Claim No: CA 002/2015
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum,
Ruler
IN THE
COURT
BEFORE THE
CHIEF JUSTICE
BETWEEN
FIDEL
Appellant/ Defendant
and
(1) FELECIA
(2) FARAZ
Respondents/Claimants
Hearing: 5 May 2015
Counsel: Steven Thompson QC for the Appellant
Tom Montagu-Smith instructed by Fichte & Co for the Respondents
Judgment: 22 November 2015
JUDGMENT
Summary of Judgment
| The Appellant (the Defendant in the original proceedings involving the recognition and enforcement of two arbitral awards (the “R&E Claim”)), appealed against the decision of H.E Justice Ali Al Madhani dated 12 October 2014 dismissing the Appellant’s application for permission to adduce expert evidence on the issue of
UAE
UAE
Court
DIFC Courts
DIFC
The Respondents argued as follows: on issue 1, the Respondents submitted that the DIFC Courts should not adopt the English approach of requiring all ‘foreign’ law (in this case, non-DIFC UAE law) to be proved by means of expert evidence. On issue 2, the Respondents submitted that the Appellant’s “practical concerns” with theTaaleemapproach were not insurmountable. On issue 3, the Respondents submitted that, even if the Judge Judge
Chief Justice Chief Justice
On issue 2, it was held that it was difficult to see any good sense in a blanket approach of requiring all DIFC Courts judges, regardless of their background in UAE law, to decide upon questions of non-DIFC UAE law by reference to expert evidence. More importantly, the composition of the DIFC Courts differs radically from that of the English courts by having judges who have expertise in the laws of various jurisdictions, including Singapore, Australia, Malaysia, New Zealand and the UAE. The justification for the ‘proof by expert evidence’ requirement, i.e. lack of expertise, plainly did not apply where the foreign law in question belonged to a jurisdiction in which the judge hearing the case was qualified. The International Approach (and not the English orTaaleemapproach) should be applied to questions of non-DIFC UAE law before the DIFC Courts, pursuant to the discretion conferred under Art 50(c) of the DIFC Courts Law. On issue 3, as the Court of Appeal dismissed the appeal on issue 2, there was no need to make a decision on issue 3. |
This summary is not part of the Judgment and should not be cited as such
ORDER
UPONhearing Counsel for the Appellant and Counsel for the Respondents on 5 May 2015
AND UPONreading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Appellant’s appeal is dismissed.
2. The Appellant will pay the Respondent’s costs of the appeal, such costs to be assessed if not agreed.
3. Pursuant to Rule 43.42(4) of the Rules of the DIFC Courts, a report of the judgment in the appeal shall be published, subject to paragraph 4 of this Order.
4. Pursuant to Rule 43.42(5) of the Rules of DIFC Courts, the report of the judgment shall be amended to conceal:
(a) The identity of the parties; and
(b) The identity of the law
5. For the avoidance of doubt, the following matters shall not be concealed in the judgment:
(a) The identity of the law firm instructed by the Respondent; and
(b) The identity of counsel for the parties.
Issued by:
Mark Beer
Registrar
Date of Issue: 23 November 2015
At: 10am
JUDGMENT
CHIEF JUSTICE MICHAEL HWANG:
Introduction
1. This is an appeal by the Appellant against the decision of H.E. Justice Ali Al Madhani (the “Judge”) dated 12 October 2014 dismissing the Appellant’s application of 2 October 2014 (ARB-001-2014/3) for permission to adduce expert evidence on the public policy of the United Arab Emirates (“UAE”) with regard to the Appellant’s application to challenge the jurisdiction of the Dubai International Financial Centre (“DIFC”) Courts to entertain a claim for recognition and enforcement of two arbitration awards dated 14 September 2012 and 12 April 2013 respectively.
The Facts
2. The Appellant is the unsuccessful party in arbitration (“Arbitration”) under the London Maritime Arbitrators Association (“LMAA”) Terms (2006) brought against it by the Respondents pursuant to a Request for Arbitration dated 29 July 2011. The Arbitration was commenced pursuant to an arbitration agreement in a charterparty in respect of a vessel known as “ABC”. The seat of the arbitration was London, United Kingdom, and the governing law of the charterparty was English law. Two awards were issued by the Tribunal
3. On 17 April 2014, the Respondents filed a claim (the “R&E Claim”) with the DIFC Courts (ARB-001-2014) for the recognition and enforcement of the Two Awards in accordance with Articles 42 and 44 of the DIFC Arbitration Law (DIFC Law No. 1 of 2008) (“DIFC Arbitration Law”), which was served on 29 April 2014. On 27 May 2014, the Appellant issued an application with the DIFC Courts to challenge the jurisdiction of the DIFC Courts to entertain the R&E Claim, in particular, on the ground that recognition and enforcement of the Two Awards would be contrary to the public policy of the UAE under Article 44(1)(b)(vii) of the DIFC Arbitration Law. According to the Appellant, the underlying issue was whether, on the facts of the case, it would be in accordance with UAE public policy to permit a claimant to use the DIFC as a conduit to enforcement in Dubai (outside the DIFC) when the defendant has no connection whatsoever to the DIFC, thereby circumventing the rules that would otherwise apply to recognition and enforcement of foreign arbitration awards in the UAE.
4. On 7 August 2014, the Appellant issued an application for: (i) a referral of the issue of the constitutionality of the DIFC laws upon which the Respondents relied on vis-à-vis UAE federal law for determination by the Union Supreme Court of the UAE under Article 151 of the UAE Constitution; and (ii) a stay of the R&E Claim pending the determination of the Union Supreme Court of the UAE (the “Constitutionality Application”). On 17 September 2014, H.E. Justice Ali Al Madhani heard and dismissed the Appellant’s Constitutionality Application (with reasons to follow), and issued certain directions.
5. On 2 October 2014, the Appellant made an application (ARB-001-2014/3) for permission of the Court to rely upon expert evidence of UAE law of public policy (the “Expert Evidence Application”), pursuant to Rule 31.13 of the Rules of the DIFC Courts 2014 (“RDC”). In particular, the Appellant requested the Court for permission to submit and rely on expert evidence on the following issues, namely:
(a) What constitutes public policy in the UAE;
(b) What is the scope and applicability of UAE public policy;
(c) What is the UAE public policy set out in UAE law and/or other relevant sources; and
(d) Whether the relief sought by the Respondents in these proceedings (if granted and if the Respondents were to seek to enforce any such order or judgment against the Appellant under the DIFC judicial authority law
The Appellant argued that the application should be allowed because an expert would be needed to consider the unique position of the DIFC Courts (being the courts of an English language, common law jurisdiction that is independent of the UAE and Dubai’s other legal systems) with regard to recognising and enforcing arbitral awards that are wholly unconnected to the DIFC.
6. On 12 October 2014, H.E. Justice Ali Al Madhani dismissed the Expert Evidence Application and directed that the Parties could provide copies of relevant legislation, commentary, case law and written submissions for consideration at trial (the “Expert Evidence Decision”). The reasons for the Judge’s decision on the Expert Evidence Application were released on 15 December 2014 (see below).
7. On 23 October 2014, the Appellant served evidence of UAE law, including the fourth witness statement of Mr Robert Irvine Marr (a solicitor acting for the Appellant) (“Mr Marr’s Fourth Statement”) and a statement of Mr James Whelan (a commentator on UAE law) (“Mr Whelan’s Statement”) together with associated commentary, legislation and case law. On 27 October 2014, the Respondents issued an application (ARB-001-2014/4) to strike out
8. On 17 November 2014, the Appellant issued an application to set aside
9. On 15 December 2014, the Judge released to the Parties his written reasons for his decision on the Expert Evidence Application of 12 October 2014 (the “Reasons for the Expert Evidence Decision”).
10. On 16 December 2014, the trial for the R&E Claim took place, with judgment being reserved after the hearing.
11. On 6 January 2015, the Appellant filed an Appeal Notice against the Judge’s Expert Evidence Decision dated 12 October 2014 (the “Appeal”). On 13 January 2015, the Appellant filed a Skeleton Argument (“Appellant’s Skeleton Argument”).
12. On 29 January 2015, Chief Justice Michael Hwang SC issued an order granting leave to appeal pursuant to Rule 44.8(2) of the RDC, on the basis that the subject matter of the appeal was one of public importance.
13. On 28 April 2015, the Respondents filed their Skeleton Argument (“Respondents’ Skeleton Argument”).
14. On 5 May 2015, the hearing for the Appeal was held. At the conclusion of the oral hearing, the Court delivered an oral judgment dismissing the Appeal with costs to the Respondent to be assessed if not agreed. After the close of the hearing, the Court conferred and (through myself) delivered an oral judgment dismissing the Appeal, with costs to the Respondents to be assessed if not agreed. I now proceed to give the reasons for my decision, with which my brother judges are in agreement.
