On 7 September 2015, Deputy Chief Justice Sir John Chadwick sat in the DIFC Court of First Instance to address an enforcement application that had reached a procedural impasse. The Claimants, Fabiola and Fairuza, sought to recover AED 36,496,744 from Faddey LLC and Fai Properties PJSC, yet the underlying arbitral award remained silent on the nature of the defendants' liability. Faced with a parallel annulment action in the Dubai Civil Courts, Sir John Chadwick declined to force an immediate enforcement, opting instead to stay the proceedings under Article 44(2) of the DIFC Arbitration Law.
For cross-border litigators and arbitration counsel, this decision serves as a foundational lesson in the strategic interplay between the DIFC Courts and the Dubai Civil Courts. The ruling underscores that while the DIFC is a pro-enforcement jurisdiction, it will not bypass the fundamental requirement of legal certainty—specifically regarding joint and several liability—simply to expedite recovery. By refusing to enforce an ambiguous award while annulment proceedings were pending, the Court established a high-water mark for judicial restraint, ensuring that the DIFC’s supportive role does not inadvertently undermine the integrity of the arbitral process.
How Did the Dispute Between Fabiola and Faddey Arise?
The procedural history of the dispute exposes a critical vulnerability in international commercial arbitration: the profound jurisdictional and enforcement complications that arise when an arbitral tribunal issues an award that fails to clearly delineate the liability of multiple respondents. On its face, the enforcement action brought before the Dubai International Financial Centre (DIFC) Court of First Instance appeared straightforward. The claimants, Fabiola and Fairuza, had successfully navigated a DIAC arbitration (Claim No. 34/2013) and secured a final award dated 26 February 2015, subsequently amended by a supplemental award on 11 April 2015. Seeking to monetize their victory, the claimants turned to the DIFC Courts, relying on the jurisdiction’s robust enforcement framework under Article 42(1) of the DIFC Arbitration Law (Law No. 1 of 2008).
The mechanics of the claimants' initial filing were standard for cross-border asset recovery within the Emirate. As noted in the judgment, the proceedings ARB-001-2015 were commenced by the issue of a Claim Form on 30 April 2015. However, the specific relief demanded by Fabiola and Fairuza immediately highlighted the structural defect in the underlying arbitral award. Deputy Chief Justice Sir John Chadwick summarized the claimants' aggressive enforcement posture:
The relief sought in the proceedings was recognition and enforcement of the Arbitration Award and, in particular, an order for payment by Faddey and Fai (together “the Defendants”) within 14 days of the sums (in aggregate some AED 36,496,744) set out in paragraph 469, chapter 9, of the final Award by the Defendants on a joint and several basis.
The fatal flaw in the claimants' demand for joint and several liability was that the arbitral tribunal had never explicitly ordered it. The award mandated the payment of over AED 36 million, but it remained entirely silent on how that massive financial burden was to be apportioned between Faddey LLC and Fai Properties PJSC. In commercial litigation, the distinction between joint liability, several liability, and joint and several liability is not a mere semantic quibble; it dictates the fundamental mechanics of execution, asset tracing, and the right of contribution between co-defendants. By asking the DIFC Court to enforce the award on a "joint and several basis," the claimants were effectively asking the enforcing judge to read substantive legal obligations into the award that the arbitrators had omitted.
This omission was particularly problematic given the underlying contractual matrix. The dispute stemmed from a Sale Agreement where the obligations of the respective corporate entities were distinct. The tribunal's failure to parse these distinct corporate roles created an enforcement vacuum. Sir John Chadwick identified the specific contractual ambiguity regarding property ownership, noting that the person having the freehold title to the property was Fai and not Faddey. Because Fai Properties PJSC held the actual title, treating Faddey LLC as jointly and severally liable for the entirety of the AED 36 million judgment without explicit arbitral reasoning bordered on judicial overreach. The Deputy Chief Justice articulated the severity of the tribunal's drafting failure:
There are, in my view, real problems with the Award as it stands. As I have said, the first problem is whether there are indeed two parties who are liable for the obligations arising under the Sale Agreement.
Faced with an award that was arguably defective on its face, the defendants did not merely resist enforcement in the DIFC; they launched a preemptive strike at the seat of the arbitration. Proceedings to annul the Award were commenced in the Civil Courts of Dubai on 31 May 2015. The annulment action was grounded in strict procedural compliance requirements under onshore UAE law, specifically targeting the tribunal's failure to provide adequate reasoning for its liability determinations. Sir John Chadwick documented the statutory basis for the defendants' onshore challenge:
In those proceedings (“the annulment proceedings”) the Defendants rely on Article 216 in Chapter III (“Arbitration) of the UAE Civil Procedures Law (Federal Law No. 11 of 1992).
The defendants argued that Article 216 must be read in conjunction with Article 212 of the UAE Civil Procedures Law, which mandates that an arbitral award must include the reasons for the decision. A failure to specify whether two distinct corporate entities are jointly or severally liable for a multi-million dirham judgment arguably constitutes a failure to provide reasons, rendering the award susceptible to nullification by the supervisory courts.
Armed with the pending annulment action in the Dubai Civil Courts, the defendants pivoted back to the DIFC to halt the enforcement machinery. Through an application, made on 15 June 2015 by Faddey LLC, the defendants sought an order under Rules 12.1(1) and 12.1(2) of the DIFC Courts Rules declaring that the DIFC Court had no jurisdiction to enforce the award, or alternatively, an order under Article 44(2) of the DIFC Arbitration Law to stay the proceedings pending the outcome of the onshore annulment.
The jurisdictional dilemma presented to the DIFC Court of First Instance required a delicate balancing act. The DIFC Courts have historically championed a fiercely pro-enforcement doctrine, often refusing to allow parallel onshore annulment proceedings to derail the recognition of valid arbitral awards. In landmark rulings such as ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC , the DIFC Court established its willingness to act as a conduit jurisdiction, enforcing awards even when the assets and parties were located onshore. Similarly, in ARB-005-2014 Eava v Egan [2014] ARB 005, the Court demonstrated deep skepticism toward defendants who initiate parallel annulment challenges merely as tactical delay mechanisms.
