Modernizing Justice: The Role of Artificial Intelligence in Abu Dhabi’s Courts
Transforming the DIFC Courts: Insights into Law No. (2) of 2025 governing the Dubai International Financial Centre (DIFC) Courts
On March 10, 2025, Sheikh Mohammed bin Rashid Al Maktoum issued Law No. (2) of 2025 (the “New Law”), a landmark legislation governing the Dubai International Financial Centre (DIFC) Courts. The New Law replaces the previous DIFC Law No. (10) of 2004 and Dubai Law No. (12) of 2004 (as amended) (collectively referred to as “Old Law”), marking a significant evolution in the DIFC legal framework and transforming the way disputes are resolved within the DIFC.
Key updates at a glance –
1. Expanded scope and exclusivity of Jurisdiction
- Exclusive Jurisdiction: The DIFC Courts now have exclusive authority over civil, commercial, and labor disputes involving DIFC entities, reducing jurisdictional conflicts and providing legal certainty for businesses.
- Expanded Scope: The DIFC Courts’ jurisdiction has been broadened to include claims arising out of or related to trusts, wills of non-Muslims, and arbitration-related applications, offering a more comprehensive legal framework.
2. Establishing a Mediation Services Centre
- Alternative Dispute Resolution: The New Law establishes a new Mediation Centre providing an efficient and cost-effective way to resolve disputes amicably, reducing litigation costs and thereby preserving commercial relationships.
3. Judicial Efficiency and Transparency
- Public Hearings and Judgments: The New Law mandates public access to court proceedings and judgments, enhancing transparency and accountability.
- Provisional Measures: The DIFC Courts can now issue provisional or interim orders, such as asset freezes, to protect rights effectively.
Comparison with the Old Law
| Feature | Old Law (DIFC Law No. 10/2004 & Dubai Law No. 12/2004) | New Law (DIFC Law No. 2/2025) |
| Jurisdiction | Parties may agree in writing to have civil or commercial claims or actions heard before the DIFC Courts. | Expanded to include cases with employment disputes, trusts, wills of non-Muslims, and arbitration-related applications. |
| Enforcement of Judgments | Less robust mechanisms for enforcing judgments outside the DIFC. | Improved mechanisms for enforcing judgments both within the UAE and abroad. |
| Dispute Resolution | Traditional litigation was the primary method. | Introduction of a Mediation Centre for civil, commercial, and labor disputes, offering an alternative to litigation. |
| Alignment with UAE Laws | Less emphasis on alignment with UAE federal laws. | Strengthened alignment with UAE federal laws to ensure legal harmony across jurisdictions to aid in enforcing judgements. |
| Provisional Measures | Limited ability to issue interim orders. | Empowered to issue asset freezes, disclosure orders, and other interim measures to protect rights. |
| Transparency | Less emphasis on public access to court proceedings. | Mandates public hearings and announcements of judgments to enhance transparency. |
| Arbitration Recognition | Less streamlined process for recognizing foreign arbitration awards. | Simplified process for recognizing and enforcing foreign arbitration awards. |
| Enforcement Writ | No explicit provision for Enforcement Writs. Enforcement was based on court orders and arbitral awards. | Explicitly includes judgments, decisions, orders, arbitral awards, and settlement agreements, enhancing clarity and efficiency in enforcement procedures. |
What does this mean to you?
For parties interacting with the DIFC Courts, the New Law offers several benefits:
- Legal Certainty: Businesses have clearer guidelines on jurisdiction, reducing legal risks and enhancing contract enforcement.
- Enhanced Legal Protection: The ability to issue provisional measures provides better protection for individuals’ rights during legal proceedings.
- Efficient Dispute Resolution: The mediation centre and streamlined procedures reduce the time and cost associated with disputes.
- Enhanced Enforcement: The New Law strengthens the enforcement of judgments, including the ability to execute judgments against assets outside the DIFC.
- Increased Transparency: Public access to court proceedings ensures that justice is not only served but also seen to be served.