The Statutory Provisions
15. The relevant provisions of the DIFC Arbitration Law are as follows (with emphasis added):
“42. Recognition and enforcement of awards
(1) An arbitral award
(2) The party relying on an award or applying for its enforcement shall supply the original award or a duly certified copy thereof and the original Arbitration Agreement referred to in Article 12 or a duly certified copy thereof. If the award or the agreement is not made in English, the DIFC Courts may request the party to supply a duly certified translation thereof.
(3) For the purposes of the recognition or enforcement of any award within the DIFC, an original award or an original Arbitration Agreement shall be duly certified if it is a copy that is certified in the manner required by the laws of the jurisdiction in the place of arbitration or elsewhere. A translation shall be duly certified if it has been certified as correct by an official or sworn translator in the place of arbitration or elsewhere.
(4) Awards issued by the DIFC Courts may be enforced within the DIFC in the manner prescribed in this Law and any rules of Court made for this purpose.Awards recognised by the DIFC Courts may be enforced outside the DIFC in accordance with the Judicial Authority Law and recognition under this Law includes ratification for the purposes of Article 7 of the Judicial Authority Law.
…
44. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the State or jurisdiction in which it was made, may be refused by the DIFC Courts only:
(a) at the request of the party against whom it is invoked, if that party furnishes to the DIFC Courts proof that:
(i) a party to the Arbitration Agreement as defined at Article 12 of this Law was under some incapacity; or the said Arbitration Agreement is not valid under the law to which the parties have subjected it or, in the absence of any indication thereon, under the law of the State or jurisdiction where the award was made;
(ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to Arbitration, or it contains decisions on matters beyond the scope of the submission to Arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to Arbitration may be recognised and enforced;
(iv) the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, in the absence of such agreement, was not in accordance with the law of the State or jurisdiction where the arbitration took place; or
(v) the award has not yet become binding on the parties or has been set aside or suspended by a Court of the State or jurisdiction in which, or under the law of which, that award was made; or
(b) if the DIFC Courts finds that:
(vi) the subject-matter of the dispute would not have been capable of settlement by Arbitration under the laws of the DIFC; or
(vii) the enforcement of the award would be contrary to the public policy of the UAE.
(2) If an application for the setting aside or suspension of an award has been made to a Court referred to in paragraph (1)(a)(v) of this Article, the DIFC Courts may, if it considers it proper, adjourn its decision and may also, on the application of the party seeking recognition or enforcement of the award, order the other party to provide appropriate security.
(3) Any party seeking recourse against an arbitral award made in the Seat of the DIFC shall not be permitted to make an application under paragraph (1)(a) of this Article if it has made or could have made an application under Article 41 of this Law.”
16. The relevant provisions of the DIFC JAL are as follows:
“Article 2 – Definitions
The following words and expressions, wherever mentioned in this law, shall have the meaning indicated opposite each of them unless the context implies otherwise:
…
Ruler: His Highness the Ruler of Dubai
…
DIFC Laws: Any laws issued by the Ruler in relation to DIFC
DIFC Regulations: Any rules, regulations, bylaws or orders relating to DIFC issued by the President or by DIFC Bodies
…
Article 6 – Governing Law
The Courts shall apply the Centre’s Laws and Regulations, except where parties to the dispute have explicitly agreed that another law shall govern such dispute, provided that such law does not conflict with the public policy and public morals.”
17. The relevant provisions of the DIFC Courts Law (DIFC Law No. 10 of 2004) (“DIFC Courts Law”) are as follows:
“9. Appointment of Judges
…
(3) A person is qualified to be appointed as a Judge if:
(a) the person is or has been the holder of high judicial office in any jurisdiction recognised by the Government of the United Arab Emirates; and
(b) the person has significant experience as a qualified lawyer or judge in the common law system.
…
30. Governing Law
(1) In exercising its powers and functions, the DIFC Courts shall apply:
(a) the Judicial Authority Law;
(b) DIFC Law or any legislation made under it;
(c) the Rules of Court; or
(d) such law as is agreed by the parties.
(2) The DIFC Courts may, in determining a matter or proceeding, consider decisions made in other jurisdictions for the purpose of making its decision
…
- Application of Evidence
Where proceedings are instituted in the DIFC Courts, the rules of evidence to be applied in the proceeding will be the rules that:
(a) are prescribed in DIFC Law; or
(b) are applied in the courts of England and Wales; or
(c) the DIFC Courts considers appropriate to be applied in the circumstances.”
18. The relevant provisions of the DIFC Law on the Application of Civil and Commercial Laws in the DIFC (DIFC Law No. 3 of 2004) (“DIFC LACCL”) are as follows:
“8. Application
(1) Since by virtue of Article 3 of Federal Law No. 8 of 2004, DIFC Law is able to apply in the DIFC notwithstanding any Federal Law on civil or commercial matters, the rights and liabilities between persons in any civil or commercial matter are to be determined according to the laws for the time being in force in the Jurisdiction
(2) The relevant jurisdiction is to be the one first ascertained under the following paragraphs:
(a) so far as there is a regulatory content, the DIFC Law or any other law in force in the DIFC; failing which,
(b) the law of any Jurisdiction other than that of the DIFC expressly chosen by any DIFC Law; failing which,
(c) the laws of a Jurisdiction as agreed between all the relevant persons concerned in the matter, failing which,
(d) the laws of any Jurisdiction which appears to the Court or Arbitrator to be the one most closely related to the facts of and the persons concerned in the matter; failing which,
(e) the laws of England and Wales.”
The Decision Below
19. In the Reasons for the Expert Evidence Decision, the Judge held that the appropriate course was to refuse permission to adduce the expert evidence because he was a judge trained and qualified in UAE civil law (in addition to English common law), and that it was open to the parties to serve materials (including any legislation, case law, textbook writings or other academic commentary) that they would have put before an expert in relation to UAE public policy for the Judge’s review.
20. The Judge relied onTaaleem PJSC v National Bonds Corporation PJSC and anor(12 May 2013) CFI 014/2010 (“Taaleem”), in which Deputy Chief Justice Sir Anthony Colman (as he then was) (“DCJ Colman”) had allowed an application to adduce expert evidence on non-DIFC Dubai law, stating that, in a case where the Court is manned by a judge whose training is in the common law (and not in non-DIFC UAE Law) and there are numerous complex matters of non-DIFC Dubai law, “the ordinary approach will be for expert evidence to be given, unless the parties are able to agree that the Dubai non-DIFC law can be put before the judge in some agreed form or in some other way” (at [9]), but also adding inobiterthat “[w]here the case is manned by a judge who has been trained in Dubai non-DIFC law, it seems to me that in the ordinary way it should not be necessary for such a judge to require that expert evidence should be called, either evidence given by witnesses or evidence given in a written form, for him to resolve the issues which may arise. There may be cases where the issues of non-DIFC law are particularly complex or where views of writers upon the subject, or decisions of the courts in Dubai, are in conflict. In those circumstances, it may be of assistance to the judge in question to hear the views of writers and academic opinion as to what the law may be” (at [8]) (emphasis added).
21. InTaaleem, DCJ Colman explained that this was because, while matters to be tried in the Court of First Instance could be heard either by a judge whose training was in the Common Law or by a judge whose training was in non-DIFC Dubai law as well as DIFC law, the latter judge, being trained in non-DIFC Dubai law, would be in a completely different position from the former when it came to deciding issues of law that were essentially issues of non-DIFC Dubai law, as he would be drawing upon his own legal and judicial training, supported by reference to the relevant texts and writings (and not upon opinions by witnesses as to the content of the non-DIFC Dubai law). This approach will be referred to in this judgment as the “Taleemapproach”.
The Issues before the Court
22. The central premise of the Appellant’s argument in this appeal is that the learned Judge erred in following theTaaleemapproach and in refusing to admit formal expert evidence on UAE public policy because non-DIFC UAE law is ‘foreign’ law in the DIFC Courts, which must be proved as a fact by relevant expert evidence.
23. There are essentially three issues in this appeal.
(1) Whether the DIFC Courts are bound to construe non-DIFC UAE law as ‘foreign’ law and require it to be proved as a fact via expert evidence in accordance with the position in English law (“Issue 1”);
(2) If Issue 1 is found in the negative, whether the English approach (as described in Issue 1), theTaaleemapproach, or some other approach should apply to questions of non-DIFC UAE law before the DIFC Courts (“Issue 2”);
(3) If the Court be minded to allow the Appeal, whether the Court should make an order for a rehearing of the R&E Claim or an order reserving any relevant issue of non-DIFC UAE law until after the hearing of the R&E Claim (“Issue 3”).
24. This Court is aware that the decision being appealed against is a case management decision. As a general rule, a case management decision should not be interfered with by an appellate court unless it is satisfied that the judge below had: (a) erred in principle; (b) taken into account irrelevant matters; (c) failed to take into account relevant matters; and/or (d) come to a decision so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge: see e.g.Royal & Sun Alliance Insurance PLC v T&N Limited[2002] EWCA Civ 1964 at [38].
