NASHRAH v NAJEM [2025] DIFC ARB 005 — The Limits of Anti-Suit Injunctions in the Shadow of Redundant Arbitration Rules (19 February 2025)

How did the DIFC Court address the dispute between Nashrah and Najem regarding the validity of an arbitration agreement citing redundant DIFC-LCIA rules?

The lawsuit centers on a jurisdictional conflict arising from a Repatriation Agreement containing an arbitration clause that originally designated the DIFC-LCIA rules with the seat in "Dubai." Following the dissolution of the DIFC-LCIA, the Defendants initiated proceedings in the English High Court, arguing that the arbitration agreement was void due to the redundancy of the specified rules. In response, the Claimant initiated arbitration under the DIAC Rules and sought an anti-suit injunction (ASI) from the DIFC Court to restrain the Defendants from pursuing anti-arbitration injunctions in the English courts.

The core of the dispute involves the transition of legacy arbitration agreements into the current DIAC regime. The Claimant argued that the agreement remained binding despite the administrative changes. As noted in the court's findings:

Decree 34 dictates that DIFC-LCIA arbitrations are now conducted under the DIAC Rules; on 24 December 2024 DIAC accepted jurisdiction on a prima facie basis post initiation by the Claimant. 68.

The Claimant further asserted that the Defendants' attempt to characterize the agreement as void was a tactical maneuver to bypass the agreed-upon arbitral forum. The court ultimately rejected the Defendants' attempt to discharge the ASI, emphasizing that the shift in institutional administration did not invalidate the parties' underlying consent to arbitrate.

Which judge presided over the Nashrah v Najem [2025] DIFC ARB 005 proceedings in the Arbitration Division?

The matter was heard before H.E. Justice Shamlan Al Sawalehi in the DIFC Court of First Instance (Arbitration Division). The initial urgent ex parte hearing took place on 20 January 2025, with the return date hearing held on 5 February 2025. The written reasons for the order were subsequently issued on 19 February 2025.

What specific legal arguments did the parties advance regarding the validity of the arbitration agreement and the duty of disclosure?

The Defendants sought to discharge the ASI, arguing that the Claimant had breached its duty of "full and frank disclosure" under RDC 25.25 (referenced as RDC 23.11 in the judgment). They contended that the Claimant misled the court during the ex parte hearing by mischaracterizing the nature of the relief sought by the Defendants in the English High Court, specifically regarding whether the English proceedings sought a permanent or interim injunction.

Conversely, the Claimant argued that the arbitration agreement remained robust. They maintained that the transition from DIFC-LCIA to DIAC was a procedural evolution rather than a substantive invalidation of the contract. Regarding the disclosure allegations, the Claimant asserted that their representations were accurate reflections of the risk posed by the English proceedings. As the court observed:

Next, it is the Claimant’s position that a valid, effective and binding arbitration agreement exists, as the Defendants’ claim that all arbitration agreements that cite the DIFC-LCIA rules are invalid is baseless. 67.

The Claimant further argued that the English High Court proceedings were an attempt to circumvent the kompetenz-kompetenz principle, which should properly be determined by the arbitral tribunal.

What was the precise doctrinal issue the court had to answer regarding its supportive jurisdiction to grant an anti-suit injunction?

The court was required to determine whether it possessed the jurisdictional authority to grant an anti-suit injunction to protect an arbitration agreement when the seat of arbitration was not definitively established as the DIFC, and where the underlying arbitration rules were in a state of transition. The doctrinal challenge lay in balancing the court's supportive role under the DIFC Arbitration Law against the principles of international comity, particularly when parallel proceedings were active in the English High Court. The court had to decide if Article 32 of the Court Law provided a sufficient nexus to intervene, even in the absence of a clear DIFC seat, to prevent the frustration of the arbitration agreement.

How did Justice Shamlan Al Sawalehi apply the test for supportive jurisdiction in the context of the anti-suit injunction?

Justice Al Sawalehi applied a test focused on the court's inherent power to protect the integrity of arbitration agreements. He found that the court's authority was not strictly limited to cases where the DIFC was the seat, but extended to general supportive measures. The judge emphasized that the court would not allow the transition from DIFC-LCIA to DIAC to be used as a tool to invalidate otherwise valid agreements.

