On June 20, 2024, Justice Michael Black KC delivered a decisive blow to jurisdictional obstructionism, dismissing the Defendant’s application to discharge an interim anti-suit injunction in Narciso v Nash. The ruling, which followed a tense return date hearing on June 14, effectively restrained the Defendant from pursuing parallel litigation in Sharjah. The court’s order, underpinned by the threat of contempt, solidified the Claimant’s position after a long-standing dispute involving an Abu Dhabi Court of Cassation award of AED 17,816,932.25.
For cross-border litigators and arbitration counsel, this decision serves as a critical reminder that the DIFC Court will not tolerate attempts to bypass agreed-upon arbitration mechanisms through parallel local court proceedings. By confirming that the DIFC Court possesses the inherent jurisdiction to grant anti-suit injunctions regardless of the seat, Justice Black KC has reinforced the DIFC’s role as a protective bulwark for international arbitration, even when parties attempt to weaponize jurisdictional ambiguity following the enactment of Dubai Decree No. 34 of 2021.
How Did the Dispute Between Narciso and Nash Arise?
The commercial friction that ultimately required the intervention of the Dubai International Financial Centre (DIFC) Courts began as a conventional construction dispute before mutating into a complex jurisdictional battle. The underlying relationship was established via an agreement with an effective date of April 8, 2020, under which Narciso operated as the main contractor and Nash as the sub-contractor. The scope of works involved various engineering and construction activities for a residential project for 380 houses in Sharjah. When performance broke down, the parties found themselves entangled in a high-stakes conflict that initially bypassed the arbitral mechanism entirely, culminating in a definitive ruling from the highest appellate court in the neighboring emirate of Abu Dhabi.
The Claimant successfully navigated the initial phase of the dispute, securing a substantial victory that should have, in theory, resolved the financial core of the conflict. The magnitude of that victory was unambiguous.
On 13 July 2023, the Abu Dhabi Court of Cassation awarded the Claimant the principal sum of AED 17,816,932.25 plus interest.
Rather than accepting the finality of the Abu Dhabi Court of Cassation awarded the Claimant judgment, the Defendant initiated a sequence of procedural maneuvers designed to relitigate the underlying merits. The first of these maneuvers involved a belated attempt to invoke the parties' arbitration agreement. However, the landscape of Dubai-seated arbitration had fundamentally shifted since the execution of the 2020 contract. The enactment of Dubai Decree No. 34 of 2021 had abolished the DIFC-LCIA Arbitration Centre, transferring its caseload and administrative functions to the Dubai International Arbitration Centre (DIAC). Consequently, any attempt to arbitrate under the legacy DIFC-LCIA rules required engagement with DIAC's administrative machinery.
On September 21, 2023, the Defendant submitted an application to DIAC. H.E. Justice Michael Black KC scrutinized this submission to determine its procedural validity under the prevailing institutional rules. The court found that the initial filing met the threshold requirements for commencing an arbitration:
I am of the view that the Defendant’s application to DIAC of 21 September 2023 was a valid Request for Arbitration within the meaning of Article 4.1 of the DIAC Rules as it satisfied all the relevant requirements as set out in detail at paragraph 11 above.
Despite submitting a valid Request for Arbitration within the meaning of Article 4.1, the Defendant's arbitral strategy collapsed due to a fundamental administrative failure. The initiation of a DIAC arbitration is strictly contingent upon the payment of requisite fees. The Defendant failed to satisfy this basic financial prerequisite, effectively stalling the very process it had initiated. Justice Black KC detailed the precise nature of this procedural default:
What was not done was to make payment of the registration fee required by Article 1.1 of Appendix I to the DIAC Rules. Article 4.1 of the DIAC Rules states that if the Claimant fails to pay the registration fee, the Request shall not be registered by the Centre.
The failure to pay the registration fee created a procedural vacuum. The Defendant, having stalled the DIAC arbitration through its own non-payment, then executed a sharp jurisdictional pivot. Abandoning the arbitral forum entirely, the Defendant commenced parallel litigation in the onshore courts of Sharjah. This move represented a direct challenge to the exclusivity of the arbitration agreement and a blatant attempt to bypass the AED 17.8 million judgment already handed down in Abu Dhabi. The strategy was clear: utilize the local courts of the emirate where the project was located to force a de novo review of the dispute, ignoring both the prior appellate judgment and the contractual commitment to arbitrate.
Faced with the prospect of defending parallel onshore proceedings, the Claimant urgently petitioned the DIFC Court for an anti-suit injunction. The objective was to restrain the Defendant from advancing the Sharjah litigation, thereby enforcing the negative covenant inherent in the arbitration agreement—namely, the promise not to sue in a non-arbitral forum. Justice Black KC responded swiftly to the Claimant's ex parte application, recognizing the immediate threat to the integrity of the arbitral process.
On 20 May 2024, I made a without notice Anti-Suit Injunction against the Defendant and ordered that a Return Date hearing be held on notice on 27 May 2024.
The issuance of the without notice Anti-Suit Injunction against the Defendant set the stage for a fierce jurisdictional confrontation at the return date. The Defendant, now restrained under threat of contempt, sought to dismantle the injunction by attacking the DIFC Court's authority to issue it. The Defendant's primary argument rested on a narrow interpretation of the judicial gateways available under the Judicial Authority Law (Dubai Law No. 12 of 2004, as amended).
The Defendant contends that that DIFC court has no jurisdiction to try the application for the Anti-Suit Injunction because neither of the parties is a DIFC Establishment.
This jurisdictional objection strikes at the heart of the DIFC Court's role as a supervisory jurisdiction for arbitration. The Defendant's argument attempted to roll back years of established jurisprudence regarding the court's expansive jurisdiction to support arbitral proceedings, regardless of the parties' physical domicile. The DIFC Court has long held that its jurisdiction is not strictly confined to entities operating within the financial free zone, particularly when acting as a conduit or supervisory court for arbitration. This expansive approach to jurisdiction was definitively cemented in ARB-003-2013: Banyan Tree Corporate PTE Ltd v Meydan Group LLC [2013] DIFC ARB 003, which established that the DIFC Courts possess the authority to recognize and enforce arbitral awards even absent a geographic nexus to the DIFC. The Defendant in Narciso v Nash sought to ignore this doctrinal reality, arguing that the lack of a DIFC Establishment nexus precluded the issuance of an anti-suit injunction.
To resolve the jurisdictional challenge and determine the fate of the injunction, Justice Black KC recognized that the analysis must begin with the foundational contract itself. The court had to ascertain the governing law of the arbitration agreement to evaluate its continued validity, especially in the wake of Decree 34 and the Defendant's aborted DIAC filing.
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat).
The requirement to determine the proper law of the Arbitration Agreement is a critical step in any anti-suit analysis. If the arbitration agreement was governed by DIFC law, the DIFC Court would have a strong mandate to protect it. The Defendant argued that the agreement had been abandoned or terminated by the Claimant's alleged fundamental breaches, thereby freeing the Defendant to litigate in Sharjah. However, Justice Black KC applied the rigorous standards of the DIFC Contract Law to assess this claim of abandonment.