However, Fabiola v Faddey presented a fundamentally different fact pattern. The defect was not a contrived procedural grievance invented by a recalcitrant debtor; the defect was baked into the dispositive text of the award itself. If the DIFC Court were to enforce the award, it would be forced to invent the terms of liability, thereby usurping the role of the arbitral tribunal. Sir John Chadwick recognized the danger of crossing the line from judicial enforcement into judicial rewriting:
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
To resolve the impasse, the Court turned to the discretionary powers embedded in Article 44(2) of the DIFC Arbitration Law. The statute provides that if an application for setting aside an award has been made to a competent court at the seat, the DIFC Court may adjourn its decision and may also, on the application of the party seeking recognition or enforcement, order the provision of appropriate security. The exercise of this discretion hinges on the bona fides of the annulment challenge. Unlike the tactical delays frequently observed in cross-border enforcement battles, the Deputy Chief Justice found the defendants' onshore challenge to be entirely legitimate, rooted in the tribunal's undeniable failure to articulate the mechanics of the AED 36 million liability.
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
By acknowledging the bona fide nature of the annulment proceedings, the DIFC Court signaled that its pro-arbitration mandate does not extend to blindly enforcing incoherent awards. The integrity of the arbitral process requires that tribunals draft awards capable of execution without requiring the enforcing judge to guess at the arbitrators' intent. Sir John Chadwick concluded that the most jurisprudentially sound approach was to defer to the supervisory jurisdiction of the Dubai Civil Courts, allowing them to determine whether the award was a nullity or whether it could be cured through a remission process.
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
The resulting stay of enforcement proceedings underscores a vital lesson for arbitration practitioners operating within the UAE. Securing a multi-million dirham damages figure is only half the battle; if the tribunal fails to explicitly define the architecture of liability among multiple respondents, the resulting award may prove practically unenforceable. The DIFC Courts will aggressively protect their enforcement jurisdiction against frivolous challenges, but they will not cure substantive drafting failures that properly belong before the supervisory courts of the seat.
What Was at Stake When the Claim Was Filed?
When Fabiola and Fairuza approached the DIFC Court of First Instance on 30 April 2015, their objective was unambiguous: the immediate transformation of a DIAC arbitral award into an executable judicial order. The claimants sought to leverage the DIFC’s well-established pro-enforcement architecture to compel payment from Faddey LLC and Fai Properties PJSC. The mechanics of their application underscored a reliance on the summary nature of enforcement proceedings, a regime designed to bypass protracted litigation and deliver swift commercial finality.
The financial stakes were substantial, but the procedural demands were equally aggressive. The claimants did not merely ask for recognition; they demanded a highly compressed timeline for compliance, pushing the boundaries of what the enforcement mechanism is designed to facilitate without substantive review. As Deputy Chief Justice Sir John Chadwick observed regarding the initial filing:
The relief sought in the proceedings was recognition and enforcement of the Arbitration Award and, in particular, an order for payment by Faddey and Fai (together “the Defendants”) within 14 days of the sums (in aggregate some AED 36,496,744) set out in paragraph 469, chapter 9, of the final Award by the Defendants on a joint and several basis.
This demand for a 14-day turnaround on a multi-million dirham liability illustrates the inherent tension at the heart of the case. On one side of the ledger sat the claimants, armed with an arbitral award and invoking the mandatory language of Article 42(1) of the DIFC Arbitration Law, which dictates that the court must recognise and enforce awards irrespective of their origin. This expectation of rapid execution aligns with the broader jurisdictional posture seen in cases like ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC , where the DIFC Courts have historically acted as a robust conduit for arbitral finality.
However, the defendants’ resistance introduced a critical complication that fractured the claimants' narrative of a straightforward, summary execution. Faddey and Fai did not merely deploy standard delay tactics; they attacked the structural integrity of the award itself. On 31 May 2015, annulment proceedings were commenced in the Civil Courts of Dubai, shifting the battleground and forcing the DIFC Court to confront the substantive deficiencies of the arbitral tribunal's drafting. The defendants sought to halt the DIFC enforcement entirely, presenting the court with a formal application to either decline jurisdiction or suspend the process:
(b) in the alternative, an order pursuant to Article 44(2) of the DIFC Arbitration Law or Rule 4.2(6) of the DIFC Courts Rules that the enforcement proceedings be adjourned or stayed pending the final determination of the annulment proceedings with respect to the Award commenced by the Defendants in the Courts of Dubai on 31 May 2015.
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The core of the defendants' argument rested on a fundamental ambiguity within the award. While the tribunal had quantified the damages at AED 36,496,744, it had failed to articulate the precise nature of the liability shared by Faddey and Fai. The claimants asserted that the liability was joint and several, yet the award itself was silent on this critical distinction. In commercial enforcement, the difference between joint, several, and joint and several liability is not a mere academic technicality; it dictates how a bailiff executes the judgment against the respective assets of the corporate entities.
This silence rendered the award practically unworkable as an executable instrument. The defendants argued that under UAE law, specifically Article 212 of the Civil Procedures Law, the award of the arbitrators must include the reasons for the decision. A failure to specify the basis of liability across multiple respondents arguably rendered the award a nullity. Sir John Chadwick acknowledged the severity of this drafting failure, noting the practical impossibility of enforcing an instrument that lacked basic substantive clarity:
There are, in my view, real problems with the Award as it stands. As I have said, the first problem is whether there are indeed two parties who are liable for the obligations arising under the Sale Agreement.
The court was thus forced into a binary choice: blindly enforce an ambiguous award in the name of pro-arbitration efficiency, or risk procedural injustice by ordering execution against parties whose specific legal obligations remained undefined. The claimants' push for summary enforcement collided directly with the court's duty to ensure that its orders are legally coherent and practically executable. The underlying contract further complicated matters, as the obligation to transfer free and unencumbered freehold title of the site rested solely with Fai, raising legitimate questions about why Faddey should bear joint and several liability for a breach it arguably could not commit.
Faced with this substantive void, the court had to navigate the statutory framework governing parallel proceedings. While Article 42 mandates enforcement, the power of the Court to refuse to recognise and enforce is preserved under Article 44. Specifically, Article 44(2) grants the court discretion to adjourn its decision and may also order security if an annulment application is pending in the seat of arbitration. The claimants argued against a stay, likely relying on the precedent that parallel annulment actions should not automatically derail DIFC enforcement, a principle explored in ARB-005-2014 Eava v Egan [2014] ARB 005, where the court heavily scrutinized delay tactics.
