NAATIQ v NABEEH [2024] DIFC ARB 018 — Stay of proceedings pending Judicial Committee determination (25 September 2024)

This order addresses the procedural intersection of DIFC-seated arbitration and parallel enforcement actions in the Dubai Courts, specifically regarding the application of Decree 29 of 2024 to stay proceedings during jurisdictional conflicts.

What was the nature of the dispute between Naatiq and Nabeeh regarding the USD 13,490,000 aircraft lease agreement?

The dispute arises from a back-to-back lease agreement for an Airbus A320-200 aircraft, involving Naatiq (a Libyan airline) and Nabeeh (a UAE-based aircraft lessor). The lease, spanning 71 months, carried a total value of approximately USD 13,490,000. Following the commencement of arbitration under the DIAC Rules, the Emergency Arbitrator issued interim relief orders in February and March 2024, which Nabeeh subsequently sought to enforce in the Dubai Courts.

Naatiq initiated these proceedings in the DIFC Court to nullify those emergency orders and obtain an anti-suit injunction. The core factual tension lies in the parties' conflicting attempts to secure or block enforcement of interim measures across two distinct judicial systems. As noted in the court's summary:

The Defendant, Nabeeh (“Nabeeh”) commenced arbitration of a dispute with the Claimant, Naatiq (“Naatiq”) pursuant to the Dubai International Arbitration Centre Arbitration Rules (“DIAC Rules”).

The full details of the underlying lease dispute and the procedural history can be found at: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0182024-naatiq-v-nabeeh

Which judge presided over the Naatiq v Nabeeh directions hearing in the DIFC Arbitration Division?

Justice Rene Le Miere presided over the matter in the DIFC Court of First Instance, Arbitration Division. The directions hearing, which addressed the stay application and the broader arbitration claim, took place on 13 September 2024, with the formal Order with Reasons issued on 25 September 2024.

What specific legal arguments did Naatiq and Nabeeh advance regarding the stay of proceedings?

Naatiq argued that the concurrent existence of the DIFC arbitration claim and the enforcement proceedings in the Dubai Courts constituted a conflict of jurisdiction that necessitated a stay under the newly enacted Decree 29 of 2024. Naatiq contended that the Judicial Committee for Resolving Conflicts of Jurisdiction (the "Judicial Committee") was the appropriate body to resolve this impasse.

Nabeeh, conversely, resisted the stay, maintaining that the DIFC Court should proceed with the arbitration claim. The central point of contention was whether the mere existence of parallel proceedings in the Dubai Courts—specifically those seeking to enforce the Emergency Arbitrator's orders—triggered the mandatory stay provisions of the 2024 Decree. Naatiq’s position was summarized by the court:

Thus, the claimant submitted, so long as the two cases were “alive” without a ruling on jurisdiction, there was a conflict of jurisdiction.

What was the precise doctrinal question the court had to answer regarding the application of Article 7 of Decree 29 of 2024?

The court was tasked with determining whether the initiation of enforcement proceedings in the Dubai Courts by Nabeeh, in the face of an ongoing DIFC-seated arbitration, created a "conflict of jurisdiction" sufficient to trigger the mandatory stay mechanism under Article 7 of Decree 29 of 2024. The doctrinal issue was whether the DIFC Court is required to pause its own proceedings the moment a party refers a jurisdictional conflict to the Judicial Committee, even before the Committee has issued a final determination on which entity holds the authority to hear the matter.

How did Justice Rene Le Miere apply the test for a stay under the 2024 Decree?

Justice Le Miere reasoned that the purpose of Decree 29 of 2024 is to prevent the risk of inconsistent or contradictory judgments by providing a mechanism for the Judicial Committee to intervene at an early stage. By interpreting the Decree, the Court concluded that the legislative intent was to ensure that the Judicial Committee acts as the final arbiter of jurisdictional boundaries between the DIFC and the Dubai Courts.

The Court found that because Naatiq had formally applied to the Judicial Committee, the statutory requirement for a stay was satisfied. The reasoning emphasized the necessity of judicial comity and the avoidance of procedural friction:

For all those reasons, I find that the Arbitration Claim is stayed pending the issuance of the Judicial Committee’s decision determining the competent judicial entity having jurisdiction to hear and determine the Arbitration Claim to this Court and the Petition to the Dubai Court.

Which specific statutes and rules were applied to determine the stay in Naatiq v Nabeeh?

The Court primarily relied on Article 7 of Decree No. (29) of 2024, which governs the Judicial Committee for Resolving Conflicts of Jurisdiction. Additionally, the Court referenced Article 41 of the Arbitration Law 2008, which provided the basis for Naatiq’s original claim to nullify the emergency arbitration orders. Procedurally, the Court operated under the Rules of the DIFC Courts (RDC), specifically RDC 45, which governs the court's power to grant stays and manage proceedings.

How did the court utilize precedents like Lakhan v Lamia in its reasoning?

The Court utilized Lakhan v Lamia [2021] DIFC CA 001 to address the threshold for what constitutes a "conflict of jurisdiction." In Lakhan, the Court of Appeal clarified that a party does not need to wait for a formal ruling on jurisdiction from a competing court to establish that a conflict exists; rather, the existence of "live" proceedings in two forums is sufficient to trigger the need for resolution. Justice Le Miere applied this principle to confirm that the ongoing enforcement actions in the Dubai Courts, coupled with the DIFC arbitration claim, met the criteria for a referral to the Judicial Committee.

What was the final disposition and relief granted by the DIFC Court?

Justice Le Miere granted the Stay Application in its entirety. The Court ordered that all proceedings in relation to the Arbitration Claim be stayed pursuant to Article 7 of Decree 29 of 2024, pending the Judicial Committee’s determination of the competent judicial entity. The costs associated with the Stay Application and the directions hearing were reserved for a later date, meaning neither party was awarded immediate costs.

What are the wider implications of this ruling for DIFC arbitration practitioners?

This order confirms that the DIFC Court will strictly adhere to the stay requirements of Decree 29 of 2024 when a jurisdictional conflict is referred to the Judicial Committee. Practitioners must anticipate that any parallel enforcement action in the Dubai Courts regarding DIFC-seated arbitrations will likely result in a mandatory stay of DIFC proceedings. This reinforces the necessity of navigating the Judicial Committee process early in the litigation strategy. For a deeper analysis of how this case fits into the broader jurisdictional landscape, see: Naatiq v Nabeeh [2024] DIFC ARB 018: The Judicial Committee’s Shadow Over DIFC Arbitration.

Where can I read the full judgment in Naatiq v Nabeeh [2024] DIFC ARB 018?

The full text of the order is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0182024-naatiq-v-nabeeh

Cases referred to in this judgment:

Legislation referenced:

• Decree No. (29) of 2024 Concerning the Judicial Committee for Resolving Conflicts of Jurisdiction between the DIFC Courts and Judicial Entities in the Emirate of Dubai (Article 7)
• Arbitration Law 2008 (Article 41)
• Rules of the DIFC Courts (RDC 45)