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
The court found no evidence that the Defendant had satisfied the strict notice requirements under Article 86(2) of the DIFC Contract Law. The mere failure of the DIAC arbitration to proceed—caused entirely by the Defendant's own failure to pay the registration fee—did not constitute a termination of the underlying agreement to arbitrate. The arbitration agreement remained a valid and binding negative covenant.
Having established the provisional validity of the arbitration agreement and the court's jurisdiction to protect it, Justice Black KC turned to the standard for maintaining the interim injunction. Because the hearing was an interim application pending a full Part 8 trial for a permanent injunction, the court did not need to make final determinations on the merits. Instead, the court relied on the well-established English law principles governing interim equitable relief.
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
By confirming that there was a serious issue to be tried, Justice Black KC effectively neutralized the Defendant's attempt to outflank the Abu Dhabi judgment via the Sharjah courts. The ruling reinforces the principle that a party cannot manufacture the failure of an arbitral process through its own administrative default (such as non-payment of fees) and then use that failure as a pretext to launch parallel onshore litigation. The DIFC Court's willingness to deploy its injunctive powers in this context serves as a vital safeguard against jurisdictional obstructionism, ensuring that high-value arbitral awards and valid arbitration agreements are not easily circumvented by tactical forum shopping in neighboring emirates.
How Did the Case Move From Ex Parte Application to Final Hearing?
The procedural trajectory of Narciso v Nash [2024] DIFC ARB 009 provides a masterclass in how the Dubai International Financial Centre (DIFC) Courts manage the tension between urgent equitable relief and tactical jurisdictional obstructionism. The timeline from the initial ex parte application to the final return date hearing reveals a court acutely aware of the dynamics of cross-border litigation, where defendants frequently deploy procedural delays to advance parallel proceedings in onshore courts. By dissecting the rapid sequence of events between May 17 and June 20, 2024, a clear doctrinal picture emerges: the DIFC Court will accommodate a defendant's right to be heard on jurisdiction, but it will not allow that accommodation to serve as a Trojan horse for breaching an arbitration agreement.
The urgency of the matter was dictated by the high stakes of the underlying dispute. The Claimant was seeking to protect its position following a massive onshore victory. As Justice Michael Black KC noted regarding the background of the conflict:
On 13 July 2023, the Abu Dhabi Court of Cassation awarded the Claimant the principal sum of AED 17,816,932.25 plus interest.
Faced with the Defendant's attempts to outflank this substantial award by initiating parallel litigation in Sharjah, the Claimant moved swiftly. On May 17, 2024, the Claimant filed an ex parte Urgent Application No. ARB-009-2024 dated 17 May 2024 seeking an interim anti-suit injunction. The choice to proceed ex parte—without notice to the Defendant—was a calculated necessity. In the context of anti-suit injunctions, providing notice can often precipitate the very harm the injunction seeks to prevent, prompting the respondent to accelerate the foreign or parallel proceedings before the injunction can be granted.
The DIFC Court's Arbitration Division responded with characteristic agility. Within three days, the court evaluated the application and granted the requested relief. Justice Black KC summarized this initial decisive intervention:
On 20 May 2024, I made a without notice Anti-Suit Injunction against the Defendant and ordered that a Return Date hearing be held on notice on 27 May 2024.
The granting of the ex parte order on May 20 established the critical baseline for the ensuing procedural battle. However, securing an ex parte injunction is only the first hurdle; sustaining it requires satisfying the court that the drastic remedy is justified under established legal principles. In determining whether to grant the interim relief pending a full Part 8 claim, Justice Black KC relied on the well-worn framework for interim injunctions, focusing on the threshold requirement of a triable issue rather than conducting a mini-trial on the merits.
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
With the American Cyanamid threshold met and the injunction in place, the procedural burden shifted to the Defendant. The May 27 return date was intended to be the forum where the Defendant would answer the injunction. Instead, the Defendant executed a classic stalling maneuver, seeking to bifurcate the proceedings by introducing a fundamental challenge to the court's authority.
On 27 May 2024, the Defendant requested more time to answer the injunction and to make an application to challenge the jurisdiction of the Court.
The Defendant's strategy was transparent: delay the substantive review of the anti-suit injunction by forcing a preliminary battle over jurisdiction. The core of the Defendant's argument rested on the lack of a direct territorial nexus to the financial centre. As the court recorded:
The Defendant contends that that DIFC court has no jurisdiction to try the application for the Anti-Suit Injunction because neither of the parties is a DIFC Establishment.
Faced with this request for an adjournment, the court had to balance the Defendant's fundamental right to challenge jurisdiction against the Claimant's need for continued protection from the Sharjah proceedings. Justice Black KC's solution was procedurally elegant and highly effective. The court granted the adjournment, pushing the consolidated hearing to June 14, but crucially, it issued an order granting the continuation of the Interim Anti-Suit Injunction on 27 May 2024. By keeping the injunction alive during the adjournment, the court neutralized the tactical advantage of the Defendant's delay. The "shadow" of the jurisdictional challenge was not allowed to provide cover for the Defendant to advance the parallel litigation.
This approach contrasts sharply with scenarios where courts might discharge an ex parte order if a credible jurisdictional challenge is raised, pending a full hearing. The DIFC Court's refusal to drop the shield demonstrates a robust commitment to preserving the status quo in arbitration-related disputes. It echoes the rigorous standards applied in other complex procedural contexts within the centre, such as those analyzed in ARB-009-2019: ARB 009/2019 Ocie v Ortensia, where the integrity of ex parte applications and the duty of full and frank disclosure are paramount. In Narciso v Nash, the Claimant's initial disclosure was sufficient to hold the line even as the Defendant mobilized its jurisdictional counter-attack.
Following the May 27 adjournment, the Defendant formalized its position by filing the Defendant's Application No. ARB-009-2024/2 dated 3 June 2024, explicitly seeking to discharge the interim anti-suit injunction on jurisdictional grounds. This set the stage for the decisive Return Date hearing on June 14, 2024. The June 14 hearing was a consolidated crucible, forcing the Defendant to argue both its jurisdictional objection and its substantive opposition to the injunction simultaneously.
At the hearing, the court systematically dismantled the Defendant's jurisdictional arguments. Having resolved the threshold issue of its own authority, the court immediately pivoted back to the substantive question of the injunction's survival.
Having found that the Court has jurisdiction to try the Claimant’s claim, I must consider whether to continue the interim Anti-Suit Injunction until the hearing of the Claimant's Part 8 claim for a final anti-suit injunction.
The resulting order, issued on June 20, 2024, was unequivocal. Justice Black KC dismissed the Defendant's jurisdictional challenge and ordered the continuation of the interim anti-suit injunction. However, the court did not merely issue a declaratory continuation; it embedded the order with severe coercive mechanisms designed to ensure absolute compliance.
The June 20 order was front-loaded with a stark penal notice, elevating the directive from a standard procedural order to a hard-edged enforcement tool. The notice warned in uncompromising terms: IF YOU, NASH DISOBEY THIS ORDER, YOU MAY BE HELD TO BE IN CONTEMPT OF COURT and explicitly threatened referral to the Attorney General of Dubai, fines, or asset seizure. This aggressive framing underscores the court's zero-tolerance policy for jurisdictional gamesmanship once its authority has been confirmed.
