DIFC Court of Appeal rules that a DIAC provisional award providing for interim relief measures is enforceable as an 'award'

On 22 March 2024, the highest court of the Dubai International Financial Centre ('DIFC') rejected an appeal, ruling that a provisional award issued by a foreign seated tribunal providing for interim measures could be enforced as an 'award' in the DIFC. Former English High Court Judge, Justice Sir Jeremy Cooke, handed down the anonymized judgment on behalf of the DIFC Court of Appeal.

The decision turned on the proper interpretation of the DIFC Arbitration Law which is based upon the UNCITRAL Model Law, but which does not include all of its provisions.

Background

In November 2022, a London-seated Tribunal issued a 'Provisional Award on Interim Relief' which took the form of an order granting a proprietary injunction, a freezing order and an order for ancillary disclosure. The claimant subsequently applied to the DIFC Court for an order recognising and enforcing the Provisional Award.

On 19 September 2023, in the DIFC Court of First Instance, His Excellence Justice Shamlan Al Sawalehi held that Article 24 of the Arbitration Law – which deals with the enforcement of interim measures exclusively for DIFC-seated arbitrations – did not, by its terms, exclude any other route for the enforcement of interim measures. It was simply a matter for the Court to consider whether the Provisional Award was indeed an 'arbitral award' for the purposes of Part 4 of the Arbitration Law which deals with the recognition and enforcement of awards (i.e., Articles 42-44). He held that there was nothing in the Arbitration Law which suggested that this was not the case.

The defendant appealed this ruling to the Court of Appeal. The defendant's central arguments were:

1. Pursuant to Article 24 of the DIFC Arbitration Law, interim measures ordered by an arbitral tribunal, whether by way of an award or order, could only be enforced by the DIFC Court if the seat of the arbitration was the DIFC (here it was London); and
2. Articles 42 and 43 of DIFC Arbitration Law provide for the enforcement of awards which are final on their merits (i.e., partial and final awards), regardless of the seat of the arbitration, but not for the enforcement of interim measures, even if made in the form of an interim/provisional award.

Court of Appeal's Decision

The Court of Appeal upheld the lower court's decision that the Provisional Award was indeed an award capable of enforcement under the Arbitration Law on the basis that:

1. There remains ongoing debate as to whether an award granting interim measures constitutes an award under the New York Convention. However, as the Tribunal considered this point when granting the Provisional Award, it must have had in mind the issue of enforcement (paragraph 21).
2. While the Arbitration Law omitted certain provisions from the 2006 amended UNCITRAL model law which explicitly deal with the recognition and enforcement of interim measures, the Arbitration Law has to be construed on its own terms (paragraphs 22-24).
3. In ordinary parlance and international commercial practice, an 'award' is so described whether it is interim, provisional, partial or final. With reference to the Tribunal, it was stated that the term 'award' was in this case used by 'well known arbitrators/ judicial figures' (paragraph 25).
4. There was no basis for importing the criteria for finality when interpreting the term 'arbitral award', not defined in the Arbitration Law. What mattered was the binding nature of the award (paragraph 26).
5. The Court of Appeal accepted that interim measures can only be ordered by the DIFC Court in support of DIFC-seated arbitrations pursuant to its supervisory jurisdiction under Article 24. However, the DIFC Court's supervisory jurisdiction over arbitration should be distinguished from its enforcement jurisdiction which allows it to enforce awards (including awards for interim measures) made in other states (paragraphs 8, 26, 28).
6. Once it is accepted that a provisional or interim measure is indeed an award, there is no reason for the DIFC Court not to enforce it as an award, unless one of the grounds for challenging an award in Part 4 is established (paragraph 29).

Comment

There is still no consensus amongst national courts as to the enforcement of awards providing for interim relief – even in some of the most developed jurisdictions, the position as to whether interim relief can be made by way of an award is often uncertain, with contrasting conclusions being reached.

The DIFC Court's decision is an important one for users of international arbitration in the region. It is encouraging to see the DIFC Court take this view on the interpretation on the term 'award', avoiding an unduly technical distinction and thereby respecting the order of a foreign-seated arbitral tribunal.

For more information, please contact Nick Oury, Partner, Tania Forichon, Associate, or your usual Herbert Smith Freehills contact.