Introduction of Technology & Construction Division in DIFC – A welcome new forum for “technically complex” disputes

15 May 2017

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The one month public consultation for the draft rules of the proposed Technology & Construction Division (“TCD”) of the DIFC Courts recently closed. Already established in the Middle East as an important and reliable forum for resolving commercial disputes, the DIFC Courts will be able to add another “string to its bow” once the TCD opens for business, as it will be better equipped to deal with a wide range of “technically complex” issues often historically referred to arbitration in this region, such as:

• building, engineering or other construction disputes;
• claims by and against engineers, architects, surveyors, accountants and other specialised advisers relating to the services they provide;
• claims relating to the design, supply and/or installation of computers, computer software and related network systems;
• breach of repairing covenant between landlord and tenant;
• claims between neighbours, owners and occupiers of land in trespass, nuisance etc.;
• claims arising out of fires; and
• challenges to decisions of arbitrators in construction and engineering disputes.

Although similar to the Practice Directions of the Technology & Construction Court (“TCC”) of  England & Wales, under the proposed rules of the TCD, and as part of its case management function, the TCD judge is likely to consider the appointment of a “court appointed” expert, inspections, and the use of a Scott Schedule for setting out the Claimant’s case item by item, alongside the Defendant’s response. Furthermore, Pre-Trial Reviews are not compulsory as is the case in the TCC.

There are many positive aspects to establishing the TCD, including:

• the TCD can be specifically elected as the jurisdiction for dispute resolution where it falls within the rules of the TCD;
• specialist judges with experience in technically challenging disputes will hear the cases;
• proceedings will be conducted in the English language;
• proceedings will not be confidential (as would be the case in most disputes referred to arbitration) thus the TCD judges will provide reasoned and detailed judgments to which potential litigants can refer in order to provide guidance and greater certainty of outcome;
• speed, efficiency and costs of the TCD should improve on that of institutional arbitration, where multi- arbitrator cases are often time-consuming, subject to delay and escalating legal and tribunal costs; and
• often issues in enforcing arbitral awards arise within the region. As a court judgment from the outset, the successful party is likely to face fewer challenges in recovering under a TCD judgment.

Some considerations which may discourage potential users of the TCD are:

• as proceedings are not confidential, some users may prefer to refer the matter to arbitration where confidentiality will be maintained;
• some parties will prefer to refer matters to the local Dubai Court where proceedings will be conducted in the Arabic language; and
• costs of litigation (although potentially recoverable by the successful party) are often much higher on high value, complex matters than in the local Dubai Courts.

That said, the TCD will provide parties with a wider range of dispute resolution forums for “technically complex” matters, within the Middle East. Given the ever increasing volume of high value construction projects, and the fast pace of technology development within the region, this makes the introduction of the TCD a very shrewd and timely addition to the DIFC Courts. The final rules for the TCD are expected to be published by the end of the second quarter of this year.

Nichola Reece-Burton (ACIArb)

Barrister-at-Law/Senior Legal Consultant

Head of Litigation & Dispute Resolution

James Berry & Associates Legal Consultants