Furthermore, the court imposed affirmative obligations on the Defendant to actively suppress the parallel litigation. The order mandated that the Defendant must "Take all necessary steps required to maintain the adjournment of the Sharjah Proceedings" until the final determination of the Part 8 proceedings. This requirement to actively maintain the adjournment, rather than merely passively refraining from advancing the case, closes a common loophole where defendants allow foreign proceedings to advance by default or inaction.
Finally, the procedural history concludes with the strategic deferral of the financial reckoning. Despite the Claimant's comprehensive victory in securing the ex parte order, defeating the adjournment tactic, and crushing the jurisdictional challenge, the court recognized that the interim battle was inextricably linked to the impending final war.
The Claimant has prevailed in both applications and seeks its costs. I have not heard submissions concerning costs and it seems to me that there will be a considerable overlap between the costs incurred in relation to these applications and those incurred in relation to the Claimant’s Part 8 claim.
By reserving the costs to the hearing of the Part 8 proceedings, Justice Black KC ensured that the financial consequences of the Defendant's tactical maneuvering would be assessed in the totality of the litigation. The journey from the urgent May 17 application to the definitive June 20 order illustrates a judicial architecture designed to move with devastating speed when arbitration agreements are threatened, while systematically neutralizing the procedural friction introduced by recalcitrant defendants.
What Is the 'Serious Issue to be Tried' Standard in Anti-Suit Injunctions?
The procedural trajectory of an anti-suit injunction frequently dictates its ultimate success, transforming the interim return date into the critical battleground of the litigation. In Narciso v Nash [2024] DIFC ARB 009, the DIFC Court of First Instance was tasked with navigating the delicate transition from an ex parte emergency order to a sustained interim injunction pending a final hearing. The Claimant had initially secured an ex parte Urgent Application No. ARB-009-2024 on 17 May 2024, which the court granted on 20 May. The subsequent procedural steps required the court to determine the evidentiary and legal threshold necessary to keep that injunction alive while the Defendant actively sought to dismantle it.
When a defendant appears at a return date, the tactical objective is almost always to force the court into a premature evaluation of the substantive merits, arguing that the underlying arbitration agreement is invalid, abandoned, or otherwise unenforceable. In this instance, the Defendant sought an adjournment, resulting in the court adjourning the Return Date hearing until 14 June 2024, while simultaneously challenging the jurisdiction of the DIFC Court. Justice Michael Black KC, however, strictly bifurcated the jurisdictional inquiry from the merits of the final injunction, establishing a clear doctrinal boundary for interim relief.
Having found that the Court has jurisdiction to try the Claimant’s claim, I must consider whether to continue the interim Anti-Suit Injunction until the hearing of the Claimant's Part 8 claim for a final anti-suit injunction.
Once jurisdiction is established, the court's function at the interim stage is not to conduct a mini-trial on the validity of the arbitration agreement. Instead, the DIFC Court relies on the well-established framework derived from the English House of Lords decision in American Cyanamid Co v Ethicon Ltd [1975] AC 396. The Cyanamid test fundamentally altered the landscape of interlocutory injunctions by lowering the initial threshold from a "prima facie case" to a mere "serious issue to be tried," followed by a rigorous assessment of the balance of convenience. Justice Black explicitly anchored his analysis in this standard, citing Steven Gee KC’s authoritative text on commercial injunctions to justify the limited scope of his inquiry.
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
The application of the Cyanamid standard in the context of anti-suit injunctions serves a specific protective function. An anti-suit injunction designed to enforce an arbitration agreement is inherently forward-looking; it seeks to preserve the negative covenant of the arbitration clause—the promise not to sue in a foreign court—until the proper forum can be definitively established. If the DIFC Court required a claimant to prove the absolute validity and enforceability of the arbitration agreement at the interim stage, it would effectively collapse the final Part 8 hearing into the return date, demanding a level of evidentiary certainty that is often impossible to achieve on short notice.
By asking only whether there is a "serious issue to be tried," the court acknowledges the provisional nature of the proceedings. The threshold is deliberately accessible. A claim will satisfy this requirement unless it is frivolous, vexatious, or entirely devoid of legal foundation. In Narciso v Nash, the Defendant advanced complex arguments suggesting that the arbitration agreement had been terminated or abandoned due to the Claimant's alleged failure to perform, specifically pointing to procedural missteps before the Dubai International Arbitration Centre (DIAC). Rather than definitively resolving these contractual disputes, Justice Black evaluated them through the prism of provisional plausibility.
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
The phrase "on a provisional basis" is the doctrinal linchpin of the court's approach. The court applied Article 86(2) of the DIFC Contract Law not to issue a final declaratory judgment on the status of the contract, but to assess whether the Claimant possessed a legally viable argument that the agreement remained intact. Because the Defendant could not conclusively demonstrate that the agreement had been lawfully terminated under the specific mechanisms of DIFC law, the Claimant's assertion of a valid arbitration agreement easily cleared the "serious issue" hurdle.
This accessible threshold for interim anti-suit injunctions stands in stark contrast to the heavier burdens placed on applicants seeking other forms of interim relief. For instance, as explored in ARB-010-2024: ARB 010/2024 Neven v Nole, the DIFC Courts demand a significantly higher degree of certainty when granting freezing orders or proprietary injunctions, where the immediate impact on a defendant's assets is severe and potentially irreversible. In the anti-suit context, however, the primary objective is merely to hold the ring. The injunction does not deprive the defendant of property; it merely dictates the forum in which the dispute must be paused until the DIFC Court can render a final decision.
Once the "serious issue" is established, the Cyanamid framework requires the court to evaluate the balance of convenience, often framed as the risk of injustice. The court must weigh the potential harm to the Claimant if the injunction is wrongly refused against the potential harm to the Defendant if the injunction is wrongly granted. In the context of parallel proceedings in Sharjah, the calculus heavily favoured the Claimant. If the Interim Anti-Suit Injunction were discharged, the Defendant would be free to advance the Sharjah litigation, potentially securing judgments that would render the DIFC Part 8 proceedings moot and irreparably breach the arbitration agreement. Conversely, maintaining the injunction merely delayed the Defendant's pursuit of the Sharjah claims until the DIFC Court could finally determine the jurisdictional priority.
To enforce this balance, the court's order was highly prescriptive, requiring the Defendant to take affirmative steps to halt the foreign litigation. The Defendant was ordered to maintain the adjournment of the Sharjah Proceedings and to ensure that this status quo remained intact until the final determination of the Part 8 Proceedings. This mandatory phrasing prevents a defendant from passively allowing foreign proceedings to advance while hiding behind the excuse of administrative delays in the foreign court.
The tactical utility of the Part 8 procedure in the DIFC Courts further justifies the application of the Cyanamid standard. Part 8 claims are specifically designed for disputes that involve questions of law or construction where there is unlikely to be a substantial dispute of fact. By maintaining the interim injunction, the court ensures that the expedited Part 8 process can function as intended, free from the chaotic interference of parallel foreign litigation. The interim injunction acts as a necessary procedural shield, protecting the integrity of the DIFC Court's own docket as much as it protects the Claimant's contractual rights.