In conclusion, Law No. (2) of 2025 marks a significant step forward for the DIFC Courts, enhancing legal certainty, efficiency, and transparency. The benefits of streamlined dispute resolution and stronger enforcement mechanisms cannot be overstated and are likely to make the DIFC an even more attractive hub for international business and investment.
At Al Midfa & Associates, we offer comprehensive services tailored to meet your needs, ensuring that your rights are protected at every step of the way. Please feel free to contact us.
Dubai Free Zone Expansion Update: Enhanced Opportunities and Key Considerations
On the 17th of March 2025, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, in his capacity as Chairman of Dubai’s Executive Council, introduced a transformative resolution (No. 11 of 2025) permitting free zone businesses (excluding DIFC financial institutions), to operate in mainland Dubai. While this marks a pivotal shift in Dubai’s economic framework, stakeholders should note that the resolution has not been issued yet and key details remain pending, including the finalized list of permitted activities.
Below, we expand on the implications, challenges, and steps for businesses navigating this evolving landscape.
Key Provisions and Early-Stage Considerations
- Activity-Specific Permissions: The resolution currently only applies to specified economic activities. However, the Dubai Department of Economy and Tourism (DET) is yet to announce what activities will fall under the ambit of the resolution and will publish a list of specified economic activities within six months.
- Licensing: Free zone entities can apply for a renewable one-year mainland license or activity-specific permits through the DET.
- Compliance Window: Existing businesses operating outside free zones must align with the resolution within one year (extendable further for similar periods subject to approval from the Director General of the DET).
Benefits for Businesses
- Direct Access: Eliminates the need for local sponsors or intermediaries to serve mainland clients, much like certain dual-licensing free zones (e.g. DMCC).
- Hybrid Model: Combine free zone tax benefits with mainland market reach (e.g., retail, direct B2C services).
- Infrastructure Leverage: Utilize existing free zone offices while expanding mainland operations, reducing overhead.
Challenges and Regulatory Uncertainties
Despite the welcome change, the resolution is still in its nascent stages and requires further details to be issued as highlighted below –
1. Pending Activity List
- Early-Stage Limitation: Businesses will need to closely monitor the changes in this space given that the DET has not yet defined which activities will be permitted.
2. Compliance Burden
- Financial Segmentation: Despite having a free zone registered license, it will be mandatory that all financial records maintained by the business remain separate to indicate free zone and mainland financial records.
- Dual Regulations: The free zones and mainland have historically operated with separate laws and their application to entities within their respective zones. As such, with the new resolution coming into effect, further clarity will be needed to navigate overlapping free zone and mainland laws (e.g. VAT, employment norms).
What’s Next?
While the resolution is transformative for Dubai and is in alignment with the goals of the Dubai Economic Agenda, D33, undoubtedly consolidating its position among the world’s top economic cities, its full impact hinges on the DET’s forthcoming guidelines.
Al Midfa & Associates is tracking regulatory updates and will provide tailored strategies once the DET clarifies permitted activities.
At Al Midfa & Associates, we offer comprehensive services tailored to meet your needs, ensuring that your rights are protected at every step of the way. Please feel free to contact us.
Emiratisation Update: Key Changes for 2025
As part of the UAE’s ongoing commitment to integrating Emirati nationals into the private sector, significant updates to the Emiratisation policy (as amended) went into effect on January 1, 2025. These changes build on the framework established in 2024 and reflect the government’s dedication to fostering a more inclusive and sustainable workforce. Below are the key updates for 2025 and how they differ from the requirements in 2024.
At a Glance
| Aspect | 2024 Requirements | 2025 Requirements |
| Scope for Smaller Companies (20-49 employees) | Hire at least one Emirati | Hire at least two Emiratis |
| Penalty Per Unmet Quota | AED 96,000 (AED 8,000 p.m. for each Emirati position not filled) | AED 108,000 (AED 9,000 p.m. for each Emirati position not filled) |
| Annual Target for Large Firms | Maintain a 2% annual increase | Continue with a cumulative target of up to 10% by 2026 |
Key Updates for 2025
Expanded Scope for Smaller Companies:
- In 2024, private sector companies with 20 to 49 employees were required to hire at least one Emirati national.