The Grounds of Appeal
Issue 1: Whether the DIFC Courts are bound to construe non-DIFC UAE law as ‘foreign’ law and require it to be proved as a fact via expert evidence in accordance with the position in English law (the “English approach”)
Appellant’s Arguments
25. The Appellant argued at the appellate hearing that the DIFC Courts should be considered to be common law courts in which non-DIFC UAE law is deemed to be foreign law, so that non-DIFC UAE law must be proven as a fact by expert evidence in accordance with the position under English law, because: (i) the DIFC Courts were required under the relevant DIFC statutory provisions to apply English law by default; and (ii) DIFC judges were not required under Art 9(3) of the DIFC Courts Law to have any non-DIFC UAE background or training.
26. According to the Appellant, the DIFC Courts would be required to apply English law by default through the following logical sequence.
27. First, the DIFC Courts are required to apply Art 8(2) of the DIFC LACCL pursuant to two statutory provisions: (i) under Art 6 of the DIFC JAL, the DIFC Courts are to apply the DIFC’s Laws and Regulations, which would include the DIFC LACCL, in which Art 8(1) states that, “the rights and liabilities between persons in any civil or commercial matter are to be determined according to the laws for the time being in force in the Jurisdiction chosen in accordance with [Art 8(2) of the DIFC LACCL]”; and (ii) under Art 30(1)(b) of the DIFC Courts Law, the DIFC Courts are to apply “DIFC Law or any legislation made under it”, which would also include Art 8(2) of the DIFC LACCL.
28. Second, Art 8(2) of the DIFC LACCL provides for a cascade of laws in which the laws of England and Wales are provided as the default position under Art 8(2)(e) if Art 8(2)(a)-(d) do not apply. Since there is no specific DIFC law that deals with the question of the treatment of non-DIFC UAE law in the DIFC Courts, and Arts 8(2)(b)-(d) do not apply, English law (and the English approach of treating any foreign law, including non-DIFC UAE law, as fact) applies by default pursuant to Art 8(2)(e) of the LACCL.
Respondents’ Arguments
29. The Respondents argued at the appellate hearing that the DIFC Courts are not confined to the English approach when dealing with the issue of evidence because Art 50 of the DIFC Courts Law provides the DIFC Courts with the discretion to apply the rules of evidence they consider appropriate in the circumstances.
Issue 2: if Issue 1 is found in the negative, whether theTaaleemapproach or some other approach should apply to questions of non-DIFC UAE law before the DIFC Courts
Appellant’s Arguments
30. The Appellant has argued that the English approach should be applied to all questions of non-DIFC UAE law before the DIFC Courts, so that non-DIFC UAE law is treated as a fact that must be proven by expert evidence, and thatTaaleemshould not be followed. The Appellant had initially argued that the principle set out inTaaleemwas correct, but that the Judge had applied it incorrectly (as stated in the Second Witness Statement of Mr Keith Lyall Hutchison at [23]-[24]). The Appellant subsequently took the position in its Skeleton Argument and before this Court of Appeal thatTaaleemwas wrongly decided and that the DIFC Courts should always decide issues of non-DIFC law by reference to expert evidence.
31. First, the Appellant argues that there are several practical concerns withTaaleem’s approach of resolving the issue purely as one of practicality.
(a) As the majority of Counsel appearing in the DIFC Courts are not trained in UAE law, such Counsel may, absent the benefit of an expert in UAE law, misunderstand or misinterpret the law without the Court appreciating the possibility that an unintended side effect ofTaaleemmay be that the parties will be forced to instruct two Counsel or even two firms of lawyers (the “Inadequate Counsel Argument”);
(b) It requires each case to be docketed to one judge (or at least one of the two types of judges) from the beginning of the case (the “One Docketed Judge Argument”);
(c) A party will not know whether a decision made on the UAE law is one of law or fact, which might be critical for an appeal (the “Law/Fact Uncertainty Argument”); and
(d) The DIFC Courts of Appeal may well comprise only a minority of judges (or even none at all) familiar with the UAE law interpreted by the Court of First Instance judge, which may lead to the conduct of such appeals being at best confusing and at worst unjust (the “Conduct of Appeals Argument”).
(e) By refusing to receive the commentary of Mr Whelan in an expert’s report but at the same time being willing to accept a commentary by him published in a book, the Judge drew an artificial distinction, which arose only because theTaaleemcase avoided deciding the status of non-DIFC UAE law in the DIFC Courts.
32. Second, the Appellant submits that, as a matter of principle, the DIFC Courts ought to accept (in some or all cases) expert evidence on the UAE law of public policy, for the following reasons.
(a) The area of public policy is a “notoriously difficult one”, being liable to change over time and with social and judicial attitudes likely dissimilar to the public policy of common law countries.
(b) The public policy of the UAE at any time is not something that will be automatically familiar to all of the judges of the DIFC (even those who had previously been judges in the non-DIFC Dubai Courts
(c) It is unlikely that UAE public policy will be similar to the public policy of common law countries.
33. Third, the Appellant submits that, for the following reasons, the DIFC Courts should not adopt the approach of treating all UAE law as ‘DIFC law’ and allowing the expert evidence in question to be submitted as part of Counsel’s legal submissions.
(a) Unlike expert evidence, legal submissions cannot be tested by cross-examination; and
(b) Counsel untrained in UAE law would be forced to make legal submissions and address questions on them that are outside their expertise.
Respondents’ Arguments
34. In their Skeleton Argument, the Respondents submit that, rather than having a rigid approach of either requiring UAE law to be (or not to be) proved by expert evidence in all cases, the DIFC Courts should instead adopt a flexible approach, taking into account all the circumstances of the case. The Respondents also submitted that the alleged practical concerns withTaaleem’s approach are not insurmountable, and that the Judge’s conclusion was in any event correct.
35. First, the Respondents submit that the DIFC Courts shouldnotadopt the English approach of requiring all ‘foreign’ law (in this case, non-DIFC UAE law) to be proved by means of expert evidence, for the following reasons.
(a) The English approach is inconsistent with the way in which the DIFC Courts have approached issues of non-DIFC UAE law to date; see: (i) the cases ofLutfi v
DIFCA
(b) The wholesale adoption of the English approach would produce an inflexible regime, with the following effects: (i) the Court could not consider passages in foreign law materials that had not been referred to by the experts:Bumper Development Corporation v Commissioner of Police of the Metropolis and others[1991] 1 WLR 1362 (“Bumper Development”) at 1369B; (ii) uncontradicted expert evidence could not be rejected by the Court unless it was patently absurd:Bumper Developmentat 1369B; and (iii) the Court could not ignore evidence of foreign law on the basis that a conclusion unsupported by the evidence appeared more coherent:Harley v Smith[2010] EWCA Civ 78 (“Harley”) at [48]-[50].
(c) Even the English Courts accept the existing English approach with a degree of reluctance. InMorgan Grenfell & Co Ltd v SACE Instituto Per I Servizi Assicurativi Commercio[2001] EWCA Civ 1932 (“Morgan Grenfell”), Clarke LJ (as he then was) stated (at [53]) that he hoped that the English Courts could soon be permitted to take judicial notice of decisions of foreign courts (including those in the European Union), and perhaps academic writings, in deciding the content of the relevant foreign law.
(d) Even under English law, the approach of a judge to foreign law is not uniform, as where a judge has a degree of familiarity with the concepts of a particular foreign law (e.g. where the foreign law is written in English and/or its concepts are not so different from English law), he would be expected to apply that knowledge and experience to the issue:MCC Proceeds Inc v Bishopsgate Investment Trust plc[1999] CLC 417 (“MCC Proceeds”) at [12]-[13], per Evans LJ (as he then was). In the DIFC Courts, where the majority of the judges have very significant experience in non-DIFC UAE law (three out of the ten current judges are fully familiar with UAE law, and three more sit on the Dubai World Tribunal, where disputes are frequently decided in accordance with non-DIFC UAE law), it would be “surprising” if, for example, a member of the Dubai World Tribunal were, when sitting in the DIFC Courts, deemed to be not competent to apply non-DIFC UAE law without expert assistance.
(e) The value of the English approach has been doubted in the arbitration context, where the arbitral tribunal may comprise arbitrators from varying legal traditions, including those not of the governing law orlex arbitriin question. In such cases, all ‘law’ is treated as ‘law’, with Counsel making legal submissions on all disputed areas of the law in question: seeRedfern and Hunter on International Arbitration(London: Sweet & Maxwell, 2009) (“Redfern and Hunter”) at [6.169]-[6.172].
(f) The line between DIFC law and non-DIFC UAE law could be difficult to draw. Certain provisions of Federal and Dubai Law apply directly in the DIFC (e.g. the laws establishing the legal framework of the DIFC and its Courts and the laws establishing special tribunals, such as the Dubai World Tribunal, the Tamweel Tribunal and the Amlak Tribunal).
