Introduction
The question of Dubai Courts vs DIFC Courts jurisdiction was definitively addressed by the Conflict of Jurisdiction Tribunal on 26 January 2026 in Application No. 06/2025, a landmark ruling concerning a complex insurance and reinsurance dispute between a UAE-licensed insurer and multiple reinsurers, including a DIFC-registered entity.
This ruling is particularly relevant for insurers, reinsurers, brokers, and multinational corporations operating within and outside the DIFC framework.
Background of the Dispute
The Applicant, a UAE-licensed insurance company, had issued an “All Risks” property insurance policy covering physical damage and business interruption losses for a major insured entity during the period 1 August 2023 to 31 July 2024.
During April 2024, the UAE experienced severe weather events, including heavy rainfall, storms, and flooding. These events caused substantial damage to the insured’s properties located in the Emirate of Dubai, outside the geographical boundaries of the DIFC.
The Applicant had reinsured the risk through multiple reinsurance agreements, including with entities operating in the UAE and abroad. One of the reinsurers—Reinsurance Company—was registered and operating within the DIFC.
A loss adjustment process followed. A steering committee was formed, and the primary loss adjuster was appointed. After extensive investigations and collaboration, a settlement report dated 1 July 2025 confirmed agreement to settle losses at AED 555 million.
Despite initial acceptance of the settlement report, certain reinsurers allegedly failed to pay their participation shares. Consequently, the Applicant initiated proceedings before the Dubai Courts (Case No. 531/2025 – Civil General). In response, the reinsurers filed proceedings before the DIFC Courts (CFI-077-2025), challenging liability under the reinsurance contracts.
This created parallel proceedings before two judicial systems within the Emirate of Dubai.
The Core Legal Issue
The central question before the Conflict of Jurisdiction Tribunal was:
Which court has jurisdiction—Dubai Courts or DIFC Courts—where one of the parties is a DIFC-registered entity, but the dispute concerns insurance and reinsurance contracts relating to risks located outside the DIFC?
The Applicant argued that the Dubai Courts had general jurisdiction over disputes arising from insurance and reinsurance contracts. The Respondents relied heavily on Article 14(a) of Law No. 2 of 2025 concerning the DIFC Courts.
Article 14(a): Exclusive Jurisdiction of DIFC Courts
Article 14(a) of Law No. 2 of 2025 provides that the DIFC Courts have exclusive jurisdiction over civil and commercial claims brought by or against DIFC Bodies or DIFC Establishments.
Key Principles Emphasized by the Tribunal
The Third Respondent was a registered establishment within the DIFC.
The law defines DIFC Establishments broadly, including any licensed or registered entity operating within the DIFC.
The wording of Article 14 is clear and decisive.
The mere status of a party as a DIFC Establishment is sufficient to confer jurisdiction.
It is not necessary that the dispute arise within the DIFC or that contractual performance occur there.
This interpretation is crucial. The Tribunal expressly confirmed that jurisdiction is triggered by the legal status of the party—not by the geographical location of the loss or contractual performance.
Tribunal’s Decision
The Tribunal ruled:
- The Dubai Courts must refrain from hearing Case No. 531/2025 due to lack of jurisdiction.
- The DIFC Courts have exclusive jurisdiction over Case No. CFI-077-2025.
- The security deposit was confiscated in favor of the DIFC Courts, and costs were imposed on the Applicant.
This decision confirms that jurisdiction under Law No. 2 of 2025 is original, direct, and prevails over the general jurisdiction of Dubai Courts whenever Article 14 conditions are met.
Legal Significance of the Ruling
This decision carries substantial implications for insurance and reinsurance litigation:
1. Status-Based Jurisdiction
The ruling affirms that jurisdiction is status driven. If one party qualifies as a DIFC Establishment, the DIFC Courts may acquire exclusive jurisdiction—even where:
- The insured risk is located outside the DIFC.
- The loss occurred outside the DIFC.
- The reinsurance contract was performed outside the DIFC.
2. Override of General Jurisdiction
The Tribunal clarified that DIFC jurisdiction under Article 14 is a special statutory jurisdiction that overrides the general jurisdiction of Dubai Courts where applicable.
3. Parallel Proceedings Risk
Parties engaging DIFC-licensed reinsurers must anticipate the possibility of DIFC Court jurisdiction, even where the underlying insured risk is entirely onshore.
4. Strategic Litigation Considerations
For insurers and reinsurers, this case underscores the importance of:
- Careful jurisdiction clauses in reinsurance contracts.
- Understanding the implications of dealing with DIFC-registered entities.
- Evaluating dispute resolution strategy at the underwriting stage.
Broader Impact on the UAE Legal Landscape
The ruling strengthens the DIFC Courts’ position as a primary forum for commercial disputes involving DIFC entities. It also signals judicial consistency in upholding the legislative intent behind Law No. 2 of 2025.
The legislature’s policy direction is clear: DIFC-registered entities benefit from—and are subject to—the jurisdictional regime of the DIFC Courts. This promotes legal certainty and reinforces the DIFC as an autonomous common-law jurisdiction within Dubai.
Conclusion
Application No. 06/2025 represents a pivotal clarification of jurisdictional boundaries between the Dubai Courts and DIFC Courts in the context of insurance and reinsurance disputes.
The Tribunal’s reasoning confirms that:
- Jurisdiction under Article 14(a) is exclusive.
- The presence of a DIFC Establishment is sufficient to trigger DIFC jurisdiction.
- Geographic location of the loss is legally irrelevant when statutory jurisdiction conditions are satisfied.
For practitioners, insurers, and reinsurers operating in the UAE, this decision reinforces the necessity of early jurisdictional analysis and precise contractual drafting. In a dual-court system such as Dubai’s, strategic awareness of forum implications is no longer optional—it is essential.
If you require further clarification or legal assistance concerning the matters discussed in this article, please do not hesitate to contact Khairallah Advocates & Legal Consultants LLC. Our lawyers would be happy to assist you.
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