In a significant recent judgment, the DIFC Court of Appeal overturned the decision of Justice Sir Jeremy Cooke and clarified the circumstances in which the DIFC Court can grant an injunction in support of foreign proceedings.

By way of background, the Claimants commenced proceedings against the Defendants in Kuwait claiming that assets had been misappropriated from a Cayman company. Relying on these Kuwaiti proceedings, the Claimants sought and obtained an ex parte worldwide freezing injunction against the Defendants in the DIFC. The Defendants were not DIFC entities and had no discernible connection to the DIFC.

The Court of First Instance grounded jurisdiction on Part 25.24 of the RDC. This provision states that any party applying for an injunction in support of foreign proceedings should do so through the Part 8 procedure. Applying the previous judgment in Nest Investments v Deloitte & Touche [2018] CA 011 and Jones v. Jones [2022] CFI 043, Justice Sir Jeremy Cooke found that Part 25.24 was a “DIFC Regulation” and that, when read in conjunction Article 5A(1)(e) of the Judicial Authority Law, the rule was sufficient to confer a jurisdiction on the court to grant an injunction against a party whether or not they had any connection with the DIFC.

The Court of Appeal disagreed with this approach. According to the Chief Justice, “RDC 25.24 should not be read on its own, but rather in parallel and consistent with the gateways of Article 5 of the JAL.” The injunction was discharged and the findings of contempt against the Defendants for their failure to comply with the injunction were overturned.

It now appears clear as a result of this appeal judgment that, for the future, the DIFC Court will only grant an injunction in support of foreign proceedings if the jurisdictional gateways in Article 5A(1)(a)-(d) are satisfied. An example might be where a DIFC entity is sued in a foreign jurisdiction and a claimant wishes to freeze its assets pending judgment.

A copy of the DIFC Court of Appeal’s judgment is available here.

For further information please contact William Prasifka and Patrick Dillon-Malone.