This article considers what parties should be aware of when considering the Technology and Construction Division as a potential venue for hearing their disputes.
In October the Dubai International Financial Centre (DIFC) Courts announced the opening of a new Technology and Construction Division (TCD) - broadly this has been hailed in the market as an inevitable and logical progression of the DIFC Courts, and an important addition to the UAE’s dispute resolution infrastructure.
In this article we consider whether this rhetoric stands scrutiny, and what parties should be aware of when considering the TCD as a potential venue for hearing their disputes.
What has happened and why is it important?
The new TCD Rules were launched following public consultation, on which Simmons & Simmons had input. The scope of the Rules will be broadly familiar to those with an understanding of the London Technology and Construction Court (TCC), as they are based in part on the TCC Guidelines. The TCD Rules are a much leaner and more simplified version of the TCC Guidelines, with the intention, presumably, to ensure ease of access for all practitioners in the region, and allow scope for a more collaborative and bespoke approach to case management by the parties, and at the judge’s discretion.
In essence the TCD, like the TCC London, is designed as a specialist court to hear complex engineering and technical related cases. Its aim is to provide a speedier and more efficient service to parties, with disputes being heard by judges with specialist experience.
Parties have the ability to "opt in" to the jurisdiction of the DIFC Courts. It is therefore open for parties to agree as between themselves whether to use the TCD to hear their dispute. As such, it is all the more important to look at the key identifying factors of the TCD to assist with that decision making process.
So, why is the DIFC Court attractive to parties?
The DIFC provides parties with a degree of certainty, following familiar rules, law and language. It is a common law jurisdiction similar to that found in England and Wales, Hong Kong, Singapore and others.
The DIFC’s Court system is set within this framework. It is largely modelled on the English Commercial Court, and proceedings and judgments are conducted in English.
Broadly speaking, the DIFC Court system is designed to achieve the following outcomes:
- provide certainty to parties in the application of law, as case law and precedents are given weight in proceedings
- give assurance in the outcome of disputes due to the enforceability of resulting judgments, with the principle that DIFC Court judgments can be widely enforced across the GCC and globally through a series of agreements / memoranda of understanding, and
- enable efficiency in proceedings as appeals to judgments (there is no appellate court beyond the Court of Appeal) and enforcement delays are minimized.
So, what does the TCD specifically offer parties in addition to this?
Court process meets arbitration know-how?
DIFC Courts Chief Justice Michael Hwang has been quoted in the local press as saying:
“The TCD has been designed around the particular characteristics of highly complex technology and construction disputes, which can be resolved much more speedily and efficiently with the oversight of specialist judicial expertise.”
The TCD by design seeks therefore to offer the certainty and efficiency of the existing DIFC Court regime, with the expertise and understanding found in arbitration (being the forum of choice in the construction and technology sectors in this region).
Specialist technical experienced Judiciary
The TCD is headed by Justice Sir Richard Field, who has been involved in the DIFC Courts since 2015, and who previously sat as Judge in Charge of the Commercial Court in London. Whilst Justice Sir Richard Field brings with him over 20 years of experience handling complex disputes, it is unclear at present who else will be appointed as specialist judge to the TCD.
Key to the TCD’s success will be the appointment of specialist judges with the right technical experience. This is needed to give parties the assurance that the judiciary has an innate understanding of the issues in the dispute, can manage such a case efficiently, and importantly give the parties confidence that the resulting decision will be the correct one.
Unless and until the TCD issues a strong judicial appointment list, there is little real incentive for parties to refer cases to this Division - although it must be said that the DIFC Court has a strong track record in attracting good names to its judiciary.
Sector know-how and efficiency of process
The TCD will only hear claims involving “issues or questions which are technically complex”. The TCD Rules do not prescribe what exactly this means, and there is no reference to a required minimal dispute value. It is notable that unlike the TCC Guidelines, there is no specific reference to “factually complex” claims.
That said however, the TCD Rules do provide a non-exhaustive list of examples of permitted claims, including:
- building, construction and engineering disputes
- claims by architects, engineers and other consultants, and
- disputes relating to computers, software and network systems.
Therefore, it may be argued that any claim in the construction, engineering and technology sectors which demonstrate an element of technical complexity (whether on the facts - for instance, if the project is technically complex - or at law) should be permitted.
Pulling these types of specialist claims away from the broad scope of cases in the main DIFC Court’s list, will mean that (i) these claims are considered by those with the relevant sector experience, which will (ii) in turn help to build greater certainty through development of a bank of relevant case law and precedent, and (iii) will also ensure that such cases are dealt with timely and efficiently - this may be particularly important for contractors/engineers experiencing cash flow issues.
In terms of procedure, the TCD Rules provide for early Case Management Conferencing, and certainty of process, which will enable parties to better understand the likely time and costs involved. The emphasis in the Rules is for early resolution of the dispute. It is notable however that the Rules stop short of introducing cost budgeting discussions to the case management process, and it remains to be seen whether the court and judges will make efforts to seek to manage costs, with a view to proportionality and equality of arms.
Furthermore, unlike arbitration, where timetabling of Tribunal members and parties can be difficult, the court system and a sole appointed judge on a case, should mean that the process can move quickly, and be relatively flexible to adjustments in the timetable, particularly as the TCD seeks to build up its case list.
It is clearly still far too soon to tell whether the TCD will be a success and our view is at least in the short term parties to construction / technology contracts will continue to favour arbitration. However, the new TCD system has laid out a solid framework for a viable alternative forum, the success of which will undoubtedly be measured by its ability to attract a strong technical specialist and well experienced judiciary.
As we march ever closer to the World Expo 2020 in Dubai (and the scale and volume of projects associated with that event), it may be that the launch of the new TCD Court now is well timed, such that it has sufficient scope to mature by the time those disputes crystallise.