(g) If expert evidence of non-DIFC UAE law were required in every case because it is a ‘foreign’ or ‘non-DIFC’ law, then expert evidence woulda fortioribe required of all other foreign laws, including English law, which would be an “absurd” result. The Appellant attempted to avoid this conclusion by stating that DIFC law “incorporates common law”, but DIFC law isnot(solely) the law of England and Wales or of any other common law jurisdiction, and differs from orthodox common law in several respects (including on matters as fundamental as contractual interpretation).
(h) The Appellant’s assertion that DIFC law “incorporates” common law is a tacit admission that having experts give evidence on English, Singapore, Malaysian or Australian law, for example, would be absurd, which can only be because: (i) the DIFC Courts have judges with expertise in those systems of law; and (ii) the similarities between common law systems means that all judges have a firm and common foundation from which to approach the laws of other common law countries. In other words, the Appellant is in fact saying that the experience and qualifications of a DIFC judge in another system of law is a relevant factor in deciding whether expert evidence is required – which was the effect of theTaaleem
36. Second, the Respondents submit that the Appellant’s “practical concerns” with theTaaleemapproach (i.e. to have no need for non-DIFC UAE law proved by expert evidence where the presiding judge has expertise in such non-DIFC UAE law) are not insurmountable, for the following reasons.
(a) On the Inadequate Counsel Argument, even if experts were hired, there would still be a need in practice to hire two counsel or law firms in practice in any event. However, the appointment of experts is more cumbersome as it requires reports, meetings and oral evidence. This extra procedural layer is unnecessary if UAE lawyers were instructed to simply make submissions (written or oral).
(b) On the One Docketed Judge Argument, the practice of docketing each case to one judge does not appear to have caused any difficulty to date – by the time the issue came for decision (in bothTaaleemand in this case), the final hearing had been allocated to a single judge.
(c) On the Law/Fact Uncertainty Argument, even if the non-DIFC UAE law decision were deemed to be a fact, it is a “peculiar kind” of fact, which well places the DIFC Courts of Appeal to review the material that was before the judge, whether or not experts were engaged (citing Richard Fentiman,International Commercial Litigation(United Kingdom: Oxford University Press, 2012) (“Fentiman”) at paragraphs 20.135-20.136). In any case, the point on this appeal is not about the status of foreign law being fact or law, but rather on how the DIFC Courts may receive evidence of ‘foreign’ law. Even the Court of Appeal of England and Wales has expressed a desire that the law be changed so that judicial notice may be taken of foreign law (citingMorgan Grenfell(above)).
(d) On the Conduct of Appeals Argument, the Respondents contend that it is unconvincing as: (i) in practice, it is unlikely for the DIFC Courts of Appeal to include a minority or no judge familiar with non-DIFC UAE law, as the majority of DIFC judges have significant experience of non-DIFC UAE law; and (ii) in any event, there is little difference between this situation and the one that would be faced in England, where the appeal court would not have the benefit of assessing the experts.
37. Third, the Respondents submit that, even if the Judge’s approach were wrong in principle, his conclusion was correct.
(a) The disputed issue was one of DIFC law in any event, and DIFC judges should not, as a matter of principle, receive expert opinion on the meaning of DIFC law. The defence advanced was that recognition and enforcement of the Two Awards would be contrary to the public policy of the UAE within the meaning of Article 44(1)(b)(vii) of the DIFC Arbitration Law, which did not simply import into DIFC law the UAE law of public order.
(b) It is particularly incongruous to require expert evidence of non-DIFC UAE law in this case, considering that it is open to the DIFC Courts to consider the approach of courts in other States which are signatories to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1957) (“New York Convention”), without the need for expert evidence, to decide on issues pertaining to the various defences to enforcement of arbitration awards under the DIFC Arbitration Law (which are derived from the New York Convention).
(c) The issues involved are not so complex as to require expert assistance. The Appellant’s position at the hearing in December was effectively that: (i) the organisation of courts was a matter of public order, within the meaning of Article 3 of the UAE Civil Code; (ii) the provisions of the Federal Civil Procedure Law imposed certain mandatory rules and conferred certain rights on defendants; and (iii) those rules and rights would be infringed if the Two Awards were enforced in the DIFC and execution was subsequently sought in Dubai (outside of the DIFC). However, the Appellant did not identify any particular point that it would (but could not) make because it lacked expert evidence.
(d) The DIFC Courts have, in any event, already interpreted and applied the relevant provision. InBanyan Tree Corporate Pet Ltd v Meydan Group LLC(ARB-003-2013) (2 April 2015) at [30]-[31], H.E. Justice Omar Al Muhairi considered and rejected the public policy defence in circumstances similar to this case without requiring any expert evidence.
(e) There would be considerable practical consequences of requiring expert evidence in a case like this. Arbitration enforcement proceedings were intended to be quasi-administrative but, by raising the public policy defence involving the use of expert witnesses, a Defendant would be able to put the Claimant
(f) No injustice was done to the Appellant at the hearing for the R&E Claim because the Appellant had already at that hearing deployed all the material that was in Mr Whelan’s Statement (save for the Statement itself), including all exhibits and case reports, and had a full opportunity to make legal submissions based on Mr Whelan’s Statement.
Issue 3: should the Court be minded to allow the Appeal, and whether the Court should make an order for a rehearing of the R&E Claim or an order reserving any relevant issue of non-DIFC UAE law until after the hearing of the R&E Claim
Appellant’s Arguments
38. The Appellant submitted at the appellate hearing that, should the Court be minded to allow the Appeal, the Court should direct the Judge to convene a rehearing of the R&E Claim rather than issuing an order reserving any relevant issue of non-DIFC UAE law until after the hearing of the R&E Claim, on the grounds that: (i) the Judge would have had conducted the trial without all the evidence that he ought to have had before him; and (ii) should the Judge be of the opinion that the rehearing dealing with any relevant issue of non-DIFC UAE law turn out to have added nothing to the case, that could be dealt with by way of appropriate cost orders.
Respondents’ Arguments
39. The Respondents submit that, even if the Court were to allow this appeal, the Court should only replace the Expert Evidence Decision with an order reserving any relevant issue of non-DIFC UAE law until after the hearing of the R&E Claim, so as to avoid the delay and expense of reconvening a hearing to deal with the issues of UAE law in circumstances where, depending on the Judge’s view of the Respondents’ arguments raised at the hearing for the R&E Claim, nothing may turn on the content of non-DIFC UAE law.
40. The Respondents stated that they had made several arguments during the hearing for the R&E Claim that, if accepted by the Judge, would render any question on non-DIFC UAE law irrelevant for the purposes of disposal of the case. The Respondents had argued,inter alia, that:
(a) The public policy of the UAE incorporates DIFC law; discrete features of non-DIFC UAE law that are not present in DIFC law could not therefore form part of the public policy of the UAE;
(b) The Appellant’s complaint was about something that was permitted by legislation; therefore, it could not be contrary to public policy;
(c) The public policy defence was not engaged, as the Appellant’s complaint was about the manner in which the Awards were being enforced, while the public policy defence (under the New York Convention and so under the DIFC Arbitration Law) was about the rights granted by an arbitral award and the manner in which an arbitral award was obtained;
(d) The Appellant failed to establish (or the Court could not decide) that it had no assets in the DIFC, and accepted that, if it did have such assets, the public policy defence would not arise;
(e) Even if there were no assets, the Respondents had a legitimate interest in enforcement in the DIFC independent of any subsequent execution through the Dubai Courts; and
(f) Any problems with execution through the Dubai Courts would arise at that stage, and would be an issue for the Dubai Courts, not the DIFC Courts.
41. The Respondents also pointed out that, during the hearing for the R&E Claim, the Appellant advanced another defence under Article 44(1) of the DIFC Arbitration Law which, if accepted, would also lead to the case not turning on non-DIFC UAE law.
The Decision
Decision on Issue 1
42. I do not accept the Appellant’s argument on Issue 1 that the DIFC Courts are required under the relevant statutory provisions to apply English law by default.
43. The starting point of this discussion is what rules of evidence should be applied in this dispute, as the matter is clearly one of evidence. While it is true that, under Article 6 of the DIFC JAL and Article 30(1)(b) of the DIFC Courts Law, the DIFC Courts are to apply the DIFC’s laws and regulations, including Art 8 of the DIFC LACCL, Article 8 of the DIFC LACCL is concerned with the governing law of the substantiverights and liabilitiesbetween persons in any civil or commercial matter, and not onevidence and procedure; for that, one must look to the other laws of the DIFC.
44. Under Article 50 of the DIFC Courts Law, where proceedings are instituted in the DIFC Courts, the rules of evidence to be applied in the proceedings are “the rules that: (a) are prescribed in DIFC law;or(b) are applied in the courts of England and Wales;or(c)the DIFC Courts considers appropriate to be applied in the circumstances” (emphasis added). It is therefore clear that the DIFC Courts possess thediscretionto apply rules of evidence they consider appropriate in the circumstances, and arenotbound by the rules as prescribed in either DIFC law or English law.