However, Sir John Chadwick distinguished the present scenario from mere tactical obstruction. The ambiguity regarding liability was a genuine, structural defect that required resolution before the coercive powers of the state could be deployed. The court refused to act as a blind mechanism for execution when the underlying instrument was fundamentally flawed:
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
The Deputy Chief Justice's analysis required an assessment of the defendants' motives in the Dubai Civil Courts. If the annulment action was a mere facade designed to frustrate the claimants' 14-day demand, the DIFC Court might have pressed forward with enforcement, perhaps requiring security. Yet, the glaring omissions in the arbitral tribunal's reasoning provided the defendants with a highly credible basis for challenge. The court concluded that the parallel proceedings were not an abuse of process, but a necessary step to cure or annul a defective award:
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
This determination shifted the balance entirely. The summary nature of enforcement proceedings is predicated on the assumption that the arbitral tribunal has delivered a complete, coherent, and final resolution of the dispute. When that assumption fails—when the award leaves critical questions of liability unanswered—the summary mechanism must yield. The DIFC Court's jurisdiction to enforce is broad, but it is not absolute, and it must be exercised in a manner that avoids procedural absurdity.
Rather than dismissing the enforcement claim outright, which would have severely prejudiced the claimants if the Dubai Civil Courts ultimately upheld the award, Sir John Chadwick opted for a pragmatic middle ground. He utilized the discretion afforded by Article 44(2) to pause the DIFC proceedings, preserving the claimants' jurisdictional foothold while allowing the substantive defects to be addressed by the supervisory courts at the seat. This approach prevented the immediate injustice of enforcing an ambiguous liability while respecting the hierarchy of review:
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
Ultimately, what was at stake when Fabiola and Fairuza filed their claim was the boundary line between pro-enforcement efficiency and fundamental legal clarity. The claimants pushed for a system that prioritized speed, demanding AED 36.4 million within a fortnight based on a document that failed to explain who owed what. The court's refusal to accommodate this demand reinforces a critical doctrinal boundary: the DIFC Courts will robustly support arbitration, but they will not lend their coercive enforcement powers to arbitral awards that fail to articulate the basic mechanics of the liability they purport to impose.
How Did the Case Move From Application to the Stay Order?
The procedural trajectory of Fabiola v Faddey reveals a deliberate judicial strategy to avoid premature adjudication when an arbitral award suffers from fundamental internal ambiguities. The dispute entered the Dubai International Financial Centre (DIFC) Courts when the claimants, Fabiola and Fairuza, sought to leverage the jurisdiction's pro-enforcement framework. The action was commenced by the issue of a Claim Form on 30 April 2015, with the claimants demanding immediate recognition of a DIAC arbitral award. Specifically, they sought an order compelling payment by Faddey and Fai (together “the Defendants”) within 14 days of a sum totalling AED 36,496,744.
Faced with the imminent threat of execution against their assets, the defendants executed a dual-track defensive strategy. First, they attacked the award at the seat of arbitration. Formal proceedings to annul the Award were commenced in the Civil Courts of Dubai on 31 May 2015. Second, having established a parallel challenge onshore, the defendants returned to the DIFC Court of First Instance on 15 June 2015 to halt the enforcement mechanism. They filed an application seeking either a complete dismissal of the enforcement action on jurisdictional grounds or, alternatively, a procedural pause. The specific relief requested was:
The legal battleground was thus defined by the tension between Article 42(1) of the DIFC Arbitration Law (Law No. 1 of 2008), which mandates the recognition of arbitral awards, and the discretionary exceptions housed within Article 44 of the Arbitration Law. Article 44(2) explicitly permits the DIFC Courts to adjourn enforcement decisions if an application for setting aside the award has been made to a competent court at the seat. Deputy Chief Justice Sir John Chadwick approached this statutory discretion not as a rigid checklist, but as a flexible tool designed to maintain international arbitral comity. He noted the broad nature of this power:
In my judgment, it would be wrong to read a fetter into this understandably wide discretion (echoing, as it does, Art. VI of the New York Convention).
The central dilemma for the DIFC Court was not merely the existence of parallel proceedings, but the substantive quality of the underlying award. The tribunal had ordered the defendants to pay the multi-million dirham sum, but the award was entirely silent on whether Faddey LLC and Fai Properties PJSC were liable on a joint, several, or joint and several basis. This was not a minor typographical omission; it went to the heart of how the judgment could be executed. If the DIFC Court were to issue an enforcement order, it would be forced to interpret—and potentially rewrite—the tribunal's intent regarding the apportionment of liability. Sir John Chadwick identified this as a critical barrier to immediate enforcement:
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
The factual matrix further complicated any attempt by the DIFC Court to simply infer joint and several liability. The underlying dispute stemmed from a Sale Agreement where the obligations of the vendor were inextricably linked to the ownership of the property. The court observed that the contractual language pointed to Fai Properties PJSC as the vendor, given that it was common ground that Fai held the freehold title to the site, not Faddey LLC. Enforcing a joint and several liability order against Faddey LLC for obligations that seemingly belonged exclusively to the titleholder would risk enforcing a fundamentally flawed legal premise.
Because of these glaring ambiguities, the defendants' onshore annulment action was not viewed by the DIFC Court as a mere dilatory tactic. In the Dubai Civil Courts, the defendants chose to rely on Article 216 in Chapter III of the UAE Civil Procedures Law (Federal Law No. 11 of 1992), arguing that the award lacked the mandatory reasoning required by Article 212 of the same law. The DIFC Court had to evaluate the credibility of this onshore challenge before granting a stay. In many enforcement scenarios, such as those seen in ARB-005-2014 Eava v Egan [2014] ARB 005, the DIFC Courts have shown a low tolerance for parallel annulment actions that are clearly designed to frustrate the swift execution of an award. However, the profound silence of the Fabiola award regarding the nature of liability provided the defendants with a highly credible basis for annulment. Sir John Chadwick explicitly validated the legitimacy of the defendants' onshore strategy:
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
Having established that the annulment proceedings were bona fide and that the award itself was problematic, the court faced a tactical choice: should it dismiss the enforcement application entirely for lack of jurisdiction, or merely stay the proceedings? Dismissal would force the claimants to start the enforcement process from scratch if the Dubai Civil Courts ultimately upheld the award. A stay, conversely, would preserve the claimants' position in the DIFC while allowing the seat court to resolve the substantive defects.
The decision to stay rather than dismiss aligns with the broader DIFC philosophy of acting as a supportive conduit jurisdiction, a principle heavily litigated in cases like ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC . By staying the action, the DIFC Court respected the primary supervisory authority of the onshore Dubai courts without permanently closing its own doors to the claimants. Sir John Chadwick articulated this cautious, deferential approach:
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
This reasoning underscores a sophisticated use of procedural discretion. The DIFC Court recognised that forcing an immediate adjudication on enforcement would require it to answer questions that properly belonged to the arbitral tribunal or the supervisory court at the seat. If the Dubai Civil Court were to annul the award, the DIFC enforcement action would naturally fall away. If the Dubai Civil Court were to remit the award to the tribunal for clarification on the joint versus several liability issue, the DIFC Court would eventually receive an enforceable, unambiguous instrument.