- For 2025, this requirement increases to two Emirati nationals, emphasizing the UAE’s focus on creating opportunities in small and medium-sized enterprises (SMEs).
Higher Penalties for Non-Compliance:
- The financial penalty for failing to meet Emiratisation quotas will rise from AED 96,000 per unmet quota in 2024 to AED 108,000 in 2025.
- The administrative fines for circumventing the Emiratisation requirements shall be AED 20,000 up to a maximum of AED 100,000.
- Penalties will be calculated annually and collected at the start of the following year (e.g., non-compliance in 2025 will result in penalties due in January 2026).
Ongoing Annual Targets for Larger Companies:
- Companies with 50 or more employees must continue achieving a 2% annual increase in Emiratisation of skilled roles, aiming for a cumulative target of 10% by 2026.
Impact and Benefits
The updated Emiratisation policies are expected to create a multitude of jobs annually for UAE nationals across the specified sectors listed in Emiratisation Policy. This initiative provides substantial employment opportunities and encourages local talent development, particularly in small and medium-sized enterprises (SMEs) and start-ups.
These developments underscore the UAE’s commitment to nurturing local talent and fostering a more inclusive labour market. Companies operating in the UAE must stay informed about these changes to ensure compliance and contribute positively to national development goals.
Businesses that align with these requirements contribute positively to national development goals and can benefit from government incentives such as wage subsidies, tax benefits, and training support.
At Al Midfa & Associates, we are committed to helping our clients navigate these regulatory changes seamlessly. If you have any questions or require assistance with compliance strategies, please do not hesitate to reach out to us here.
Why is a Family Constitution/Charter Important for Family Businesses?
Family-owned businesses form a significant part of the UAE’s economic fabric, but they face unique challenges in governance, succession, and conflict resolution. The UAE’s Family Business Law (Federal Decree Law No. 37 of 2022) emphasizes the importance of a family constitution—a non-legally binding document reflecting family values and providing guidelines for business operations. A well-drafted family constitution can foster internal cohesion, establish clear roles and responsibilities, avoid conflicts, and pave the way for future generations. It also supports professionalization, enhances economic success, and provides frameworks for dispute resolution
The UAE’s Commitment to Mediation and Conciliation: A Modern Approach to Dispute Resolution
The United Arab Emirates has placed significant emphasis on alternative dispute resolution (ADR) mechanisms, demonstrating a strong commitment to developing and enhancing these methods. This initiative aims to encourage disputing parties to resolve their conflicts amicably, given the advantages of ADR in ensuring the swift resolution of disputes, reducing costs, and minimising animosity between parties. This commitment is evident in the enactment of Federal Law No. 40 of 2023 on Mediation and Conciliation in Civil and Commercial Disputes, which reflects the UAE’s objectives in promoting mediation and conciliation as a means of amicable dispute resolution without the need for judicial intervention.
Under this law, two key mechanisms for amicable dispute resolution have been introduced:
- Mediation – where parties may opt for mediation at their discretion.
- Conciliation – applicable to certain disputes explicitly outlined in Article 27 of the law.
To incentivize parties to resort to these ADR methods, the law has introduced provisions such as the suspension of legal and judicial time limits, as well as the suspension or non-registration of pending court cases, thereby facilitating the success of amicable settlements. Furthermore, the law permits the appointment of private mediators and grants legal enforceability to mediation and conciliation agreements, treating them as executory instruments. This ensures that an agreement reached through mediation or conciliation can be enforced without the need to file a lawsuit if one party fails to comply.
Additionally, parties may recover court fees in full if a complete settlement is reached or a partial refund in the case of a partial settlement. Several other incentives have also been incorporated into the law to encourage parties to opt for mediation and conciliation as a preferred means of dispute resolution.
