INSITE - UAE - Nov 2024
- sukhwinder21
- Dec 2, 2024
- 2 min read
DIFC ANNOUNCES ENACTMENT OF AMENDMENTS TO DIFC LAW ON APPLICATION OF CIVIL AND COMMERCIAL LAWS IN THE DIFC AND DIFC REAL PROPERTY LEGISLATION
Summary: Dubai International Financial Centre (DIFC) has introduced updates to its Application of Civil and Commercial Laws in DIFC (Application Law), which governs the application of civil and commercial laws in the DIFC. These changes clarify the sources of DIFC Law and its interpretation. Additionally, amendments have been made to the DIFC Real Property Law and Regulations to enhance legal certainty in property-related matters.
In Detail: Since its establishment, DIFC has operated on the understanding that its laws are supported by common law principles. To ensure clarity and legal certainty, the DIFC Authority has proposed amendments explicitly identifying the sources and interpretation of DIFC law.
These changes aim to provide statutory clarity, reflecting DIFC's approach of adopting global best practices that extend beyond English statutory law, ensuring its legal framework remains comprehensive and internationally relevant. The amendments include the following:
To address the source of law in the DIFC, a new Article 8A has been added to the Application Law. This establishes that DIFC Law is primarily determined by DIFC statutes and interpreted through DIFC Court judgments. It also clarifies that DIFC law is supplemented by common law principles, including equity, with DIFC Courts referencing common law from England and Wales or other jurisdictions as needed. The final version avoids importing specific doctrines but allows courts to consider comparative case law in shaping common law for the DIFC on a case-by-case basis, without granting them legislative powers.
A related new Article 8B to the Application Law has been added which confirms that DIFC statutes may be interpreted using principles from similar laws in other common law jurisdictions. If a statute is based on an international model law, interpretation may also rely on international case law, commentary, or guidance. These amendments ensure that English Common Law and global common law developments remain integral to the DIFC legal system.
There have also been some updates to the Real Property Law and Regulations that aim to streamline the property registration process and align with current practices.
Below are the key updates:
Mortgage Registration Fee
A new fee of 0.25% of the mortgage value will be charged when a purchaser registers a mortgage on real property in DIFC. This aligns with the current onshore practices and covers the administrative costs of the registrar of real property.
Extension of Off-Plan Sale Registration Period
The registration period for off-plan sales has been extended from 30 days to 60 days. This change gives buyers more time to complete the registration and pay the freehold transfer fee, reflecting the time required from the launch of off-plan units to the final sales agreement.
These amendments to the law came into effect on 21 November 2024, aiming to enhance the regulatory framework within DIFC.
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