Ultimately, Justice Black's reliance on the American Cyanamid test in Narciso v Nash reinforces a pragmatic and protective approach to arbitration agreements within the DIFC. By refusing to be drawn into a premature adjudication of the substantive contractual disputes, and by focusing strictly on the existence of a serious issue and the balance of convenience, the court neutralised the Defendant's attempts at jurisdictional obstructionism. The ruling confirms that at the interim stage, the DIFC Court will prioritise the preservation of the arbitral forum, requiring defendants to save their substantive attacks for the final hearing rather than deploying them as procedural roadblocks at the return date.
How Did Justice Black KC Reach the Decision on Jurisdiction?
The procedural battleground in Narciso v Nash [2024] DIFC ARB 009 was defined by a rapid sequence of tactical maneuvers, beginning when the Claimant secured an initial ex parte restraint against the Defendant's parallel litigation in Sharjah. The timeline was compressed and highly contested. The court initially intervened to preserve the status quo, as On 20 May 2024, I made a without notice Anti-Suit Injunction against the Defendant, setting a rapid return date. However, the Defendant immediately sought to derail the substantive hearing on procedural grounds. At the subsequent hearing, the Defendant requested more time to answer the injunction and to make an application to challenge the jurisdiction of the DIFC Court entirely.
The Defendant’s jurisdictional challenge rested on a narrow, formalistic interpretation of the DIFC’s jurisdictional gateways. The core of the Defendant's obstructionist strategy was to argue that the DIFC Court lacked the fundamental authority to issue any injunctive relief because neither party possessed a sufficient corporate nexus to the financial centre.
The Defendant contends that that DIFC court has no jurisdiction to try the application for the Anti-Suit Injunction because neither of the parties is a DIFC Establishment.
Justice Michael Black KC firmly rejected the argument that the absence of a DIFC Establishment precludes the court from exercising its supervisory jurisdiction. The Defendant’s reliance on the corporate identity of the parties fundamentally conflated the general jurisdictional gateways of Article 5(A) of the Judicial Authority Law with the specific, arbitration-focused jurisdiction conferred by the DIFC Arbitration Law. The court confirmed its jurisdiction to grant anti-suit injunctions regardless of whether the seat is in the DIFC or elsewhere, provided there is a sufficient legal nexus to justify the court's intervention. By dismissing the "DIFC Establishment" requirement as a prerequisite for arbitral injunctions, the court closed a potential loophole that recalcitrant parties frequently attempt to exploit to evade their agreed dispute resolution mechanisms.
To anchor the court's authority, Justice Black KC pivoted the analysis away from the physical or corporate location of the parties and toward the contractual foundation of their relationship: the arbitration agreement itself. The jurisdictional inquiry required a precise determination of the governing law of that specific clause, separate from the underlying commercial contract.
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat).
By identifying the DIFC as the proper law of the Arbitration Agreement, the court established the necessary foundation to exercise its supervisory powers. This approach aligns with the DIFC Court's historically robust defense of its arbitral jurisdiction, a doctrinal trajectory heavily influenced by foundational rulings such as ARB-001-2014: (1) Fiske (2) Firmin v (1) Firuzeh, which cemented the court's autonomy and its willingness to protect arbitration agreements governed by its laws. The proper law dictates not only the interpretation of the agreement but also the availability of equitable remedies, including the anti-suit injunction sought by the Claimant.
Having failed to defeat jurisdiction on the basis of corporate identity, the Defendant mounted a secondary attack, arguing that the arbitration agreement had been abandoned or terminated due to procedural defects in the Claimant's initiation of the arbitration at the Dubai International Arbitration Centre (DIAC). The Defendant pointed to the Claimant's application to DIAC of 21 September 2023, asserting that the Claimant's failure to perfect the filing rendered the agreement void, thereby justifying the Defendant's pursuit of litigation in the Sharjah courts.
The factual record acknowledged a procedural lapse by the Claimant. Specifically, What was not done was to make payment of the registration fee required by the DIAC Rules. The Defendant attempted to elevate this administrative failure into a fundamental breach that vitiated the entire arbitration agreement. However, Justice Black KC refused to allow a missed registration fee to serve as a backdoor exit from a binding arbitration clause. Because the court had already determined that DIFC law governed the arbitration agreement, the question of termination had to be answered strictly through the lens of the DIFC Contract Law, rather than general principles of abandonment.
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
The application of Article 86(2) of the DIFC Contract Law proved fatal to the Defendant's abandonment theory. The statute requires formal, explicit notice of termination in the event of a fundamental non-performance. The Defendant had provided no such notice. Consequently, the arbitration agreement remained legally binding and fully operative. The court's rigorous application of statutory contract law to the question of arbitral abandonment prevents parties from unilaterally declaring an arbitration agreement dead based on administrative delays or procedural friction at the arbitral institution.
With the jurisdictional objections dismantled and the arbitration agreement deemed valid and subsisting, Justice Black KC turned to the standard for granting the interim relief. Because the hearing was for the continuation of an interim injunction pending a full Part 8 trial, the court did not need to make final determinations on the merits of the underlying dispute. Instead, the court applied the established English law threshold for interim injunctions.
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
The American Cyanamid standard requires the applicant to demonstrate a serious issue to be tried and that the balance of convenience favors granting the injunction. The existence of a valid arbitration agreement governed by DIFC law, coupled with the Defendant's active pursuit of parallel proceedings in Sharjah, easily satisfied the requirement of a serious issue. The commercial stakes underlying the procedural maneuvering were substantial, heavily influenced by the fact that the Abu Dhabi Court of Cassation awarded the Claimant the principal sum of AED 17,816,932.25 in a related facet of the long-standing dispute. Allowing the Defendant to bypass the agreed arbitral forum and litigate in Sharjah would have fundamentally undermined the Claimant's contractual rights and fractured the dispute resolution process.
The court's systematic dismantling of the Defendant's arguments culminated in a clear affirmation of its authority to intervene. The rejection of the "DIFC Establishment" defense, the reliance on the proper law of the arbitration agreement, and the strict application of the DIFC Contract Law to the question of abandonment all served to reinforce the primacy of the arbitral process.
Having found that the Court has jurisdiction to try the Claimant’s claim, I must consider whether to continue the interim Anti-Suit Injunction until the hearing of the Claimant's Part 8 claim for a final anti-suit injunction.
Justice Black KC’s reasoning provides a definitive roadmap for how the DIFC Court will handle jurisdictional challenges aimed at defeating anti-suit injunctions. By decoupling the court's supervisory jurisdiction from the corporate domicile of the parties and anchoring it firmly in the proper law of the arbitration agreement, the ruling ensures that parties cannot use geographical technicalities to escape their contractual obligations to arbitrate. The decision reinforces the DIFC Court's status as a robust, pro-arbitration forum willing to deploy its coercive powers to protect the integrity of arbitration agreements governed by its laws, regardless of where the parties are established or where the physical seat of the arbitration may ultimately reside.