45. It should be noted that, besides Article 50 of the DIFC Courts Law, there are no prescribed statutory rules of evidence as to how the DIFC Courts should treat matters of foreign or non-DIFC UAE law. The only other relevant rules are those in the RDC, which do not impose the English approach upon the DIFC Courts with regard to all questions of non-DIFC UAE law, and in fact suggest otherwise.
46. Rule 29.131 of the RDC requires any party who intends to put in evidence “a finding on a question ofnon-DIFC law” to follow the procedure set out in Rules 29.133 to 29.135 of the RDC, which are essentially notice requirements. Rules 29.131 to 29.135 are materially similar to Rule 33.7 of the English Civil Procedure Rules, which sets out the procedure that must be followed by a party who intends to introduce as evidence “a finding on a question offoreign law” by virtue of section 4(2) of the English Civil Evidence Act 1972 (c. 30) (“English CEA”). However, there is no DIFC statutory equivalent to section 4(2) of the English CEA defining what ‘non-DIFC law’ is; that is instead defined under Rule 29.132 of the RDC to mean “any law other than: (i)DIFC law or any other law in force in the DIFC; (ii) the law of any jurisdiction (other than that of the DIFC expressly chosen by any DIFC law); (iii) the laws of a jurisdiction as agreed between all the relevant persons concerned in the matter; (iv) the laws of any jurisdiction which appear to the Court to be the one most closely related to the facts of the persons concerned in the matter; and (v) the laws of England and Wales” (emphasis added).
47. The existence of Rule 29.132(i) does suggest to some extent that any law in force in the DIFC, including the UAE law of public policy on the recognition and enforcement of arbitral awards (to the extent that it applies in the DIFC pursuant to Art 44(1)(b)(vii) of the DIFC Arbitration Law), would be deemed to be a DIFC law rather than a ‘non-DIFC law’ requiring proof by expert evidence. Alternatively, it is also arguable that the question of whether the recognition and enforcement of the Two Awards would be contrary to UAE public policy within the meaning of Article 44(1)(b)(vii) of the DIFC Arbitration Law is a matter of DIFC law, on the basis that Art 44(1)(b)(vii) does not simply import into DIFC law the UAE law of public policy. However, strictly speaking, Rules 29.133 to 29.135 concern matters of procedure for a defined category of laws, and are not equivalent to the imposition of the English approach on all questions of non-DIFC UAE law before the DIFC Courts. In any event, as stated above, the DIFC Courts are not bound to treat foreign law as a fact to be proved as such, as they possess a discretion under Art 50(c) of the DIFC Courts Law to apply such rules of evidence they may consider appropriate in the circumstances.
Decision on Issue 2
48. It is clear from the above discussion that the relevant DIFC Courts possesses the discretion to apply such rules of evidence as it considers appropriate in the circumstances of any particular case, including the rules as prescribed in DIFC law and English law. The question then is what rules of evidence would be considered appropriate to apply to questions of non-DIFC UAE law before the DIFC Courts, whether it be the English approach, theTaaleemapproach (as applied by the Judge), or some other approach altogether.
49. In my judgment, neither the English approach nor theTaaleemapproach is appropriate for the DIFC Courts; rather, the DIFC Courts should adopt the approach of accepting all submissions on non-DIFC UAE law as part of legal submissions, as is usually done in international arbitration with regard to issues of any national law. I now elaborate on this propisition.
The English Approach
50. Under the English approach, foreign law is to be treated as a fact, which must be pleaded and proved by the submission of expert evidence (the “Fact Doctrine”): see e.g.Bumper Development Corp. Ltd v Metropolitan Commissioner of Police[1991] 1 WLR 1362. In England and Wales, ‘foreign law’ is defined under section 4(2) of the English CEA as, “the law of any country or territory outside the United Kingdom, or of any part of the United Kingdom other than England and Wales”.
51. The Fact Doctrine is based on the old distinction between the courts of admiralty and the courts of common law; while the former had jurisdiction in matters with a foreign element, the latter decided cases on purely domestic issues. When the common law courts extended their jurisdiction to matters with a foreign element in the 18thcentury, they were bound to treat foreign law as fact because the only ‘law’ they could apply was English common law: see Richard Fentiman, “Foreign Law in English Courts” (1992) 108 L.Q.R. 142 (at 143-144); Sass, “Foreign Law in Civil Litigation: A Comparative Survey” (1968) 16 Am.J.Comp.L. 332 at 335-340.
52. The reason why the foreign law must be proved by expert evidence (as opposed to putting the text of a foreign enactment before the court or citing foreign decisions or authoritative textbooks) is that the English judge is untrained in the foreign law in question and therefore requires the assistance of a lawyer who knows how to interpret it:Bumper Developmentat 1369, per Purchas LJ;Duchess Di Sora v Phillipps(1863) 10 H.L.Cas. 624 at 640, per Lord Chelmsford;Sussex Peerage Case(1844) 11 Cl. & Fin. 85 at 115, per Lord Brougham. Further, in the common law system, “the trial is not an inquisition into the content of relevant foreign law any more than it is an inquisition into other factual issues that the parties tender for decision by the court”:Neilson v Overseas Projects Corp of Victoria Ltd[2005] HCA 54, (2005) 223 C.L.R. 331 at [118].
53. The corollary to this is that the English judge is, in determining the content of the foreign law in question, prohibited from doing the following acts:
(a) Considering passages in foreign law materials that are not referred to by the experts (Bumper Developmentat 1369B;Nelson v Bridport(1845) 8 Beav. 527 at 542;Waung v Subbotovsky[1968] 3 N.S.W.R. 261 at 499);
(b) Rejecting uncontradicted expert evidence, except in exceptional circumstances e.g. where the expert evidence is patently biased, false or absurd (Bumper Developmentat 1369B;Sharif v Azad[1967] 1 Q.B. 605 at 616;O’Callaghan v O’Sullivan[1925] 1 I.R. 90 at 119;Allen v Hay(1922) 69 D.L.R. 193 at 195-196;Buerger v New York Life Assurance Co(1927) 96 L.J.K.B. 930 at 941;Debt Collect London Ltd v SK Slavia Praha Fotbal AS[2010] EWCA Civ 1250, [2011] 1 WLR 866 at [33], [36];A/S Tallinna Laevauhisus v Estonian State Steamship Line(1947) 80 Ll.L.R. 99 at 108;Re Valentine’s Settlement[1965] Ch. 831 at 855, per Salmon LJ, dissenting); and
(c) Ignoring evidence of foreign law on the basis that a conclusion unsupported by the evidence appears more coherent (Harleyat [48]-[50]).
54. However, foreign law is not treated simply as any other fact. Foreign law is treated as a fact “of a peculiar kind”, so that, where an English judge has a degree of familiarity with the foreign law in question (e.g. where the foreign law is written in the English language and/or its concepts are similar to those in English law), he would be expected to apply his own legal knowledge and/or experience (MCC Proceedsat [12]-[13];Morgan Grenfellat [51]-[52];Bumper Developmentat 1370;Parkasho v Singh[1968] P 233 at 250;Dalmia Dairy Industries Ltd v National Bank of Pakistan[1978] 2 Lloyd’s Rep 223 at 286; see also Fentiman at [20.139]).
55. It is immediately apparent from its origins that the Fact Doctrine does not readily apply to the DIFC. Unlike the English courts, the DIFC Courts are not restricted to applying only English common law or even DIFC law. With regard to substantive law, the DIFC Courts are, pursuant to Art 8(2) of the DIFC LACCL, allowed to apply lawsother thanDIFC law, including the laws of any jurisdiction expressly chosen by any DIFC law, the laws of a jurisdiction as agreed between all the relevant persons concerned in the matter, the laws of any jurisdiction which appears to the Court to be the one most closely related to the facts of and the persons concerned in the matter, and the laws of England and Wales. With regard to rules of evidence, the DIFC Courts may, pursuant to Art 50(c) of the DIFC Courts Law, apply rules it considers appropriate to be applied in the circumstances.
56. More important, however, is the fact that the composition of the DIFC Courts bench differs radically from that of the English courts by having judges who have expertise in the laws of various jurisdictions, including Singapore, Australia, Malaysia, New Zealand and the UAE (and possibly in the future from other common law jurisdictions). The justification for the ‘proof by expert evidence’ requirement (i.e. lack of expertise) plainly does not apply where the foreign law in question belongs to a jurisdiction in which the judge hearing the case is qualified. As rightly pointed out by the Respondents, if expert evidence of non-DIFC UAE law were to be required in every case because it is a ‘foreign’ or ‘non-DIFC’ law, then expert evidence woulda fortioribe required of all other foreign laws, notwithstanding the individual legal expertise of the DIFC judge hearing the case. This has been described as unworkable in the arbitration context, where the arbitral tribunal may well be qualified in the applicable law on the merits, but the applicable law is a wholly different set of laws from thelex arbitri(seeRedfern and Hunterat [6.169-6.172]). If, for example, the issue before me as a judge in the Court of First Instance involved questions of Singapore law, it would certainly be unnecessary for Counsel to be compelled to adduce expert evidence on Singapore law. Nor would it be necessary if the issue involved Australian law before Justice Roger Giles, or Malaysian law before Justice Tun Zaki Azmi, and certainly not English law before any of our English brethren or, in particular, non-DIFC UAE law before any of the UAE-qualified judges.
