ADGM (Abu Dhabi Global Market).
Pursuant to article 1(1) the application of English Law Regulations 2015 (the “ADGM Regulations”) provides that “the common law of England (including the principles and rules of equity), shall apply and have legal force in, and form part of the law of, the Abu Dhabi Global Market”. However, the common law will be part of ADGM law (a) only in so far as that common law is applicable to ADGM’s “circumstances”, (b) subject to “modifications as those circumstances require”, (c) subject to amendments that ADGM opts to make and (d) subject to there being no inconsistency between that common law and other applicable Abu Dhabi or ADGM laws. In addition, English laws that are both enacted after the ADGM Regulations were passed and modify common law are excluded unless ADGM itself expressly implements such modifications. Where English enactments abolish or modify common law principles featuring in any of the 48 specific English statutes deemed to apply in ADGM (the “Applicable Statutes”), those abolitions or modifications are not part of ADGM law without an express ADGM enactment. So, how does it work the application of Common Law in ADGM? First: when it comes to statutory English law that forms part of ADGM law (namely, the Applicable Statutes), ADGM has already selected and modified those it wishes to apply automatically, and these are scheduled to the Regulations. These Applicable Statutes sit alongside, and have equal force to, ADGM’s own body of enacted laws. Second, the incorporation of common law principles is automatic and does not require legislative activity on the part of ADGM for effectiveness. However, article 1(a) of the ADGM Regulations (considering applicability to ADGM’s “circumstances”) does arguably invite some discretion, at least theoretically, as to whether a particular common law principle should apply in ADGM at all. Third, common law principles apply in ADGM as the body of English case law stands from time-to-time subject to ADGM’s amendment powers. They are not recognised without an ADGM enactment. Therefore, changes to, or removal of, common law principles as far as the Applicable Statutes are concerned are not applicable in ADGM unless and until ADGM chooses otherwise. The ADGM relevant legislation includes a list equivalent to the “Applicable Statutes” comprised of maritime and commercial laws.
DIFC (Dubai International Financial Centre).
Unlike ADGM, there are no English law statutes that have been “incorporated by reference” into DIFC law, nor are there common law principles, including rules of equity, that DIFC law expressly enshrines. The application of English law in DIFC is a function of DIFC’s own body of enacted laws being largely based on, or derived from, statutory English law. DIFC has its own legislation. Article 8(1) of the Law on the Application of Civil and Commercial Laws in the DIFC (DIFC Law No. 3 of 2004) (the “DIFC Application Law”) clarifies that only DIFC law applies in DIFC. However, with respect to civil and commercial matters, any “failings” in applying such laws can be resolved by considering (i) the law of another jurisdiction recognised in DIFC Law as applicable, (ii) the laws of a jurisdiction “agreed between all the relevant persons concerned in the matter” to be suitable, (iii) the laws of a jurisdiction that the DIFC Courts or arbitrators find appropriate, and finally, (vi) the laws of England and Wales. DIFC’s approach provides wider latitude to its lawmakers and courts to depart from English law if they deem it necessary, with any statutory “failings” to be remedied by laws that the company, the DIFC regulator and the courts agree should apply. Only if that does not, or cannot, happen will English law apply. Here, the common law is a “backstop”, although with “persuasive power” to dictate the interpretation of ambiguous statutory provisions to finalize the outcome of a dispute.
The impact on Commercial Arbitration proceedings.
The application (directly or by reference) of the English Common Law has a direct impact on Commercial Arbitration cases where the arbitration clause includes the ADGM or DIFC laws to govern the contract.
Therefore, in this context, it seems appropriate the application by referene of the binding judicial precedents as ruled by the English Courts in similar cases.