Why Is the Proper Law of the Arbitration Agreement Critical?
Determining the proper law of an arbitration agreement is not a mere academic exercise in conflicts of law; it is the indispensable foundational step for assessing the validity of the agreement, identifying the seat, and ultimately establishing the court’s jurisdiction to grant injunctive relief. In Narciso v Nash [2024] DIFC ARB 009, the Defendant attempted to dismantle the DIFC Court’s jurisdiction by arguing that the arbitration agreement had been abandoned and that parallel proceedings in Sharjah were therefore permissible. To dismantle this jurisdictional obstructionism, H.E. Justice Michael Black KC had to anchor the court’s analysis in the proper law of the arbitration agreement.
The doctrine of separability dictates that an arbitration clause is a distinct agreement, capable of being governed by a different law than the underlying matrix contract. Identifying this specific governing law is the absolute prerequisite for determining whether the agreement to arbitrate remains legally binding and whether the designated seat falls within the supervisory purview of the court. Justice Michael Black KC articulated this structural necessity with precision:
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat).
This tripartite framework places the proper law of the Arbitration Agreement at the apex of the jurisdictional inquiry. Without first establishing the proper law, a court cannot assess whether the agreement is valid, cannot confirm the seat, and cannot evaluate whether the equitable remedy of an anti-suit injunction is available to restrain foreign proceedings. The Defendant’s jurisdictional challenge was blunt, seeking to bypass the arbitration framework entirely based on the geographical and corporate status of the litigants:
The Defendant contends that that DIFC court has no jurisdiction to try the application for the Anti-Suit Injunction because neither of the parties is a DIFC Establishment.
By asserting that neither of the parties is a DIFC Establishment, the Defendant attempted to sever the dispute from the DIFC Courts' supervisory jurisdiction. However, jurisdiction in arbitration matters is frequently derived not from the corporate domicile of the parties, but from the seat of the arbitration and the proper law governing the agreement to arbitrate.
The Defendant’s secondary line of attack posited that even if the arbitration agreement was initially valid, it had been abandoned due to procedural failures at the Dubai International Arbitration Centre (DIAC). To evaluate this claim of abandonment, the court was required to apply the proper law—which it provisionally determined to be DIFC law. Under DIFC law, abandoning or terminating an arbitration agreement is not a casual affair; it requires a high threshold of proof and strict adherence to statutory termination mechanisms. Justice Michael Black KC outlined the rigorous standard required to prove termination:
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
The reliance on [Article 86(2) of the DIFC Contract Law](https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/arbitration/DIFC_ARB-009-2024_20240620.txt#:~:text=On%20a%20provisional%20basis%20(as) demonstrates why the proper law determination is so critical. Article 86(2) requires formal notice and a fundamental failure to perform. A party cannot merely point to administrative delays or institutional hiccups to claim that an arbitration agreement has been repudiated. The proper law provides the substantive shield that protects the agreement from opportunistic claims of abandonment.
In Narciso v Nash, the factual matrix surrounding the alleged abandonment involved specific procedural steps taken—and missed—at DIAC. The Defendant had actually initiated the arbitral process, submitting an application to the institution. The court scrutinized this action to determine its legal effect under the DIAC Rules:
I am of the view that the Defendant’s application to DIAC of 21 September 2023 was a valid Request for Arbitration within the meaning of Article 4.1 of the DIAC Rules as it satisfied all the relevant requirements as set out in detail at paragraph 11 above.
Despite submitting a valid Request for Arbitration within the meaning of Article 4.1, the arbitral process stalled. The Defendant attempted to weaponize this stall, arguing that the failure to progress the arbitration equated to an abandonment of the agreement itself. However, the court identified that the failure was purely financial and administrative, rather than a fundamental repudiation of the agreement to arbitrate:
What was not done was to make payment of the registration fee required by Article 1.1 of Appendix I to the DIAC Rules. Article 4.1 of the DIAC Rules states that if the Claimant fails to pay the registration fee, the Request shall not be registered by the Centre.
Failing to make payment of the registration fee required by Article 1.1 of Appendix I to the DIAC Rules prevents the specific Request from being registered by the Centre, but it does not vitiate the underlying arbitration agreement. The proper law distinguishes between a failure to comply with institutional mechanics and a fundamental breach of the contract to arbitrate. Because DIFC law governed the agreement, the Defendant’s failure to pay a registration fee could not be elevated to the status of a fundamental non-performance under Article 86(2) of the DIFC Contract Law. The arbitration agreement remained intact, and the obligation to arbitrate disputes—rather than litigate them in Sharjah—persisted.
The procedural posture of the June 14 Return Date hearing further underscores the utility of the proper law analysis. Because the court was evaluating an application to continue an interim anti-suit injunction pending a final Part 8 hearing, it was not required to conduct a full trial on the merits of the arbitration agreement’s validity. The proper law analysis only needed to satisfy the threshold for interim equitable relief. Justice Michael Black KC framed the inquiry through the established lens of English and DIFC interim injunction jurisprudence:
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
The American Cyanamid standard requires the applicant to demonstrate a serious issue to be tried. By establishing that DIFC law was the proper law of the arbitration agreement, and that under DIFC law the agreement had not been validly terminated or abandoned, the Claimant easily cleared this hurdle. The proper law determination provided the substantive foundation necessary to maintain the injunction, preventing the Defendant from exploiting the Sharjah courts while the DIFC Court finalized its jurisdictional review.
The tactical exploitation of seat ambiguity and proper law is a recurring theme in regional commercial litigation, frequently forcing the DIFC Courts to intervene to protect the integrity of arbitral agreements. Similar jurisdictional battles over the seat and the governing law of arbitration clauses have been extensively litigated, as seen in cases like ARB-006-2024: ARB 006/2024 Neville v Nigel, where parties attempt to leverage onshore proceedings to bypass their arbitral obligations. In Narciso v Nash, the court’s rigorous adherence to the proper law framework prevented the Defendant from using a minor administrative failure at DIAC as a pretext to launch parallel litigation.
Determining the proper law is critical because it dictates the rules of engagement for termination, abandonment, and validity. By anchoring the analysis in DIFC Contract Law, Justice Michael Black KC insulated the arbitration agreement from opportunistic attacks. The ruling reinforces the pro-arbitration stance of the DIFC Courts, demonstrating that a party cannot unilaterally abandon an arbitration agreement through administrative negligence and subsequently seek refuge in a parallel onshore jurisdiction. The proper law remains the ultimate arbiter of the agreement's survival, ensuring that the contractual promise to arbitrate is enforced with rigorous statutory precision.
How Does the DIFC Approach Compare to English High Court Practice?
The procedural architecture of the Dubai International Financial Centre (DIFC) Courts has long been heavily influenced by English common law, and Justice Michael Black KC’s handling of the interim relief in Narciso v Nash [2024] DIFC ARB 009 provides a textbook illustration of this continuing alignment. When the Claimant initiated the ex parte Urgent Application No. ARB-009-2024 dated 17 May 2024 seeking an interim anti-suit injunction, the court was immediately tasked with balancing the urgency of restraining parallel foreign litigation against the rigorous procedural safeguards required before restricting a party's access to a sovereign court. The resulting jurisprudence mirrors the English High Court’s methodology almost exactly, particularly in its reliance on established common law tests for interlocutory injunctions and its robust, pro-arbitration posture.