57. On non-DIFC UAE law specifically, as rightly pointed out by the Respondent, the majority of the current DIFC judges have expertise and experience in UAE law, either as a result of having trained in and practised in UAE law or having sat on tribunals to resolve disputes in accordance with non-DIFC UAE law (e.g. the Dubai World Tribunal). Further, each overseas judge will have had exposure to substantive UAE law from hearing a number of cases in the DIFC Courts involving issues of UAE law. Given that even an English judge is expected to draw upon his own legal and judicial training when dealing with foreign laws that bearsomesimilarity to English law (seeMCC Proceedsat [12]-[13];Morgan Grenfellat [51]-[52]), it is difficult to see any good sense in a blanket approach of requiring all DIFC judges, regardless of his or her background in UAE law, always to decide questions of non-DIFC UAE law by reference to expert evidence and subjecting them to the prohibitions that follow from the Fact Doctrine.
58. It should also be noted that, as pointed out by the Respondents, the DIFC Courts have thus far not adopted the English approach with regard to issues of non-DIFC UAE law, though the decisions made thus far are of limited assistance as they did not directly deal with the issue of the treatment of non-DIFC UAE law before the DIFC Courts.
(a) InLutfiat [65]-[71] andHerzat [61]-[65], [87]-[93], the DIFC Courts of Appeal considered pension rights eligibility under UAE federal law (in particular, UAE Federal Law No. 7 of 1999 as amended by UAE Federal Law No. 7 of 2007 in respect of the Federal Authority for Pensions and Social Security and UAE Federal Law No. 6 of 1999 in respect to the establishment of the Federal Authority for Pensions and Social Security) without any resort to expert evidence.
(b) InTVM Capitalat [14]-[23], the DIFC Courts of Appeal considered the effect of Article 269 of the UAE Federal Criminal Procedure Code (UAE Federal Law No. 35 of 1992) upon the DIFC Courts without any resort to expert evidence.
(c) InInjazatat [32]-[34] andAl Fattan Engineeringat [50]-[57], the DIFC Courts of First Instance considered the effect of Article 203(2) of the UAE Civil Procedure Code (Federal Law No. 11 of 1992) without any resort to expert evidence.
(d) InX v Y, the Appellant alleged that the DIFC JAL and the DIFC Arbitration Law were unconstitutional vis-à-vis the UAE Civil Procedure Code (UAE Federal Law No. 11 of 1992, as amended by UAE Federal Law No. 30 of 2005), and requestedinter aliafor the issue to be referred to the Union Supreme Court of the UAE pursuant to Articles 99(3), 121 and 151 of the UAE Constitution. The DIFC Courts of First Instance dismissed the Appellant’s Constitutionality Application without any resort to expert evidence, notwithstanding the fact that the resolution of the application involved a comparison between UAE federal law and DIFC law.
59. Notably, English judges have already expressed some discomfort with the rigidity of the English approach. InMorgan Grenfell, which involved issues of Italian law, the Court of Appeal of England and Wales commented that, while the correct approach under English law was to consider the evidence of foreign law substantially in the same way as other evidence of fact and opinion, it added (at [53]) that it hoped the English courts could soon be permitted to “take judicial notice of decisions of foreign courts, including those in the European Union, (and perhaps academic writings) in deciding what the relevant foreign law is in cases of this kind”. This rigidity arguably has even less place in the DIFC Courts, where the judge hearing the case may be fully qualified in the national law in question.
TheTaaleemApproach
60. In the decision below, the Judge applied theTaaleemInTaaleem, DCJ Colman did not address the issue of whether non-DIFC UAE law would be construed as ‘foreign’ law for the purposes of admitting expert evidence, and instead took a “realistic and practical approach”, which is a two-pronged approach (with the second prong beingobiter dicta), as follows.
(a) In cases where the relevant DIFC Courts is manned by a judge whose training is in the common law system, that judge should generally require that the non-DIFC UAE law in question be established by expert evidence, unless the parties are able to agree on the non-DIFC UAE law to be put before the judge in some form or other.
(b) In cases where the relevant DIFC Courts is manned by a judge whose training includes non-DIFC UAE law, that judge should not be required to call for expert evidence to prove the interpretation of the non-DIFC UAE law in question.
61. Ultimately, I take the view that theTaaleemapproach should no longer be followed as an inflexible rule (to the extent that it ever was such a rule owing to theobiternature of DCJ Colman’s remarks) for two reasons. The first reason is that, while I agree with DCJ Colman’sobiterobservation that a judge who is trained in non-DIFC UAE law should not be required to call for expert evidence to resolve issues on non-DIFC UAE law, I do not think that there is any practical reason why any other DIFC judge (i.e. one not fully conversant with UAE law) should require expert witnesses to assist him, as any DIFC judge should in general be able to fully analyse any legal submissions (including those on UAE law) that are given to him, whether drafted by lawyers trained in non-DIFC UAE law or not.
62. The second reason is that theTaaleemapproach suffers from certain practical difficulties that make it inappropriate as a universal practice. As observed by the Respondents, most of the practical difficulties of theTaaleemapproach are not insurmountable. However, theTaaleemapproach meets particular difficulty in two areas.
63. The first difficulty is with dealing with the question of whether the DIFC judge hearing the case is “untrained” in non-DIFC UAE law to the extent that expert evidence is required. As theTaaleemapproach essentially adopts the English approach whenever the DIFC Courts is manned by a judge whose training is in the common law system and the issue involves questions of non-DIFC UAE law, it brings with it all of the prohibitions of the English approach, notwithstanding that the judge in question may have significant judicial experience in non-DIFC UAE law. The problems with the rigidity of this approach have been canvassed above and will not be repeated here.
64. The second difficulty is dealing with the conduct of appeals. This is illustrated by the following scenarios.
(a) In one scenario, suppose that the trial judge were not qualified in non-DIFC UAE law, and expert evidence was then required to prove the content of the non-DIFC UAE law in question. An appeal is then brought, and the DIFC Courts of Appeal, made up of judges both qualified and unqualified in non-DIFC UAE law, would have to deal with the issue of the correctness of the trial judge’s findings on the content and interpretation of non-DIFC UAE law. Should the non-DIFC UAE law-qualified judges resolve the issue by reference to the expert evidence, notwithstanding that they are fully qualified in it? Further, since the English approach expects the appellate court to apply its own legal skill and experience in resolving questions of foreign law, should the DIFC judges who were qualified in non-DIFC UAE law apply their own expertise to the issue, with the DIFC judges who were not so qualified deferring to their opinions, notwithstanding that they may have substantial judicial experience in non-DIFC UAE law?
(b) In another scenario, suppose the trial judge were qualified in non-DIFC UAE law, with expert evidence on non-DIFC UAE law not being required, and an appeal was made to the DIFC Courts of Appeal composed of judges both qualified and unqualified in non-DIFC UAE law. Should the DIFC judge(s) who were unqualified in non-DIFC UAE law, but possess judicial experience of UAE law, defer to the opinions on UAE law of: (a) the UAE qualified trial judge; or (b) the UAE qualified appellate judge(s)?
(c) In a further scenario, suppose the trial judge were not qualified in non-DIFC UAE law and expert evidence were duly admitted, and an appeal was then made to the DIFC Courts of Appeal composed of judges who were all qualified in non-DIFC UAE law. It would evidently be absurd to expect such an appellate court to resolve such issues of non-DIFC UAE law by reference to expert evidence.
65. These practical difficulties render theTaaleemapproach unworkable in most scenarios where an appeal is made. It should therefore no longer be followed. There is a far more appropriate approach for the DIFC Courts in dealing with questions of non-DIFC UAE law, to which I shall now turn.
The International Approach66. As stated by DCJ Colman inTaaleem, the DIFC Courts are no ordinary courts; they are common law courts administering justice within a circumscribed jurisdiction covering civil and commercial matters only, within a wider jurisdiction exercised by the non-DIFC Dubai Courts in the UAE. The non-DIFC Dubai Courts administer local law that is derived from the civil law system, with different principles applying both in relation to substantive civil law and in relation to the adducing of evidence. Some, but not all, of the DIFC judges are trained in non-DIFC UAE law. The result is that, where questions of non-DIFC UAE law arise before the DIFC Courts, the judge hearing the case may or may not be qualified in non-DIFC UAE law, and where such questions arise before the DIFC Courts of Appeal, the judges hearing the appeal may be comprised of only some judges that are qualified in non-DIFC UAE law.
