a claim. The proceedings commence on the date entered in the claim form which is issued by the respective Court at the claimant's request. Any claim form to commence proceedings must state the final orders that the claimant seeks, the relevant facts, and the particulars of any sum sought by way of interest.
As per CP Rule 27, a claimant may use a single claim form to initiate all claims, whereby the said claim form must state the final orders and damages by way of interest that the claimant seeks.
- Commercial and Civil Division: As per PD 2.1
and CP Rule 27, a claim form to commence proceedings in the
Commercial and Civil Division. The claim form must be in accordance
with Form CFI 1 and must not exceed 50 (fifty) pages.
If a claimant seeks the Court's decision on a question of law not involving a substantial dispute of fact, it may use the simplified procedure as stipulated under CP Rule 30, whereby the claim form must be filed in accordance with Form CFI 6, with witness evidence statement as per Form CFI 15. Under the simplified procedure the defendant is not required to file a defence.3However, the simplified procure is inapplicable in the instances of libel, slander, fraud, malicious prosecution or false imprisonment.4A defendant may contend against the use of the simplified procedure if a substantial dispute of fact exists.5
- Small Claims Division: As per PD 3.1 and CP Rule 309, a claim form to commence proceedings in the Small Claims Division must state the defendant's registered office if the same is an entity. The claim form must be in accordance with Form CFI 2 and must not exceed 10 (ten) pages.
- Employment Division: As per PD 4.1 and CP Rule 315, a claim form to commence proceedings in the Employment Division must state the details of documents recording the terms of employment between the claimant and defendant. Additionally, the claim form must state the rate of remuneration of the claimant prior to the commencement of the claim. The claim form must be in accordance with Form CFI 2 and must not exceed 15 (fifteen) pages.
Service of Claim Form and Acknowledgment of Service
In accordance with part 4 of the CP Rules, in the event, the service of the claim form is within the jurisdiction of the United Arab Emirates (“UAE”), the registry of the respective court serves the claim form on the defendant. If the defendant is to be served outside the UAE, the claim form is served by the claimant or as directed by the court and must entail the grounds on which the claimant is entitled to bring the claim against the defendant. A claim form can only be served outside the jurisdiction if the ADGM Courts have the power to determine the said claim under the applicable regulations of the ADGM, and a real issue exists between the claimant and the defendant for the court to try or for a person to be made a proper party to the claim.6As per CP Rule 20, the court may dispense with the service of a claim form if exceptional circumstances exist.
A claim form may be served by personal service on an individual, on an entity, and through email or other means of electronic communication, or at any other specified place, whether within or outside the jurisdiction. However, if a claim is against any ADGM authority, the claim form may only be served through email. A claim form may be served only in accordance with the terms of the contract stipulating the same from which the claim has arisen.7The deemed time of service in any chosen method of service is before 4 p.m. on the day of the service or the next day.8If a claim form has been issued against a defendant but has not been served within the below stipulated timeline, he may file a notice against the claimant requiring him to serve the same. The Court may dismiss the claim if the claimant fails to comply with the said notice.9
For Commercial and Civil Division, the service of the claim form must be completed within 4 (four) months (within UAE) or 6 (six) months (outside UAE) after the date of issue of the claim form. The afore-stated timeline may be extended on an application to the Court.
The defendant is required to file an acknowledgment of service in Commercial and Civil Division within 14 (fourteen) days of service of the claim form, as per PD 2.9. However, the same is not required in the Small Claims Division and Employment Division.
Conclusion
The ADGM Courts represent a significant development in UAE's legal landscape and provide a robust framework in a financial free zone for resolving commercial civil and employment disputes. The courts' division into specialized branches ensures efficient handling of various claims based on their nature and value. The detailed procedures for serving claim forms, within and outside the UAE jurisdiction, along with specific timelines and acknowledgment requirements, demonstrates the courts' commitment to procedural fairness.
Footnotes
1. ADGM Court Procedure Rules, 2016, Rule 205.
2. Practice Direction 3.1.
3. ADGM Court Procedure Rules, 2016, Rule 34.
4. Practice Direction 2.6
5. ADGM Court Procedure Rules, 2016, Rule 33.
6. ADGM Court Procedure Rules, 2016, Rule 24.
7. ADGM Court Procedure Rules, 2016, Rule 17.
8. ADGM Court Procedure Rules, 2016, Rule 18.
9. ADGM Court Procedure Rules, 2016, Rule 29.
Originally published 08 November 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