Ultimately, the procedural history from the initial 30 April filing to the September hearing culminated in a decisive use of Article 44(2). The court refused to be rushed into enforcing a defective award, nor would it prematurely strip the claimants of their right to seek enforcement in the future. The final disposition perfectly encapsulated this balancing act:
Through this sequence of procedural evaluations, the DIFC Court of First Instance demonstrated that while it remains a robust jurisdiction for the enforcement of arbitral awards, it will not blindly execute instruments that lack fundamental clarity. The stay order was not a denial of justice, but a necessary procedural mechanism to ensure that any eventual enforcement would be based on a legally coherent and fully reasoned arbitral decision.
What Is the Article 44(2) Discretionary Power and Why Does It Matter?
The architecture of the DIFC Arbitration Law (Law No. 1 of 2008) is fundamentally pro-enforcement, designed to integrate seamlessly with international arbitral norms. At the heart of this framework lies a deliberate statutory tension between the mandate to enforce and the necessity of judicial prudence. Article 42(1) of the DIFC Arbitration Law establishes a strict obligation on the DIFC Courts to recognise and enforce arbitral awards, irrespective of the jurisdiction in which they were made. However, this obligation is not absolute. When an award is subject to an active annulment challenge at the seat of arbitration, the DIFC Courts must navigate the delicate boundary between upholding arbitral finality and avoiding the creation of conflicting judicial mandates.
This is where Article 44(2) operates as a vital safety valve. The provision grants the court the authority to adjourn its decision and may also order the provision of appropriate security if an application for setting aside the award has been made to a competent court. In Fabiola v Faddey [2015] DIFC ARB 001, Deputy Chief Justice Sir John Chadwick was tasked with defining the contours of this discretionary power in a scenario where the underlying award was not merely under challenge, but arguably defective on its face.
The claimants, Fabiola and Fairuza, had initiated proceedings seeking the recognition and enforcement of the Arbitration Award, demanding payment of AED 36,496,744 from the defendants, Faddey LLC and Fai Properties PJSC. The claimants sought this sum on a joint and several basis. The critical flaw, however, was that the arbitral tribunal had remained entirely silent on the nature of the defendants' liability. The award did not specify whether Faddey and Fai were jointly liable, severally liable, or jointly and severally liable for the multi-million dirham debt.
Simultaneously, the defendants had launched an aggressive defensive maneuver onshore. They commenced annulment proceedings in the Civil Courts of Dubai on 31 May 2015, relying specifically on Article 216 in Chapter III of the UAE Civil Procedures Law (Federal Law No. 11 of 1992). The defendants argued that the award's failure to articulate the basis of liability rendered it fundamentally flawed and susceptible to nullification by the supervisory courts.
Faced with this dual-track litigation, Sir John Chadwick had to determine whether to force immediate enforcement in the DIFC or to pause the machinery of justice pending the onshore court's ruling. The analytical framework for granting a stay under Article 44(2) requires a careful balancing act. The court must ensure that the annulment proceedings are not merely a tactical delay mechanism designed to frustrate a victorious claimant. The test demands that the challenge at the seat be bona fide and possess a realistic prospect of success.
Evaluating the defendants' onshore challenge, Sir John Chadwick found that the ambiguity regarding joint and several liability was a substantive defect that merited serious judicial scrutiny by the supervisory court. The annulment action was not a frivolous stalling tactic but a legitimate exercise of the defendants' procedural rights. He articulated this finding with precise clarity:
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
By confirming the bona fide nature of the onshore challenge, the Deputy Chief Justice established the foundational prerequisite for exercising the Article 44(2) discretion. However, the existence of a valid challenge does not automatically dictate a stay. The DIFC Courts possess a wide, equitable discretion to manage their own proceedings. Counsel for the claimants argued for a narrow interpretation of the court's power to stay, suggesting that the pro-enforcement bias of the DIFC Arbitration Law should compel immediate recognition unless the award had already been formally suspended by the seat.
Sir John Chadwick firmly rejected this restrictive approach. He situated Article 44(2) within the broader context of international arbitration law, specifically drawing parallels to the New York Convention. The power to stay is an inherent aspect of judicial coordination, designed to prevent the absurdity of enforcing an award in one jurisdiction only to have it nullified in another weeks later. The court avoids reading unnecessary restrictions into its wide discretionary powers, preserving its ability to respond to the unique procedural postures of complex cross-border disputes:
In my judgment, it would be wrong to read a fetter into this understandably wide discretion (echoing, as it does, Art. VI of the New York Convention).
This refusal to fetter the court's discretion is a hallmark of DIFC jurisprudence. It aligns with the broader strategic positioning of the DIFC Courts as a sophisticated, arbitration-friendly forum that respects the supervisory jurisdiction of other courts. The approach taken in Fabiola v Faddey stands in nuanced contrast to cases where the DIFC Courts have aggressively pushed forward with enforcement despite parallel challenges. For instance, in ARB-005-2014 Eava v Egan [2014] ARB 005, the court demonstrated a willingness to pierce through transparent delay tactics, refusing to grant a stay when the external annulment proceedings lacked substantive merit. The critical differentiator in Fabiola was the genuine, structural ambiguity of the award itself.
The practical impossibility of enforcing an award that fails to define the parameters of liability weighed heavily on the court's analysis. If the DIFC Court were to issue an execution order for AED 36.4 million, the enforcement officers would require exact instructions on how to apportion the seizure of assets between Faddey LLC and Fai Properties PJSC. Without a clear mandate from the arbitral tribunal regarding joint or several liability, any enforcement action would require the DIFC Court to effectively rewrite the award or make substantive determinations of liability that the arbitrators had omitted.
Sir John Chadwick recognised that stepping into the shoes of the arbitrators to cure a defective award would be a profound overreach of the enforcing court's jurisdiction. The proper forum for resolving such fundamental ambiguities is the supervisory court at the seat, or the arbitral tribunal itself via a remission process. The Article 44(2) stay acts as a mechanism for judicial restraint, allowing the appropriate authorities to clarify the legal obligations before the coercive power of the state is deployed. The Deputy Chief Justice articulated this principle of restraint, noting the inherent dangers of premature enforcement:
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
This cautious, coordinated approach reinforces the DIFC's reputation as a mature jurisdiction. While the DIFC Courts have frequently been utilised as a conduit jurisdiction for the enforcement of onshore Dubai awards—a strategy famously cemented in ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC —the Fabiola ruling demonstrates that the conduit is not a blind pipeline. The court will not act as a rubber stamp for awards that suffer from severe structural defects, particularly when those defects are the subject of active, good-faith litigation before the competent supervisory courts.