Mediation and Conciliation at Al Midfa & Associates
At Al Midfa & Associates, amicable dispute resolution remains at the core of our practice. It is one of the primary approaches we adopt to achieve our clients’ objectives—always with their consent, participation, and supervision. Our firm proactively engages with the opposing party or their legal representative to establish channels for amicable communication, facilitating the exchange of viewpoints and bringing them closer to an amicable resolution before initiating litigation or during court proceedings.
It is our firm’s experience that a substantial number of disputes are successfully resolved amicably, whether before or during litigation or even after a judgment has been rendered, sometimes contrary to the judgment itself. In numerous cases, we have observed a genuine willingness from our clients and their opponents to pursue amicable settlements due to their significant benefits—including time and cost savings, reduced litigation expenses, and the preservation of cordial relationships between parties. Ultimately, such resolutions benefit not only the disputing parties but also the judicial system by reducing the number of cases before the courts—aligning with the overarching goal of any efficient legal system.
If you have a dispute and wish to explore alternative dispute resolutions, please contact us here.
DIFC Introduces Digital Assets Wills
Traditional wills often fail to address the technical and legal complexities of digital ownership, leaving heirs unable to access or claim these assets. With the increased popularity of crypto and digital assets within the last few years, the ability to transfer and treat digital assets as you would more traditional assets, such as property, funds or shares, has become a pressing concern for many individuals and investors. Therefore, In October 2024, the Dubai International Financial Centre (DIFC) introduced the innovative Digital Assets Will, providing a groundbreaking framework for distributing digital assets upon passing that resolves these challenges, addressing the critical gaps in estate planning.
The Problem of Digital Asset Inheritance
Digital assets pose unique risks in estate planning:
- Loss of Access: Without explicit instructions, beneficiaries may lack the technical means (e.g., private keys) to access digital wallets.
- Legal Ambiguity: Many jurisdictions lack clear laws recognising digital assets as transferable property.
- Security Risks: Centralized exchanges or custodial wallets may freeze accounts upon the owner’s death, leading to permanent asset loss.
The DIFC’s Legal Framework
The DIFC Digital Assets Will operates under Digital Assets Law No. 2 of 2024 and integrates three key components:
- Non-Custodial Wallet: Built on Hedera Distributed Ledger Technology (DLT), it allows testators to retain complete control of assets during their lifetime while freely allocating them to beneficiaries as specific gifts upon their passing.
- Tejouri Integration: Digital Assets Wills are linked with the DIFC’s Tejouri digital vault, which securely stores data in encrypted formats. Tejouri provides a unique platform that functions as an online safe for data, supported by a state-of-the-art onsite DIFC data centre and a secondary UAE-based backup data centre. This integration enhances security and accessibility for testators and beneficiaries.
- Online Registration: The entire process, from drafting to registration, is conducted online. Testators can electronically sign their wills via video conferencing in the presence of witnesses. Once registered, the will is securely stored in the DIFC Courts’ database.
Key provisions include:
- Support for BTC, ETH, USDC, USDT, MATIC. In the future, the DIFC wallet expects to support NFTs such as ERC 721, ERC 1155, Ordinals and HTS.
- Flexibility to update beneficiary allocations without revising the entire will.
How the Digital Assets Will Works
Case Study: John, an investor, uses the DIFC Digital Assets Will to:
- Register: He drafts his will online, listing his Ethereum holdings and NFTs as “specific gifts” to his children.
- Assign Assets: Using the non-custodial wallet, he links his crypto wallets and allocates 60% of his Bitcoin to his spouse and 40% to a charitable trust.
- Secure Storage: His will is encrypted and stored in Tejouri, accessible only to his designated executor.
Upon his passing:
- The DIFC Courts validate the will via video-conferencing with witnesses.
- Executors receive access credentials, ensuring seamless asset distribution without third-party interference.