67. Such a situation is analogous to the situation in international arbitration and international commercial courts, where the arbitral tribunal or court may be made up of arbitrators or judges with very different qualifications, with some who may not be qualified in the applicable (or relevant) law for the issue at hand. In such a scenario, the Fact Doctrine is an inapplicable legal fiction, and international arbitral tribunals and international commercial courts instead treat all ‘law’ as ‘law’, with Counsel making legal submissions on disputed areas of the applicable (or relevant) law, appending expert opinions if necessary, and, in the case of international commercial courts, the court being allowed to take judicial notice of the foreign law in question (the “International Approach”).
68. InRedfern and Hunter, the following remarks are made (at [6.169]-[6.172]) on the subject of experts on foreign law in the context of international arbitration:
“In the common law system judges sitting in their national courts expect the substantive law of foreign country to be ‘proved as fact’ by expert evidence. This convenient fiction has worked satisfactorily for hundreds of years in the court system, and it appears to work reasonably well in domestic arbitration, although in a domestic arbitration it is not likely that the system of law governing the substance of the parties’ relationship will be ‘foreign’ either to the place of arbitration or to the arbitral tribunal.
It takes only a brief moment of reflection to appreciate thatthe convenient fiction that ‘foreign law is fact’ does not work in the context of an international arbitration. Imagine three French lawyer arbitrators, sitting in England, with French avocats presenting arguments on the applicable French substantive law. Any suggestion that English procedural law would require the relevant French substantive law to be proved as fact would surely be greeted with some hilarity.
Equally, if a hybrid tribunal composed of one French lawyer, one Egyptian lawyer, and one Canadian lawyer were sitting in London applying the substantive law of Kuwait, how would the Kuwaiti law issues be handled? Would experts on Kuwaiti law give oral evidence to the tribunal, and solemnly change places to cross-examine each other? This would be absurd.
In practice, the international arbitration community has solved this dilemma in a pragmatic and efficient way. In the twenty-first century, in almost all international arbitrations, ‘law’ is treated as ‘law’.Each party usually has a duly qualified lawyer, often an academic, from the relevant jurisdiction in its team of counsel.Written expert opinions on disputed issues of the applicable law will be submitted with the memorials (with replies if necessary), and the relevant counsel from each team are ready to answer questions from the tribunal and to make oral submissions by reference to legal authorities from the relevant jurisdiction.” (emphasis added).
69. In Lew, Mistelis & Kröll,Comparative International Commercial Arbitration(The Netherlands: Kluwer Law International, 2003) at pp 440- 443, the authors make the following comments:
“The situation in international arbitration is different. There are no “forum” procedural requirements to follow. Rather, the composition of the tribunal and the attitude of the arbitrators, often influenced by their own legal background, is a crucial factor.Equally there is no “foreign” law.
…
A third and preferred option is a hybrid procedure, fixed for each arbitration and drawing on both the inquisitorial and adversarial systems.The parties make full legal argument, in writing and orally, about the applicable rules. They may support this with legal materials and independent expert reports. The tribunal may request further specific details about the applicable law. It will, however, decide itself what the specific applicable rules are rather than rely on any expert. This approach leaves considerable discretion to the tribunal and is increasingly the norm in international arbitration.” (emphasis added).
70. The Singapore International Commercial Court (“SICC”) is a division of the Singapore High Court that is designed to deal with transnational commercial disputes, and is in several ways similar in nature to the DIFC Courts. The SICC has the option of adopting the International Approach in certain situations. Under O 110 rr 25-29 of the Singapore Rules of Court (Cap 322, R 5, 2014 Rev Ed), the SICC may, on the application of a party, make an order allowing any question of law to be determined on the basis of submissions (oral or written or both) instead of proof (provided that the SICC is satisfied that all parties are or will be represented by counsel who are competent to submit on the relevant questions of foreign law), and in determining the question of foreign law, the SICC judges are allowed to take judicial notice of foreign law, including of the legislation and decisions of the courts in the foreign country in question. In an appeal from a SICC judgment or order to the Singapore Court of Appeal, the Singapore Court of Appeal may also determine any question of foreign law on the basis of submissions, either on its own motion or on a party’s application, or where the question of foreign law has already been ordered by the SICC to be determined on the basis of submissions.
71. I believe that there are two reasons why the International Approach (and not the English orTaaleemapproach) should be applied to questions of non-DIFC UAE law before the DIFC Courts, pursuant to the discretion conferred under Art 50(c) of the DIFC Courts Law. First, unlike the rigid English approach, the International Approach enables the DIFC Courts to tap on the collective wisdom of its judges on issues of non-DIFC UAE law, whether it be derived from qualifications, practice or judicial experience. Second, by having Counsel make legal submissions on the non-DIFC UAE law in question, appending relevant expert opinions (if any), the DIFC Courts will not meet any of the practical concerns with theTaaleemAlthough legal submissions cannot be tested by cross-examination as in the case of expert evidence, legal submissions may be criticised by opposing Counsel from the bar. Further, there is nothing to stop Counsel from having on their team a duly qualified expert in non-DIFC UAE law so as to ensure that they would be ready to make oral submissions and answer any questions from the Court. Although this may lead to the effect that parties will need to instruct two Counsel or even two firms of lawyers, the Respondents have made the cogent observation that, even where legal experts are going to be hired, there would usually be in practice a need to hire two Counsel or law firms in any event (as is the common practice in international arbitrations).
72. Further, my view is that the International Approach should apply forallquestions of non-DIFC law, whatever that law may be. While international arbitration has historically and in general followed the practice of the English courts in requiring experts on legal issues to give formal evidence by way of witness statements in the same way as other technical experts, and to have them cross-examined individually on such witness statements, the tide is now turning. Increasingly, experienced international arbitration practitioners have concluded that this method of receiving the opinions of legal experts is both doctrinally unnecessary as well as forensically inefficient to discover and understand the relevant principles of “foreign” law. It may be questioned why legal experts should be treated differently from other experts, whom it is agreed should continue to give the expert evidence in the traditional way. There are (at least) three reasons for this.
(a) First, international arbitration tribunals are usually well-equipped to assess for themselves the persuasiveness of legal (as opposed to technical) arguments. An international arbitration tribunal is usually made up of a panel of three legally qualified persons. It is only very rarely that one would find an arbitral tribunal made up of a panel of three non-lawyers, or even a majority of non-lawyers. An all-lawyer panel would already be familiar with the methodology of acquiring legal knowledge, and can assess for itself whether or not an opinion on ‘foreign’ law is persuasive, but the same cannot be said when an all-lawyer panel has to decide issues involving detailed knowledge of non-legal fields, e.g. technology and measurement of financial loss, as the arbitral tribunal will for this purpose be composed of laymen listening to experts in a field of study with which the tribunal will not be expected to be familiar.
(b) Second, while the role of any expert is to analyse the known facts (or the facts to be proved) and to offer expert opinions on the relevant questions arising from such facts, arbitral tribunals have found that legal experts that have been asked to opine on legal doctrines so as to educate the arbitral tribunal on the principles of the governing law (or any other relevant law) often overstep their proper role and offer their opinions by applying the principles of the applicable (or relevant) law to the facts in question and giving their conclusions on the ultimate decision that should be made by the arbitral tribunal on those facts. The arbitral tribunal then has to sift through the witness statements of the legal experts to separate the experts’opinions on the relevant principles of lawfrom theconclusions on the factsbased on the applicability of the relevant principles of law. In such situations, arbitral tribunals have often dispensed with cross-examination of expert witnesses, as their witness statements are, to a certain extent, tainted by their attempt to usurp the function of the arbitral tribunal on the ultimate decision to be made on the question of law in issue. They often forget (or are not briefed by their instructing lawyers) that, as stated by Cresswell J inNational Justice Compania Naviera S.A. v Prudential Assurance Co Ltd (“The Ikarian Reefer”)[1993] 2 Lloyd’s Law Rep 68 at 81, “[a]n expert witness … should never assume the role of the advocate”. This principle is also found in the DIFC Courts, where Rule 31.6 of the RDC states that an expert “should assist the Court by providing objective, unbiased opinion on matters within his expertise, and should not assume the role of an advocate”. The common solution to such situations is then to treat the expert witness statements as part of counsel’s arguments, with the expert witnesses being able to make oral submissions, both on the legal principles and their applicability to the facts, and to answer questions on those submissions from the opposing side. Such a solution may have difficulties in a national common law court, where: (i) witness statements lead inevitably to cross-examination (except in the SICC); and (ii) a Court that decides that some part of the witness statement is objectionable must either disallow the entire witness statement or excise the objectionable part, which is an unwieldy and time consuming process. For the sake of completeness, I should mention that an alternative solution would be for the arbitral tribunal to appoint its own independent expert(s) to report to it on specific issues designated by the arbitral tribunal. I note here that the DIFC Courts also have that option, pursuant to Rule 31.29 of the RDC, although neither party to this present appeal has suggested recourse to this option.