The Article 44(2) discretionary power, therefore, matters immensely because it preserves the systemic integrity of the arbitral process. It allows the DIFC Courts to support arbitration by refusing to enforce unworkable awards prematurely, thereby avoiding the creation of conflicting judgments and the ensuing chaos in asset execution. By staying the proceedings, Sir John Chadwick ensured that the ultimate enforcement of the AED 36.4 million debt would only proceed once the Dubai Civil Courts had definitively resolved the question of nullity, or until the tribunal had clarified the precise nature of the defendants' liability. The stay is not a denial of justice, but a necessary pause to ensure that when justice is finally executed, it rests on a legally sound and unambiguous foundation.
How Did Justice Sir John Chadwick Reach the Decision?
When Deputy Chief Justice Sir John Chadwick examined the enforcement application in Fabiola v Faddey, he was confronted with a fundamental tension that strikes at the heart of international arbitration: the competing imperatives of enforcing an arbitral award swiftly versus ensuring that the award itself is legally coherent. The Claimants, Fabiola and Fairuza, approached the DIFC Court of First Instance seeking immediate recognition and enforcement of the Arbitration Award, demanding that Faddey LLC and Fai Properties PJSC pay an aggregate sum of AED 36,496,744. Crucially, the Claimants insisted that this liability should be enforced on a joint and several basis.
However, the underlying arbitral award contained a glaring omission: it was entirely silent on the nature of the Defendants' liability. The tribunal had ordered the payment but failed to specify whether Faddey LLC and Fai Properties PJSC were liable jointly, severally, or jointly and severally. Faced with this ambiguity, and with parallel annulment proceedings already underway in the Dubai Civil Courts, Sir John Chadwick had to determine whether the DIFC Court should aggressively cure the tribunal’s drafting defect to facilitate enforcement, or whether it should step back and allow the supervisory courts to address the award's fundamental flaws. He chose the latter, prioritizing the integrity of the arbitral process over the immediate satisfaction of the award.
The Defendants’ primary defensive maneuver was to seek an order under Article 44(2) of the DIFC Arbitration Law to adjourn or stay the enforcement proceedings pending the outcome of their annulment action in onshore Dubai. Article 44(2), which mirrors the discretionary stay provisions of the New York Convention, allows the DIFC Court to pause enforcement if a competent supervisory court is actively considering setting the award aside. For the Claimants, this was characterized as a classic delay tactic—an attempt by the judgment debtors to relitigate the merits and frustrate a binding DIAC award.
Sir John Chadwick, however, looked past the procedural posturing and examined the substantive text of the award itself. What he found was not merely a technical oversight, but a substantive vacuum that made immediate enforcement practically impossible without the Court overstepping its jurisdictional boundaries. The judge identified profound structural defects in how the tribunal had allocated responsibility between the two corporate defendants.
There are, in my view, real problems with the Award as it stands. As I have said, the first problem is whether there are indeed two parties who are liable for the obligations arising under the Sale Agreement.
The root of this "real problem" lay in the underlying commercial documentation. The dispute stemmed from a Sale Agreement, which contained specific provisions regarding the transfer of property. The judge noted that under Clause 3.1 of the agreement, the obligation was clear: The Vendor shall transfer free and unencumbered freehold title of the site to the purchaser. It was common ground between the parties that the entity holding the freehold title was Fai Properties PJSC, not Faddey LLC. Despite this clear contractual distinction, the arbitral tribunal had issued a blanket monetary award against both entities without articulating the legal basis for Faddey LLC's liability, nor whether Faddey was expected to shoulder the entire AED 36.4 million burden alongside Fai Properties.
In the realm of commercial enforcement, the distinction between joint and several liability is not a mere academic footnote; it dictates the entire strategy of asset recovery. If liability is joint and several, the Claimants could execute the entire AED 36.4 million against whichever defendant had the most accessible assets. By asking the DIFC Court to enforce the award on a joint and several basis, the Claimants were effectively asking Sir John Chadwick to read substantive legal conclusions into the award that the arbitrators had failed to write.
The judge firmly rejected this invitation to rewrite the tribunal's decision. To do so would transform the DIFC Court from an enforcing court into a primary adjudicator, violating the fundamental principle of arbitral autonomy.
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
This refusal to speculate on the tribunal's intent marks a critical juncture in DIFC enforcement jurisprudence. While the DIFC Courts have historically championed a pro-enforcement philosophy—most notably establishing their role as a conduit jurisdiction in ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC —that philosophy is predicated on the existence of a clear, unambiguous, and final award. When an award is fundamentally defective, the pro-enforcement bias must yield to the procedural integrity of the system.
The Defendants' parallel annulment action in the Dubai Civil Courts provided the necessary procedural mechanism to resolve this impasse. The Defendants had initiated those proceedings relying on Article 216 in Chapter III of the UAE Civil Procedures Law, arguing that the award lacked the mandatory reasoning required by UAE law. Given the glaring silence on the nature of liability, Sir John Chadwick found that the onshore annulment challenge was not a frivolous delay tactic, but a substantive legal challenge with a realistic prospect of success.
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
This assessment distinguishes Fabiola v Faddey from other DIFC cases where parallel proceedings were deemed abusive. For instance, in ARB-005-2014 Eava v Egan [2014] ARB 005, the DIFC Court demonstrated its willingness to push forward with enforcement when onshore challenges appeared purely dilatory. Here, however, the internal contradictions of the award itself validated the Defendants' decision to seek annulment at the seat of arbitration. The judge recognized that the Dubai Civil Courts, acting as the supervisory courts of the onshore-seated arbitration, were the appropriate forum to determine whether the award's failure to specify liability rendered it a nullity.
Having established that the award was problematic and the annulment proceedings were bona fide, Sir John Chadwick turned to the mechanics of the stay. He noted that the discretion afforded under Article 44(2) is broad and should not be artificially constrained.
In my judgment, it would be wrong to read a fetter into this understandably wide discretion (echoing, as it does, Art. VI of the New York Convention).
The judge framed the ultimate procedural choice clearly: the court had to decide whether it was appropriate to issue an order staying these proceedings under Article 44(2) of the DIFC Arbitration Law, or whether the enforcement application should be dismissed entirely at this preliminary stage. Dismissal would have been a draconian step, permanently shutting the door on the Claimants in the DIFC. A stay, conversely, preserved the status quo while deferring to the supervisory jurisdiction of the Dubai courts.