Advantages and Implications
The DIFC Digital Assets Will solves critical problems by:
- Ensuring Control: Testators maintain ownership until death, preventing unauthorised access.
- Providing Legal Clarity: Digital assets are recognised as property under DIFC law, reducing disputes.
- Enhancing Security: Decentralized storage and biometric authentication mitigate hacking risks.
For jurisdictions like the UAE, where 23% of residents hold digital assets, this framework positions Dubai as a leader in fintech innovation.
Why This Matters
The DIFC’s solution exemplifies how legal systems can adapt to technological advancements. By addressing ownership, access, and enforcement, the Digital Assets Will offers a replicable model for other jurisdictions grappling with similar challenges.
The DIFC Digital Assets Will represents a significant advancement in estate planning for the digital age. The UAE is one of the premier destinations for those seeking an organised, safe and promising digital investing environment. By addressing the complexities of digital asset inheritance with innovative solutions like non-custodial wallets and global accessibility, the Introduction of the Digital Assets Will positions Dubai as a leading hub for digital asset management and legal innovation. For individuals, it provides peace of mind—ensuring their digital legacy is preserved as meticulously as their physical one. It also strengthens Dubai’s reputation as a forward-thinking jurisdiction in the evolving world of digital finance.
How We Can Help
If you have any questions or require assistance with drafting and registering a Will, either a Simple Will or a Digital Assets Will, please get in touch with us at here.
Navigating Personal Status Laws in the UAE
Personal status law and its application to the vast and growing expatriate population in the United Arab Emirates (UAE) is often a point of contention when residing in the UAE. The UAE stands as a beacon of multiculturalism, thanks to its diverse population that spans nearly every nation on the globe. A common question among expatriates is, “Can I apply the law of my home country to my personal status issues?” The answer is often affirmative.
In its efforts to accommodate this diversity, the UAE has taken proactive and thoughtful steps to ensure that foreign residents feel recognised and respected, particularly regarding personal status laws. These measures ensure that individuals are governed by laws that align with their culture, background, and personal understanding.
In light of this, significant steps have been taken by the UAE government to include amendments to the UAE Civil Transactions Law No. 5 of 1985 concerning the application of personal status laws, followed by the groundbreaking enactment of the Federal Personal Status Civil Law No. 41 of 2022, setting a precedent within the region. Prior to this, Abu Dhabi led the way with its own Personal Status Civil Law No. 14 of 2021, tailored for the Emirate’s population.
For the average expatriate, navigating legal complexities may seem daunting. However, the introduction of these laws simplified the process by granting non-Muslim residents the ability to determine which legal framework governs their personal status matters. In order to ascertain the application of one law over the other, a non-muslim expatriate must consider their place of residence –
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- If the individual resides in Abu Dhabi, the applicable law is the Personal Status Civil Law No. 14 of 2021.
- If the individual resides in the other six emirates (which includes Dubai), the Federal Personal Status Civil Law No. 41 of 2022 shall apply.
In addition to the laws mentioned above, Articles 12 and 13 of the UAE Civil Transactions Law No. 5 of 1985 allow the application of the law of the country where the marriage took place to govern matters such as marriage, its financial implications and divorce. In the event that applying the law of the country where the marriage took place becomes unfeasible during a dispute, the applicable law shall be based on the expatriate’s place of residence as above.
The legal framework introduced in the UAE provides expatriates with a clear understanding of the laws they are subject to, enabling them to familiarise themselves with their rights and obligations. By doing so, they can align their actions with the legal framework, fostering harmony between their personal choices and the laws of their country. These reforms highlight the UAE’s commitment to inclusivity and its pioneering role in accommodating multiculturalism through legal innovation.
Contact us to learn more about what services we can provide you. At Al Midfa & Associates, we offer comprehensive services tailored to meet your needs, ensuring that your rights are protected at every step of the way.
Secure Your Brand: Essential Trademark Protection Steps Before Launching Your Brand
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