(c) Third, the practice of cross-examination of legal experts has been found to be a relatively inefficient way of testing their legal opinions. The usual tactics of forensic cross-examination are particularly unsuitable for this function and take up more time than the results justify. Furthermore, cross-examination of experts in all fields has been found to be not the best way of presenting the relevant issues to the arbitral tribunal and organising the points agreed or disagreed between the respective experts. This has led to the wide-scale adoption of witness conferencing in the case of experts of all disciplines. This entails two or more experts with differing views appearing together at the same time to present their respective opinions, indicating: (a) where they are in agreement; (b) where they disagree; and (c) why they disagree. Such a practice is not easily workable under the traditional method of cross-examination of expert witnesses, which is both time inefficient (because it means doubling the time for hearing both experts separately examined, cross examined and re-examined as compared with witness conferencing) and could also lead to rebuttal evidence from the experts, thereby exacerbating the inefficiency of the process. The adoption of the International Approach would therefore mean that the practice of witness conferencing will generally not be available for legal experts; however, the same effect of witness conferencing can be achieved by a Socratic dialogue between the Court and the legal experts (and between the legal experts themselves) in oral submissions.
73. Accordingly, given the jurisdiction that this Court has to adopt such rules of evidence as it sees fit, including the rules on the receipt of opinions of legal experts, I take the view that, in all cases where legal experts are offering expert reports on issues of any law other than DIFC law (i.e. not merely non-DIFC UAE law), the practice I have described above should be the starting point for deciding on the procedure to be adopted for the presentation of expert legal reports. The presumptive rule should be that legal experts are to write briefs with their analysis of the relevant legal principles of the applicable or relevant law, and to make further submissions applying the legal principles to the facts as alleged by the respective parties, or to argue for a particular decision to be delivered by the Court. I should make it clear that this is only a presumptive rule, and the trial judge should always have the discretion to proceed in the manner in which he considers most beneficial for his education – in a system of law with which he is not confidently familiar, even if this results in adopting either of the other approaches described above (or possibly even some other approach). For example, the relevant legal expert may not be qualified to act as counsel in the case because he does not meet the requirements for registration as a practitioner with rights of audience under Part II of the Register of Practitioners. In such cases the trial judge may wish to adopt, pursuant to Rule 31.48 of the RDC, some variant of expert conferencing (by whatever name called) between the two legal experts involved for greater elucidation of where the disagreements (and the reasons for such disagreements) lie. The relevant approach to adopt should therefore be discussed at some appropriate case management conference at an appropriate time before the filing of witness statements. This would emphasize the flexibility of treatment of the subject of proving the content and interpretation of all non DIFC laws in line with the Overriding Objective.
74. In this case, Counsel for the Appellant have had, at the hearing for the R&E Claim, a full opportunity to make legal submissions based on Mr Whelan’s Statement, and have indeed deployed all the material that was in Mr Whelan’s Statement (save for the Statement itself). This is borne out by the exchange between Counsel for the Appellant and the Court, as recorded in the hearing transcript as follows:
“MR THOMPSON: Turning to the substance of the appeal, as I say it, it is an appeal from the decision of His Excellency Judge Ali … You will have noticed that it is a decision of 12 October last year in response to an application made about ten days earlier. That order was made and provided to parties at the time without reasons, and the reasons were only provided on 15 December, and that is at the next tab, in tab 3. The reasons were provided – it is dated 15 December, but the parties received it on 16 December. You see, the difficult is that it was on 16 December that the parties attended before the same judge, His Excellency Judge Ali, to hear the substance of the trial, and my learned friend and I both appeared on what, and the trial proceeded, as one would expect, without the expert evidence that the defendant had sought and which the judge had already denied. The net effect was that the trial, which was listed for two days but actually we managed to complete in one, proceeded without the benefit of any expert evidence.
JUSTICE SIR RICHARD FIELD: But were there any submissions made to the judge that were founded in fact on Mr Whelan’s report?
MR THOMPSON:Yes, there were. There were submissions made by me found in that report and submissions made by my learned friend in response to that. That is absolutely right.…” (emphasis added).
75. This was later confirmed by Counsel for both Parties in the following exchange with the Court:
“MR MONTAGU-SMITH: … what I can tell you is that effectively what happened, or at the very least what should have happened, is that the arguments that are set out and described in an opinion by Mr Whelan and the supporting material were deployed in the December hearing, which is the final hearing. …
Effectively what is the value of introducing a statement from Mr Whelan at this stage if it is right that they have had the opportunity to convey the content of that report to the judge already by way of submission and underlying material? What is the additional value? The only additional value can be that it comes from Mr Whelan in deciding these sorts of issues. …
…
CHIEF JUSTICE MICHAEL HWANG: … I just wanted to clarify. You say that Mr Thompson or another counsel at the hearing has already deployed the material that was in Mr Whelan’s statement. Did you say that?
MR MONTAGU-SMITH: Yes. Effectively, yes. All of the material save for the statement itself, so all of the exhibits he relies on, all of the case law, all of that was included in the trial bundle.
CHIEF JUSTICE MICHAEL HWANG:So they adopted the fruits of his research, if you like?
MR MONTAGU-SMITH: Exactly. Exactly.
…
CHIEF JUSTICE MICHAEL HWANG: I think you were saying earlier that certainly all of the secondary materials that were attached to Mr Whelan’s reports were submitted. They are in, right, but then I suppose Mr Thompson is going to say that you need somebody to make sense of all of the secondary material so to arrive at an analysis.
MR MONTAGU-SMITH: This is what we have –
CHIEF JUSTICE MICHAEL HWANG: That particular material, that analysis is not somehow before the court. I have not compared the submissions with Mr Whelan’s statement. Is there a deprivation in some way of the defendant’s presentation of its case before the trial judge?
MR MONTAGU-SMITH: No. There is absolutely no respect in which the trial judge has curtailed the capacity of the parties to make whatever submissions they want. We can make whatever submissions we want to, and do.
CHIEF JUSTICE MICHAEL HWANG: Yes. And that is on the ability to and Mr Thompson has conceded that he could have done it that way.
MR MONTAGU-SMITH: Yes.
CHIEF JUSTICE MICHAEL HWANG: But you are telling us, in fact, there is no injustice because, in fact, the judge was aware of exactly the line that Mr Whelan was advocating because it is summarised or to be found somewhere else in the materials that the judge is receiving.
MR MONTAGU-SMITH:What happened was at the December hearing, my learned friend took what he wanted from Mr Whelan’s statement and made it into a legal argument, made it into a submission.
JUSTICE SIR RICHARD FIELD: That was in the original skeleton argument?
MR MONTAGU-SMITH: Yes.So there were submissions on the issue. Now it may be that it does not match precisely the wording of the witness statement from Mr Whelan but that is a matter for my learned friend as to which submission he submits (Overspeaking)
…
CHIEF JUSTICE MICHAEL HWANG: … I am going to ask Mr Thompson to come back after lunch and deal with the last point that Mr Montagu-Smith has been addressing us on, which is (a) that effectively you have got Mr Whelan’s views in by incorporating them into your own submissions at the trial, and (b) if you did not for some reason incorporate any arguments, should we take that into account having regard to the fact that you could have incorporated by cut and paste the entirety of Mr Whelan’s opinions and therefore you could have adopted it wholesale. You chose not to do so, so should we give you a second bite at the cherry as it were? …
MR THOMPSON: … We have a position where at the first opportunity, my client said, “This is expert evidence and we want it in” that was denied and so they put in factual evidence saying it falls within the rubric of the exception in the judge’s order. That was also denied. So it was only really as the fallback position that the opinions and comments of Mr Whelan could have been put in qua submissions in my mouth.
To answer your Lordship’s question directly, was this something which was put before the court by me, was this something that I had if I did not do it at all or property, if I had an opportunity to do it, the short answer to the question is yes. I accept what my learned friend says about that. …
…
MR THOMPSON: …If the solution to this case lies in allowing further submissions to be made I would have some sympathy with my learned friend’s position that we, the defendant, have really already had the opportunity to do it. The point is that the opportunity to do it is inadequate. The opportunity of an expert helping me make submissions, or making submissions on his own, is not the solution to the problem. The solution to the problem, in my submission, lies in the fact that this is expert evidence, which ought to be dealt with in the usual way of foreign law, and can then be addressed using the mechanisms that are very familiar to the court. …” (emphasis added)
76. In the circumstances, the Appellant has already made its legal submissions on non-DIFC law before the relevant hearing, and has in effect made substantial use of the International Approach. For this reason (and the reasons stated earlier in this Judgment), I decided that the Appeal should be dismissed.
Decision on Issue 3
77. Given the findings on Issues 1 and 2, it was unnecessary for a decision to be made on Issue 3.
H.E. JUSTICE OMAR AL MUHAIRI:
78. I have no comments to add and agree with the above Judgment of the Chief Justice.
JUSTICE SIR RICHARD FIELD:
79. I have no comments on the above and agree with the above Judgment of the Chief Justice.
Issued by:
Mark Beer
Registrar
Date of Issue: 23 November 2015
At: 10am