The most explicit doctrinal bridge to English practice in the judgment is the court's reliance on the American Cyanamid standard. In English commercial litigation, applications for interim injunctive relief under Section 37 of the Senior Courts Act 1981 are governed by the principles laid down by Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1. The primary threshold question is not whether the applicant will definitively succeed at trial, but merely whether there is a "serious issue to be tried." Justice Black explicitly imported this exact framework to evaluate the interim anti-suit injunction pending the final Part 8 hearing.
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
The reference to "Gee"—undoubtedly Steven Gee KC’s seminal text on Commercial Injunctions—further cements the DIFC Court’s reliance on English doctrinal authorities. By adopting the American Cyanamid standard, Justice Black avoided the trap of conducting a mini-trial on the merits of the jurisdictional dispute or the validity of the arbitration agreement at the interlocutory stage. The court recognized that the purpose of the interim order is to hold the ring and preserve the status quo, preventing the Sharjah proceedings from advancing to a point where the arbitration agreement would be rendered practically worthless.
However, the Defendant attempted to short-circuit this process by attacking the DIFC Court's jurisdiction directly, relying on the strictures of the judicial framework. The defense strategy hinged on the argument that the court lacked the necessary nexus to intervene.
The Defendant contends that that DIFC court has no jurisdiction to try the application for the Anti-Suit Injunction because neither of the parties is a DIFC Establishment.
This argument represents a common tactic in DIFC litigation: attempting to use the "opt-in" jurisdictional limits of Article 5(A)(2) of the Judicial Authority Law as a shield against the court's supervisory jurisdiction over arbitrations. The English High Court frequently faces similar jurisdictional challenges under Section 44 of the Arbitration Act 1996, where foreign parties argue that the English court lacks territorial jurisdiction to issue an anti-suit injunction. In both jurisdictions, the courts consistently reject such narrow interpretations when an arbitration agreement is at play. Justice Black dismissed the Defendant's application, Having found that the Court has jurisdiction to try the Claimant’s claim, thereby affirming that the DIFC Court possesses the inherent and statutory authority to protect arbitral proceedings, regardless of whether the parties are formally established within the financial centre.
This willingness to grant anti-suit injunctions reflects a deeply ingrained pro-arbitration stance that is the hallmark of the English Commercial Court. Ever since the landmark ruling in Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd's Rep 87, English judges have held that an injunction to restrain foreign proceedings brought in breach of an arbitration agreement should be granted almost as a matter of course, provided it is sought promptly and before the foreign proceedings are too far advanced. The DIFC Court has cultivated an identical philosophy. The continuity of this jurisprudence is evident when looking back at foundational cases such as ARB-010-2016: Hayri International Llc v (1) Hazim Telecom Private Limited (2) Hazim Telecom Limited [2016] DIFC AR, where the court similarly deployed the anti-suit shield to defend the integrity of the arbitral seat.
In Narciso v Nash, the stakes were exceptionally high, driven by a complex history of prior litigation. The urgency of the anti-suit application was underscored by the fact that On 13 July 2023, the Abu Dhabi Court of Cassation awarded the Claimant the principal sum of AED 17,816,932.25 plus interest. With such substantial sums already adjudicated in parallel forums, the risk of conflicting judgments and the dissipation of resources in the Sharjah courts necessitated immediate intervention. The DIFC Court's response was swift and decisive, issuing the ex parte injunction on May 20 and maintaining it through the return date.
To ensure the injunction had practical teeth, the court did not merely issue a prohibitory order; it issued mandatory directives compelling the Defendant to actively halt the foreign litigation. The order explicitly required the Defendant to Take all necessary steps required to maintain the adjournment of the Sharjah Proceedings until the final determination of the Part 8 claim. This layering of mandatory obligations within an anti-suit framework is a sophisticated procedural tool frequently utilized by English judges to ensure that foreign courts are not disrespected by unilateral withdrawals, while still holding the breaching party strictly to their contractual bargain to arbitrate.
The analytical depth of the DIFC Court's approach is further revealed in its handling of the proper law of the arbitration agreement. In English law, following the Supreme Court's decision in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, determining the proper law of the arbitration agreement is a critical prerequisite to assessing its validity and the availability of anti-suit relief. Justice Black adopted an identical analytical sequence.
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat). 41.
The Defendant attempted to argue that the arbitration agreement had been abandoned due to procedural missteps at the Dubai International Arbitration Centre (DIAC). Specifically, the defense highlighted that What was not done was to make payment of the registration fee required by Article 1.1 of Appendix I to the DIAC Rules. The Defendant posited that this failure to pay the registration fee invalidated the Request for Arbitration and, by extension, demonstrated an abandonment of the arbitral process, thereby justifying the parallel litigation in Sharjah.
Justice Black dismantled this argument by applying the substantive law of the DIFC, demonstrating how the court seamlessly integrates English procedural mechanisms (the anti-suit injunction) with local statutory law.
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
By requiring a formal notice of termination based on a fundamental failure to perform under Article 86(2) of the DIFC Contract Law, the court set a high bar for proving abandonment. A mere administrative failure to pay a registration fee at the outset of DIAC proceedings does not automatically vitiate the underlying agreement to arbitrate. This rigorous contractual analysis ensures that parties cannot easily escape their arbitration obligations through technicalities or manufactured procedural defaults.
The procedural management of the case also reflects English efficiency. After dismissing the Defendant's jurisdictional challenge and continuing the injunction, the court addressed the financial consequences of the interlocutory skirmish. Noting that The Claimant has prevailed in both applications and seeks its costs, Justice Black opted to reserve the costs to the final hearing of the Part 8 proceedings. This avoids the fragmentation of cost assessments and ensures that the financial liabilities are determined once the permanent injunction is fully litigated, a classic case management technique employed by the English Commercial Court to streamline complex cross-border disputes.
Ultimately, the DIFC Court maintains its autonomy while strictly respecting international standards of commercial dispute resolution. By anchoring its anti-suit jurisprudence in the American Cyanamid test and maintaining a fiercely pro-arbitration stance, the court provides a predictable, robust forum that international practitioners instantly recognize. The ruling in Narciso v Nash confirms that the DIFC remains a jurisdiction where arbitration agreements are aggressively protected, and where the procedural tools used to defend them are wielded with the same precision and authority as they are in the English High Court.
What Does This Mean for Practitioners and Enforcement?
The ruling in Narciso v Nash [2024] DIFC ARB 009 serves as a definitive doctrinal warning regarding the strict enforcement of institutional arbitration rules and the severe consequences of procedural complacency. For cross-border practitioners navigating the complex interplay between the Dubai International Arbitration Centre (DIAC) and the supervisory jurisdiction of the Dubai International Financial Centre (DIFC) Courts, the judgment establishes a clear mandate: formal requirements, particularly the payment of registration fees, are not mere administrative hurdles but foundational prerequisites for valid arbitral proceedings. Failure to strictly comply with these rules will be interpreted not as an administrative oversight, but as a substantive failure that can fatally undermine jurisdictional challenges and invite punitive measures from the bench.