Sir John Chadwick concluded that waiting for the onshore courts to rule on the award's validity was the only prudent path forward. If the Dubai Civil Courts annulled the award, the DIFC enforcement proceedings would naturally fall away. If the onshore courts upheld the award, or remitted it to the tribunal for clarification, the DIFC Court would then have a legally coherent document upon which to base an enforcement order.
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
By issuing the stay, the Deputy Chief Justice effectively insulated the DIFC Court from the risk of enforcing a potentially void or fundamentally ambiguous award.
For those reasons, I am satisfied that the right order to make in this case is an order under Article 44(2) staying the recognition and enforcement proceedings commenced in this Court under reference ARB-001-2015 until the Dubai Civil Courts have determined, one way or the other, the annulment proceedings that now are before them.
The ruling in Fabiola v Faddey serves as a vital recalibration of the DIFC's enforcement machinery. It demonstrates that while the DIFC Courts are statutorily bound to recognize arbitral awards, they will not act as a blind rubber stamp when the tribunal has failed to articulate the basic mechanics of liability. Sir John Chadwick’s decision underscores a sophisticated judicial restraint: recognizing that the fastest route to enforcement is not always the legally correct one, and that preserving the structural integrity of the arbitral process requires enforcing courts to respect the boundaries of their own jurisdiction, even when millions of dirhams hang in the balance.
Which Earlier DIFC Cases Frame This Decision?
The procedural impasse in Fabiola v Faddey forces a critical examination of how the DIFC Courts handle parallel proceedings. When proceedings ARB-001-2015 were commenced by the claimants, Fabiola and Fairuza, the objective appeared straightforward: the recognition and enforcement of an arbitral award demanding payment by Faddey and Fai within 14 days of approximately AED 36.4 million. However, the defendants, Faddey LLC and Fai Properties PJSC, had already initiated an attack on the award at its seat, launching an action in the Civil Courts of Dubai on 31 May 2015. This collision between an enforcement application in the DIFC and an annulment application in onshore Dubai requires the Court to navigate the delicate boundary between supporting arbitration and respecting the supervisory jurisdiction of the seat.
The DIFC's approach to parallel proceedings has evolved through a series of key rulings that emphasize seat autonomy. To understand Deputy Chief Justice Sir John Chadwick’s restraint in Fabiola, one must look back to the foundational posture established in ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC [2013] DIFC ARB 003. In Banyan Tree, the DIFC Courts confirmed their status as a conduit jurisdiction, willing to recognize and enforce awards even when the award debtor lacked assets within the DIFC. That ruling signaled a robust, pro-enforcement stance, interpreting Article 42(1) of the DIFC Arbitration Law as a strict mandate to enforce arbitral awards irrespective of the state or jurisdiction in which they were made.
Yet, the conduit jurisdiction doctrine was never intended to operate as an unthinking rubber stamp. The distinction between enforcement and annulment remains a critical fault line in DIFC jurisprudence. While Banyan Tree dealt with a recalcitrant debtor attempting to evade a valid award, Fabiola presents a scenario where the award itself suffers from internal ambiguities. The arbitral tribunal had ordered Faddey LLC and Fai Properties PJSC to pay the claimants, but crucially failed to specify whether that liability was joint, several, or joint and several.
There are, in my view, real problems with the Award as it stands. As I have said, the first problem is whether there are indeed two parties who are liable for the obligations arising under the Sale Agreement.
Faced with this ambiguity, Sir John Chadwick recognized that forcing enforcement would require the DIFC Court to interpret, and potentially rewrite, the substantive obligations of the award. Such an intervention would overstep the bounds of an enforcing court. The court builds upon the principles of arbitral support established in earlier cases by recognizing that true support sometimes means allowing the supervisory court to clarify or annul a defective award.
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
The statutory mechanism for this restraint is found in Article 44 of the Arbitration Law, specifically Article 44(2), which grants the DIFC Courts discretion to adjourn enforcement decisions if an application for setting aside the award has been made to the competent court at the seat. The exercise of this discretion requires a careful balancing act. The DIFC Courts must distinguish between genuine annulment challenges that warrant a stay and tactical maneuvers designed merely to frustrate enforcement.
This brings the analysis to the contrast with ARB-005-2014 Eava v Egan [2014] ARB 005. In Eava, the DIFC Court confronted a situation where parallel proceedings were deployed as a transparent delay tactic. The court in that instance refused to allow the mere existence of a challenge at the seat to automatically derail enforcement, demanding instead that the challenge possess a realistic prospect of success. Sir John Chadwick applies this exact standard in Fabiola, but reaches a different conclusion based on the facts. The defendants' reliance on Article 216 in Chapter III of the UAE Civil Procedures Law was not a frivolous delay tactic; it was a substantive attack on an award that lacked essential reasoning regarding liability.
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
By confirming the bona fide nature of the Dubai Civil Courts action, Sir John Chadwick anchors the Article 44(2) discretion in objective criteria. The court's reliance on established rules ensures consistency for international parties. Practitioners structuring cross-border transactions through Dubai now have a clear doctrinal test: the DIFC Courts will aggressively enforce awards under the Banyan Tree doctrine, but will hit the brakes under Article 44(2) if a parallel annulment action at the seat is both genuine and grounded in fundamental defects within the award itself.
The breadth of this discretion is a deliberate feature of the DIFC Arbitration Law, designed to mirror international standards. Sir John Chadwick explicitly connects the DIFC's statutory framework to the broader architecture of international arbitration, noting the parallels with the New York Convention.
In my judgment, it would be wrong to read a fetter into this understandably wide discretion (echoing, as it does, Art. VI of the New York Convention).
This refusal to read a fetter into the discretion preserves the DIFC Court's ability to respond to the unique procedural postures of complex commercial disputes. In Fabiola, the appropriate response is deference to the seat. The Dubai Civil Courts, as the supervisory jurisdiction, possess the authority to either annul the award or potentially remit it to the arbitral tribunal for clarification. For the DIFC Court to preempt that process by either dismissing the enforcement application entirely or forcing it through would violate the principle of seat autonomy.
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
The resulting order—a stay of proceedings—represents a sophisticated calibration of judicial power. It maintains the DIFC Court's jurisdiction over the enforcement action, keeping the pressure on the defendants, while simultaneously respecting the primacy of the Dubai Civil Courts in determining the ultimate validity of the award.
For those reasons, I am satisfied that the right order to make in this case is an order under Article 44(2) staying the recognition and enforcement proceedings commenced in this Court under reference ARB-001-2015 until the Dubai Civil Courts have determined, one way or the other, the annulment proceedings that now are before them.