I accept that the source of this Court’s supportive jurisdiction to grant the ASI stems from Article 32 of the Court Law, as this is a general interim relief not necessarily restricted to arbitration

The court also addressed the validity of the agreement directly, noting that the institutional change did not undermine the parties' intent.

I am also satisfied that a valid arbitration agreement exists between the parties. DIAC accepted jurisdiction on a prima-facie basis and registered the arbitration initiated by the Claimant, and so I see no reason why the DIFC Court would act contrary to this decision; nonetheless, the move from DIFC-LCIA to DIAC would not render DIFC-LCIA agreement invalid, but merely linguistically outdated. 67.

Which specific DIFC statutes and RDC rules were applied by the court to resolve the jurisdictional challenge?

The court relied heavily on Article 32 of the DIFC Court Law, which provides the court with broad powers to grant interim relief. Additionally, the court considered Article 13 of the Application of DIFC Law, read in conjunction with Article 5(A)(1)(E) of the Judicial Authority Law (JAL), to establish its supportive jurisdiction. Regarding the Defendants' procedural challenge, the court applied RDC 23.11 (the duty of full and frank disclosure), which requires parties to disclose all material facts and potential defenses during ex parte applications. The court also referenced Article 12(2) and Article 24(b)(iii) of the DIFC Arbitration Law in the context of the arbitration agreement's validity.

How did the court utilize the cited precedents, including UniCredit Bank GmbH v. RusChemAlliance, in its reasoning?

The court utilized UniCredit Bank GmbH v. RusChemAlliance [2024] UKSC 30 to navigate the complexities of anti-suit injunctions in the context of international arbitration. The court also drew upon its own jurisprudence, specifically [2016] DIFC ARB 010, to reaffirm that the source of the DIFC Courts' power to grant injunctions is firmly rooted in Article 32 of the Court Law. Furthermore, the court distinguished this case from [2016] DIFC CFI 020, which suggested that ASIs are only granted in "unusual and exceptional circumstances" when the DIFC is not the seat, by finding that the current circumstances—specifically the risk of the English court foreclosing the arbitral process—met that high threshold.

What was the final outcome of the application and the specific orders made by the court?

The court dismissed the Defendants' application to discharge the anti-suit injunction. Justice Al Sawalehi ordered that the injunction remain in force, effectively restraining the Defendants from initiating or continuing proceedings in the United Kingdom or any other jurisdiction outside the DIFC that would interfere with the arbitration. The court found that the Claimant had not breached its duty of disclosure and that the arbitration agreement was valid and binding. The Defendants' request for damages and indemnity costs was denied.

What are the practical implications of this ruling for practitioners dealing with legacy arbitration agreements?

This judgment reinforces the DIFC Court's proactive stance in protecting arbitration agreements. Practitioners must anticipate that the DIFC Court will exercise its supportive jurisdiction under Article 32 of the Court Law even when the seat is not clearly defined as the DIFC. The decision serves as a warning that attempts to use the "redundancy" of DIFC-LCIA rules as a basis to void arbitration agreements will likely fail. For further analysis on how this case interacts with the broader landscape of anti-suit injunctions, see the deep editorial analysis at: Nashrah v Najem [2025] DIFC ARB 005: The Limits of Anti-Suit Injunctions in the Shadow of Redundant Arbitration Rules.

Where can I read the full judgment in Nashrah v Najem [2025] DIFC ARB 005?

The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/arbitration/arb-0052025-nashrah-v-1-najem-2-nex-3 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/arb-0052025-nashrah-v-1-najem-2-nex-3.txt.

Cases referred to in this judgment:

Legislation referenced:

• DIFC Arbitration Law Article 12(2)
• DIFC Arbitration Law Article 24(b)(iii)
• DIFC Court Law Article 22(2)
• DIFC Court Law Article 32
• Application of DIFC Law Article 8A
• Application of DIFC Law Article 10
• RDC 25.25 (referenced as RDC 23.11)