The factual matrix of the dispute underscores the high stakes involved. The litigation is anchored by a substantial prior judgment, where the Abu Dhabi Court of Cassation awarded the Claimant the principal sum of AED 17,816,932.25 plus interest. Faced with the enforcement of this significant liability, the Defendant engaged in a strategy of parallel litigation in the Sharjah courts, prompting the Claimant to seek the protective shield of an anti-suit injunction (ASI) from the DIFC Court.
The procedural history reveals a pattern of delay tactics. After H.E. Justice Michael Black KC granted the initial without-notice ASI, he ordered that a Return Date hearing be held on notice on 27 May 2024. At that juncture, rather than addressing the substantive merits of the injunction, the Defendant requested more time to answer the injunction and simultaneously mounted a jurisdictional challenge. The core of the Defendant's argument rested on a narrow interpretation of the court's reach, asserting that the DIFC Court lacked authority because neither of the parties is a DIFC Establishment.
Justice Black KC systematically dismantled this jurisdictional objection, pivoting the analysis toward the Defendant's own procedural failures in initiating the arbitration. The court examined the Defendant's application to DIAC dated 21 September 2023. On its face, the court acknowledged that the submission constituted a valid Request for Arbitration within the meaning of Article 4.1 of the DIAC Rules. However, the critical failure lay in the execution of the financial prerequisites attached to that rule. The court identified a fatal omission that effectively nullified the request:
What was not done was to make payment of the registration fee required by Article 1.1 of Appendix I to the DIAC Rules. Article 4.1 of the DIAC Rules states that if the Claimant fails to pay the registration fee, the Request shall not be registered by the Centre.
14.
The doctrinal implication of this finding is profound. The DIFC Court treats institutional rules, once incorporated into an arbitration agreement, as binding contractual obligations. Article 4.1 of the DIAC Rules operates as a strict condition precedent to the commencement of arbitral proceedings. By failing to pay the registration fee, the Defendant did not merely commit an administrative error; they failed to legally initiate the arbitration. This failure stripped the Defendant of the ability to argue that they were actively pursuing the arbitral process, thereby weakening their opposition to the ASI. The court's strict construction of Article 4.1 signals to practitioners that institutional fee schedules are jurisdictional gatekeepers. A request for arbitration is legally inert until the requisite fees are cleared.
Compounding the failure to pay the registration fee was the Defendant's broader lack of procedural diligence. The transition of arbitral institutions following Dubai Decree No. 34 of 2021 created administrative complexities, but the court placed the burden squarely on the parties to ensure their filings were accurately processed. Justice Black KC noted a significant lapse in the Defendant's oversight of their own filing:
The Defendant did not pick up the error that DIAC was treating the arbitration as one that was not governed by its Rules when it had stated that it was seeking the appointment of an arbitrator under DIAC’s Rules.
76.
This passive approach to institutional administration is heavily penalized in the DIFC jurisdiction. Parties cannot rely on the administrative errors of arbitral centers to excuse their own lack of progress, nor can they weaponize such delays to justify parallel litigation in onshore courts. The expectation is one of proactive case management. The failure to correct DIAC's misclassification of the rules governing the dispute demonstrated a lack of genuine intent to arbitrate, further justifying the continuation of the anti-suit injunction to restrain the Sharjah proceedings.
The Defendant's strategy also involved an attempt to argue that the arbitration agreement itself had been abandoned or terminated, theoretically freeing them to litigate in Sharjah. To address this, Justice Black KC first had to establish the governing law of the arbitration agreement, a necessary step before evaluating any claims of termination or the propriety of injunctive relief:
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat).
41.
Having determined that DIFC law governed the arbitration agreement, the court applied a rigorous standard to the Defendant's claim of termination. The burden of proving that an arbitration agreement has been fundamentally breached and subsequently terminated is exceptionally high under DIFC jurisprudence. Justice Black KC outlined the specific statutory requirements that the Defendant failed to meet:
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
The invocation of Article 86(2) of the DIFC Contract Law requires explicit notice of termination grounded in a fundamental failure to perform. The Defendant's own procedural defaults—specifically the failure to pay the DIAC registration fee and the failure to correct the institutional error regarding the applicable rules—rendered their argument of termination untenable. A party cannot claim the other side fundamentally breached the agreement while simultaneously failing to execute the basic procedural steps required to invoke that very agreement.
In determining whether to maintain the interim ASI pending the final Part 8 hearing, the court relied on the established English law principles governing injunctive relief. Justice Black KC confirmed the applicable standard:
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the
American Cyanamid
basis. That is to say, am I satisfied that there is a serious issue to be tried?
By applying the American Cyanamid test, the court set a pragmatic threshold. The Claimant did not need to prove their case definitively at the interim stage; they only needed to demonstrate a serious issue to be tried regarding the validity of the arbitration agreement and the breach represented by the Sharjah proceedings. The Defendant's procedural missteps provided ample evidence to satisfy this burden, ensuring the injunction remained in place to protect the arbitral process.
The DIFC Court's approach in Narciso v Nash aligns with a broader jurisprudential trend of penalizing procedural obstructionism and bad faith tactics. This trajectory is well-documented in prior rulings, such as ARB-002-2015: Edward Dubai LLC v Eevi Real Estate Partners Limited [2015] DIFC ARB 002, where the court similarly demonstrated zero tolerance for parties attempting to derail arbitration through procedural gamesmanship. The message is consistent: the DIFC Court will utilize its supervisory powers, including anti-suit injunctions and adverse costs orders, to enforce compliance with arbitral agreements and institutional rules.
The financial consequences of such obstructionism are explicitly addressed in the judgment's conclusion. While reserving the final determination of costs, Justice Black KC signaled that the Defendant's failed applications would carry a significant financial burden, noting the considerable overlap between the costs incurred in the interim applications and the substantive Part 8 claim:
The Claimant has prevailed in both applications and seeks its costs. I have not heard submissions concerning costs and it seems to me that there will be a considerable overlap between the costs incurred in relation to these applications and those incurred in relation to the Claimant’s Part 8 claim.
For practitioners, the operational takeaways are absolute. Arbitration requests must be meticulously drafted, institutional fees must be paid concurrently with filing, and any administrative errors by the arbitral center must be aggressively corrected on the record. The DIFC Court will not allow a party to rely on its own procedural negligence to manufacture a jurisdictional dispute or to justify parallel onshore litigation. Strict compliance is the only recognized standard, and the failure to meet it will result in the swift application of the court's injunctive powers.
What Issues Remain Unresolved?