Ultimately, Fabiola v Faddey refines the aggressive enforcement posture of earlier years by injecting a necessary dose of pragmatism. The DIFC Courts will not act as an uncritical collection agency for fundamentally flawed arbitral awards. By staying the enforcement pending the outcome of the onshore annulment proceedings, Sir John Chadwick ensures that the DIFC remains a jurisdiction that supports arbitration not merely by enforcing every award that crosses its desk, but by respecting the structural integrity of the arbitral process, including the vital role of the supervisory seat.
What Does This Mean for Practitioners and Enforcement Strategy?
The procedural impasse reached in Fabiola v Faddey exposes a critical vulnerability in cross-border arbitration practice: the peril of the ambiguous award. For practitioners navigating the recognition and execution of arbitral decisions within the Dubai International Financial Centre (DIFC), the ruling serves as a stark reminder that the enforcing court will not act as a curative mechanism for defective tribunal drafting. Practitioners must ensure that arbitral awards are drafted with absolute clarity regarding liability to avoid enforcement hurdles. When an award fails to specify the exact nature of the respondents' obligations, it provides judgment debtors with a potent weapon to derail enforcement, weaponising the ambiguity to launch parallel annulment proceedings and secure stays of execution.
The genesis of the enforcement paralysis in this dispute lay entirely in the text of the underlying arbitral award. The claimants, Fabiola and Fairuza, approached the DIFC Court of First Instance seeking the relief sought in the proceedings, which was the recognition and enforcement of an award directing the payment of AED 36,496,744. However, the arbitral tribunal had committed a fundamental drafting error: it ordered the two defendants, Faddey LLC and Fai Properties PJSC, to pay the aggregate sum but remained entirely silent on whether that liability was joint, several, or joint and several. Faced with this vacuum, the claimants asked the DIFC Court to simply read joint and several liability into the award and issue an enforcement order on that basis.
Deputy Chief Justice Sir John Chadwick firmly rejected this invitation to rewrite the tribunal’s findings. The DIFC Court’s jurisdiction under the Arbitration Law is strictly supervisory and enforcing; it does not possess the appellate authority to infer substantive legal conclusions that the arbitrators omitted. Addressing the claimants' request to impose joint and several liability by judicial fiat, Sir John Chadwick articulated the boundary of the Court's role:
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
This refusal underscores a vital strategic imperative for arbitration counsel. The burden of ensuring an award is executable rests squarely on the prevailing party before the tribunal becomes functus officio. If a tribunal issues a draft or final award that contains structural ambiguities regarding the apportionment of liability, counsel must immediately utilise the institutional rules to request an interpretation or correction of the award. Bringing an ambiguous award to the DIFC Court for enforcement is a high-risk gamble. The Court will not substitute its own judgment for the missing mechanics of the tribunal's decision, leaving the prevailing party with an unenforceable piece of paper.
The defendants in this matter executed a textbook defensive strategy, capitalising on the tribunal's silence to fracture the proceedings. Recognising that the award was fundamentally flawed, Faddey LLC and Fai Properties PJSC did not merely resist enforcement in the DIFC; they proactively initiated an attack at the seat of the arbitration. They launched annulment proceedings now pending in the Dubai Civil Courts, grounding their challenge in Article 216 in Chapter III of the UAE Civil Procedures Law. By doing so, they created a parallel jurisdictional track, setting the stage for an application to stay the DIFC enforcement action.
The mechanism for this defensive manoeuvre is Article 44(2) of the DIFC Arbitration Law, which mirrors Article VI of the New York Convention. It grants the DIFC Court the discretion to adjourn enforcement decisions if an application for setting aside the award has been made to a competent court at the seat. For practitioners, anticipating this stay application is a mandatory component of enforcement strategy. When an award is rendered onshore in Dubai and brought to the DIFC for execution—a route famously cemented by ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC and further analysed in ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC [2013] DIFC ARB 003—defendants will routinely file onshore annulment actions to trigger the Article 44(2) discretion.
However, the DIFC Court does not grant these stays automatically. The jurisprudence requires the Court to assess whether the parallel annulment proceedings are bona fide or merely a vexatious tactic designed to frustrate the judgment creditor. In Fabiola v Faddey, the tribunal's failure to specify the nature of liability provided the defendants with a genuinely arguable ground for annulment. The ambiguity was not a manufactured grievance; it was a structural defect in the award. Sir John Chadwick recognised the legitimacy of the defendants' onshore challenge, noting:
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
This finding is the crux of the strategic lesson. Ambiguity in an award transforms what might otherwise be dismissed as a frivolous delay tactic into a bona fide annulment challenge. Had the tribunal explicitly ruled that Faddey LLC and Fai Properties PJSC were jointly and severally liable, the DIFC Court would likely have viewed the onshore annulment action with intense scepticism, potentially refusing the stay and proceeding with immediate enforcement, consistent with the robust approach to parallel challenges seen in ARB-005-2014 Eava v Egan [2014] ARB 005. Instead, the drafting failure handed the defendants a legitimate basis to halt the DIFC proceedings.
The Court's decision to stay the enforcement rather than dismiss it outright reflects a careful balancing of arbitral finality against the risk of conflicting judgments. Sir John Chadwick determined that the most prudent course was to wait for the onshore courts to resolve the structural defects of the award, or for the matter to be remitted to the arbitrators for clarification:
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
For claimants' counsel, this outcome represents a catastrophic loss of momentum. The enforcement of a multi-million dirham award is now frozen, tethered to the timeline of the Dubai Civil Courts and the potential necessity of a remittal to the original tribunal. The financial and temporal costs of this delay are immense, and they stem entirely from the failure to secure an unambiguous dispositive section in the final award.
To mitigate these risks, practitioners must adopt a highly defensive posture during the drafting of arbitral memorials and post-hearing briefs. Prayers for relief must explicitly demand that the tribunal rule on the specific mechanics of liability, particularly in multi-party disputes. If the tribunal fails to do so, counsel must aggressively pursue post-award correction procedures before attempting cross-border enforcement. Relying on the enforcing court to bridge the gap between an ambiguous award and a clean execution order is a strategy destined for failure. The DIFC Court will protect the integrity of the enforcement process, but it will not cure the substantive omissions of the arbitral tribunal. Ambiguity remains the ultimate shield for a judgment debtor, and eliminating it must be the primary objective of any competent enforcement strategy.
What Issues Remain Unresolved in the Wake of This Ruling?
The decision by Deputy Chief Justice Sir John Chadwick to stay the enforcement of the arbitral award in Fabiola v Faddey exposes a critical procedural frontier for the DIFC Courts: the precise mechanics of handling an award that is structurally ambiguous and subject to active, parallel annulment proceedings in a neighboring jurisdiction. By pausing the claimants’ pursuit of in aggregate some AED 36,496,744, the Court prioritized jurisdictional comity and arbitral precision over immediate enforcement. Yet, the ruling leaves a vacuum regarding how the DIFC Courts will ultimately process the award if the Dubai Civil Courts choose to partially annul or substantively clarify the tribunal’s findings.
The central defect in the underlying DIAC award was its silence on the nature of the defendants' liability. The tribunal ordered Faddey LLC and Fai Properties PJSC to pay the multi-million dirham sum, but failed to specify whether that obligation was joint, several, or joint and several. This was not a mere typographical oversight; it went to the heart of the contractual matrix. The underlying Sale Agreement contained specific obligations regarding the transfer of property, yet the corporate realities of the defendants were distinct. As the Court noted, the contractual requirement to transfer free and unencumbered freehold title pointed exclusively to Fai Properties PJSC, as it was common ground that Fai, not Faddey, held the freehold title to the site. Lumping both entities into a single, undifferentiated liability order created an enforcement puzzle that the DIFC Court was unwilling to solve through judicial guesswork.
Deputy Chief Justice Sir John Chadwick drew a firm line delineating the limits of the DIFC Court’s power to interpret an ambiguous arbitral award. Rather than stepping into the shoes of the arbitrators to infer the intended liability structure, the Court recognized the danger of inadvertently rewriting the award under the guise of enforcement.
I think this Court should not address what I think is a difficult question - can it make an order for an enforcement of an award against two parties in circumstances where the award itself is silent as to the basis of liability - unless and until it has become clear that it is necessary for it to do so.
This judicial restraint underscores a fundamental tension in international arbitration: the balance between supporting the arbitral process and respecting the finality of the tribunal's drafted text. If a court aggressively interprets a silent award to facilitate enforcement, it risks overstepping its supervisory mandate. Conversely, if it refuses enforcement entirely based on ambiguity, it undermines the efficacy of the arbitral mechanism. By opting for a stay under Article 44(2) of the DIFC Arbitration Law, the Court deferred the interpretive burden, suggesting that the defect might require formal remission to the original tribunal or intervention by the seat's supervisory courts.
In my view, it would be premature to decide the question whether this Court should decline jurisdiction on that basis until it knows the views of the Dubai Civil Court on the question whether the Award is a nullity; or whether there is some process under which it can be clarified - perhaps by a further reference back to the arbitral tribunal – whether it was intended that liability under the Award should be joint, joint and several, or several.
The reliance on the Dubai Civil Courts to potentially clarify the award introduces a complex variable into the DIFC's enforcement ecosystem. The defendants' annulment action onshore was grounded in Article 216 in Chapter III of the UAE Civil Procedures Law, arguing that the arbitrators failed to provide adequate reasons for the award regarding the apportionment of liability. If the Dubai Civil Court agrees, it faces a binary choice under traditional UAE onshore practice: annul the award entirely, or, if procedural mechanisms permit, sever the defective portions.
The unresolved question is how the DIFC Court will react if the Dubai Civil Court issues a judgment that partially annuls the award—for instance, striking down the liability against Faddey LLC while upholding it against Fai Properties PJSC. The DIFC Arbitration Law provides clear grounds for refusing enforcement of an award that has been set aside by the courts of the seat. However, the statute is less explicit on the procedural mechanics of enforcing a surgically modified award. Will Fabiola and Fairuza be required to file a fresh enforcement application reflecting the onshore court's modifications, or can the DIFC Court simply lift the stay and enforce the surviving remnants of the original DIAC award? The lack of established precedent on this specific interplay leaves practitioners navigating a procedural gray area.
Furthermore, the decision sets a critical, albeit highly fact-specific, threshold for what constitutes a 'bona fide' annulment challenge capable of triggering a stay. The DIFC Courts have historically been wary of debtors using parallel onshore annulment proceedings as a mere delay tactic to frustrate legitimate enforcement. In cases like ARB-005-2014 Eava v Egan [2014] ARB 005, the judiciary has demonstrated a willingness to push forward with recognition where foreign challenges appear frivolous or purely dilatory. However, Sir John Chadwick found that the structural flaws in the Fabiola award elevated the defendants' onshore challenge beyond mere obstructionism.
In my view, it cannot be said that the annulment proceedings now pending in the Dubai Civil Courts were brought other than bona fide or that they were brought simply in order to delay the point by which the Award has to be satisfied.
This finding requires future litigants to carefully assess the substantive merits of any parallel annulment action before seeking a stay in the DIFC. A debtor cannot simply file an onshore grievance and expect an automatic pause in DIFC enforcement. The challenge must target a genuine, material defect in the award—such as the failure to delineate liability among multiple respondents with distinct contractual roles—to satisfy the 'bona fide' standard.
The long-term impact of this approach on the perceived efficiency of the DIFC as a conduit jurisdiction is profound. The DIFC Courts built their reputation on robust, pro-enforcement doctrines, famously articulated in ARB-003-2013 Banyan Tree Corporate PTE Ltd v Meydan Group LLC , which allowed award creditors to use the DIFC as a gateway to onshore Dubai assets even absent a geographic nexus. However, the Fabiola ruling demonstrates that this conduit is not a blind conveyor belt. When an award is fundamentally ambiguous, the DIFC Court will not cure the tribunal's drafting failures just to expedite asset recovery.
By staying the proceedings, the DIFC Court effectively subordinated its own enforcement timeline to the docket of the Dubai Civil Courts. While legally sound under Article 44(2), this deference inevitably extends the lifecycle of the dispute, forcing the claimants to litigate the validity of the award in Arabic onshore before they can monetize it in the English-language offshore courts. For international practitioners drafting arbitration clauses, the case serves as a stark reminder that the speed of DIFC enforcement is entirely dependent on the precision of the underlying arbitral award. A tribunal's failure to explicitly define the mechanics of liability can transform a straightforward recognition action into a multi-year, cross-jurisdictional quagmire.
Ultimately, the Fabiola stay preserves the integrity of the DIFC's supervisory function by refusing to enforce an order that cannot be clearly understood. Yet, until the Dubai Civil Courts render their final verdict on the annulment, and the DIFC Court is forced to grapple with the resulting fallout—be it a clarified award, a partially annulled award, or a total nullity—the exact boundaries of the DIFC's power to adapt and enforce modified arbitral decisions remain untested. The ruling successfully avoids an immediate jurisdictional clash, but it leaves the ultimate resolution of the AED 36 million liability suspended in procedural amber.