While the June 20, 2024 order delivered by H.E. Justice Michael Black KC secured a vital tactical advantage for Narciso, the broader jurisdictional war remains far from concluded. The issuance of the interim anti-suit injunction effectively freezes the parallel litigation in Sharjah, forcing Nash into a holding pattern under the strict threat of contempt. However, an interim order is inherently provisional. The core substantive disputes—namely, the final determination of the Part 8 proceedings, the ultimate allocation of the substantial costs incurred thus far, and the long-term doctrinal impact of Dubai Decree No. 34 of 2021 on the validity of legacy arbitration agreements—remain entirely unresolved. The battleground now shifts from the preservation of the status quo to a definitive adjudication on the merits of the arbitration agreement itself.
The most immediate unresolved issue is the final outcome of the Part 8 claim. The threshold for granting an interim injunction is deliberately lower than the standard required for a permanent order. At the return date hearing, the DIFC Court was not tasked with making a final, binding determination on whether the arbitration agreement had been frustrated or abandoned. Instead, the court operated under the well-established American Cyanamid principles, which merely require the applicant to demonstrate that the claim is not frivolous or vexatious. Justice Black KC explicitly delineated this constrained scope of review:
Given that, at this stage, I am considering an interim anti-suit injunction pending the hearing of the Claimant’s claim under Part 8 for a permanent injunction, as Gee emphasizes, I need only consider matters on the American Cyanamid basis. That is to say, am I satisfied that there is a serious issue to be tried?
By satisfying the "serious issue to be tried" test, Narciso successfully maintained the injunction, but this victory does not guarantee success at the final Part 8 hearing. At that stage, the court will demand a rigorous, substantive analysis of the arbitration agreement's enforceability. The Defendant, Nash, will have the opportunity to fully ventilate its arguments that the agreement is inoperable, moving beyond the prima facie standard to demand a definitive ruling on the balance of probabilities.
Central to this impending Part 8 showdown is the lingering shadow of Dubai Decree No. 34 of 2021. The Decree, which abolished the DIFC-LCIA Arbitration Centre and transferred its assets and caseload to the Dubai International Arbitration Centre (DIAC), has generated a wave of jurisdictional friction across the UAE. In Narciso v Nash, the Defendant weaponized this statutory disruption, arguing that the transition fundamentally altered the agreed-upon dispute resolution mechanism, thereby rendering the arbitration agreement invalid or abandoned. To address this, the court first had to identify the governing law of the arbitration clause itself, a prerequisite for any analysis of its continued viability. Justice Black KC noted the critical nature of this sequencing:
It is necessary to determine the proper law of the Arbitration Agreement in order to consider (1) the validity of the Arbitration Agreement and in particular to identify the seat of the arbitration, (2) the principles applicable to question as to whether or not the Arbitration Agreement has been abandoned, and (in any event) (3) whether to grant an anti-suit injunction (which will, at least in part, also depend on the location of seat).
The court provisionally determined that DIFC law governed the arbitration agreement. This provisional finding is highly consequential, as it dictates the legal framework within which the Defendant's abandonment arguments must be assessed. Under DIFC law, establishing the termination of a contract due to non-performance requires strict adherence to statutory notice provisions. The Defendant cannot simply point to the administrative chaos caused by Decree 34 or the Claimant's alleged delays in paying DIAC registration fees as de facto evidence of abandonment. The court laid out the stringent requirements that will govern the final Part 8 analysis:
On a provisional basis (as it must be), as DIFC is the proper law of the Arbitration Agreement, in order to establish that the Arbitration Agreement has been terminated, it would have to be shown that the Defendant gave notice of termination on the basis that the Claimant had fundamentally failed to perform the Arbitration Agreement having regard in particular to the matters set out at Article 86(2) of the DIFC Contract Law.
This reliance on Article 86(2) of the DIFC Contract Law sets a formidable evidentiary bar for the Defendant. At the final hearing, Nash will need to produce concrete evidence that formal notice of termination was served, specifically citing fundamental non-performance by Narciso. The mere failure to promptly pay a DIAC registration fee—an administrative hurdle exacerbated by the institutional transition—is unlikely to meet the threshold of fundamental non-performance required to unilaterally terminate a valid arbitration agreement. The final Part 8 judgment will therefore serve as a critical bellwether for how the DIFC Courts handle the long tail of Decree 34 disputes, determining whether recalcitrant parties can successfully use the abolition of the DIFC-LCIA to permanently escape their arbitral obligations.
Until that final determination is made, the mechanics of the interim order place a heavy burden on the Defendant. The order explicitly compels Nash to maintain the adjournment of the Sharjah Proceedings and to actively file any necessary documents with the Sharjah authorities to ensure the litigation remains paused. This creates a high-stakes holding pattern. If Narciso ultimately fails to secure a permanent injunction at the Part 8 hearing, the interim order will be discharged, and the Sharjah litigation will immediately resume. Such an outcome would plunge the parties back into the chaotic realm of parallel proceedings and conflicting judgments, precisely the scenario the anti-suit injunction was designed to prevent.
The DIFC Court's willingness to aggressively police the negative covenant of an arbitration agreement, even when the institutional rules have been statutorily altered, aligns with its broader trajectory of asserting supportive jurisdiction. This robust approach to protecting the arbitral process is increasingly common, echoing the jurisdictional assertiveness analyzed in ARB-005-2025: ARB 005/2025 Nashrah v (1) Najem (2) Nex. The courts are signaling a clear intolerance for parties attempting to bypass agreed arbitration clauses through opportunistic onshore litigation, utilizing the potent tool of the anti-suit injunction to enforce compliance.
Beyond the substantive legal questions, the financial sting of this multi-jurisdictional skirmish remains unresolved. The underlying dispute is not trivial; it stems from a protracted conflict involving an Abu Dhabi Court of Cassation award of AED 17,816,932.25. The legal fees incurred in securing the ex parte injunction, defending the return date, and fighting the jurisdictional challenge are undoubtedly substantial. Despite Narciso prevailing on both the interim injunction and the jurisdictional challenge, the court declined to make an immediate costs award. Justice Black KC recognized the inherent inefficiency of fragmenting the costs analysis at this interim stage:
The Claimant has prevailed in both applications and seeks its costs. I have not heard submissions concerning costs and it seems to me that there will be a considerable overlap between the costs incurred in relation to these applications and those incurred in relation to the Claimant’s Part 8 claim.
By ordering that All matters of costs are reserved to the hearing of the Part 8 proceedings, the court ensures a "winner-takes-all" scenario at the final trial. This reservation of costs significantly raises the financial stakes for both parties. It forces a strategic calculus: pushing the Part 8 claim to a full hearing now carries the risk of bearing the entirety of the costs for the entire injunction process, from the initial ex parte application through to the final judgment. For the Defendant, continuing to challenge the validity of the Arbitration Agreement in the face of the court's provisional findings represents a massive financial gamble.
Ultimately, the June 20 order in Narciso v Nash is a critical waypoint, but it is not the destination. The interim injunction successfully neutralized the immediate threat of the Sharjah litigation, but the foundational questions regarding the survival of legacy DIFC-LCIA agreements post-Decree 34, the strict application of DIFC Contract Law termination provisions, and the final allocation of substantial legal costs all await the crucible of the Part 8 hearing. The DIFC Court has drawn a line in the sand, but the final enforceability of that boundary remains to be tested.