25 Jul 2024
The Abu Dhabi Global Market (ADGM) is an international financial centre and free zone situated in Abu Dhabi, United Arab Emirates (UAE). Established in 2013, ADGM's primary goal is to foster economic growth, financial services, and global trade in the region. It seeks to attract businesses, investors, and financial institutions by offering a regulatory environment conducive to business and top-notch infrastructure. ADGM operates with its distinct legal and regulatory framework, separate from the UAE's national laws. This enables it to provide a well-regulated environment in line with international standards, making it appealing for businesses and financial entities seeking a global financial hub. Setting up businesses within ADGM is streamlined, encompassing a range of business types including financial services and professional services. It provides specialized licenses catering to various business activities. ADGM houses diverse financial institutions, including banks, asset management firms, insurance companies, and investment funds. These entities benefit from a regulatory structure designed to encourage growth, innovation, and stability within the financial sector. Promoting innovation, particularly in fintech, is a focal point for ADGM. It has introduced initiatives supporting startups, incubators, and accelerators in the fintech and innovation sectors.
Strategically located in Abu Dhabi, ADGM capitalizes on the city's advantageous geographic position and well-developed transportation infrastructure, ensuring connectivity with international markets and financial centers. Through collaboration with global financial institutions, regulators, and industry bodies, ADGM has cultivated an international reputation. This contributes to its credibility and attractiveness as a destination for international business and investment. ADGM offers a combination of cultural attractions, modern amenities, and a high quality of life, benefiting from its location in Abu Dhabi. ADGM is designed to complement other economic zones like the Dubai International Financial Centre (DIFC) in the UAE, collectively striving to establish the country as a premier hub for financial services, business, and innovation on a regional and global scale.
For civil and commercial matters, ADGM has its own independent court system and legal framework, the ADGM Courts.
INTRODUCTION AND OVERVIEW OF THE ABU DHABI GLOBAL MARKET COURTS
The ADGM Courts are tasked with ensuring the fair and effective administration of justice within the ADGM jurisdiction. As a key feature of ADGM's legal ecosystem, the courts play a crucial role in maintaining legal certainty, promoting investor confidence, and facilitating international business transactions.
Different Jurisdictions of ADGM Courts:
The ADGM Courts consist of two main divisions: the Court of First Instance and the Court of Appeal. These divisions handle different stages of legal proceedings within the ADGM jurisdiction:
Court of First Instance: This division serves as the primary venue for initiating legal proceedings. It hears a wide range of civil and commercial cases, including disputes related to contracts, intellectual property, financial services, and more. The Court of First Instance is responsible for ensuring cases are properly managed, conducting trials, and rendering judgments.
Court of Appeal: The Court of Appeal serves as the appellate body for cases originating in the Court of First Instance. Parties dissatisfied with decisions made in the Court of First Instance can appeal to the Court of Appeal to seek a review of the decision on grounds of law or fact.
Legal Framework of ADGM Courts:
One distinctive feature of the ADGM Courts is that they apply the common law legal system, which is similar to the legal system used in the United Kingdom and many other English-speaking jurisdictions. Under the common law system, legal decisions and precedents from previous cases play a significant role in shaping the interpretation of laws and the outcomes of current cases. This common law heritage contributes to the predictability and consistency of legal outcomes in the ADGM jurisdiction.
The ADGM Courts operate under their own distinct legal framework, which includes the ADGM Court Procedure Rules 2016. These rules outline the procedures and practices that govern how cases are conducted, managed, and resolved within the ADGM Courts. The ADGM Court Procedure Rules 2016 are designed to ensure a fair, efficient, and transparent legal process that aligns with international standards.
Enforceability of ADGM Court Judgments:
The judgments rendered by the ADGM Courts, operating under the common law system, are recognized for their legal rigor and adherence to established principles. However, as with judgments from the United Kingdom's legal system, ADGM Court judgments are not automatically enforceable outside of the ADGM jurisdiction. ADGM's legal framework and commitment to international best practices contribute to the recognition of its judgments by parties around the world. Parties seeking to enforce ADGM Court judgments abroad may do so through the legal processes available in the relevant foreign jurisdiction.
OFFERS TO SETTLE UNDER ADGM COURTS PROCEDURES
Part 18 "Offers to Settle" of the ADGM Courts Procedure Rules 2016 provides a structured framework for parties to propose, accept, and manage settlement offers. These rules ensure transparency, fairness, and efficiency in resolving legal disputes within the ADGM jurisdiction. We have listed certain key elements to take into consideration, as per said Part 18.
Part 18 begins by emphasizing the autonomy of parties to make settlement offers in their preferred manner, provided they adhere to the stipulations outlined in the subsequent rules.
Within this framework, key definitions are established to establish a common understanding of terms. These include concepts like "Part 18 offer," which refers to an offer made in accordance with the procedures outlined in the document, and "trial," which denotes any court proceedings involving the determination of a case's issues. The distinction between a trial in progress and a decided case is clarified, and the roles of the trial judge and other judges allocated for trials are defined for clarity.
Crucially, Part 18 defines the "relevant period" for making and accepting offers. This period is determined by various factors, including the timing of an offer in relation to the trial date. Offers made not less than 21 days before a trial are subject to a specified period or a longer period as agreed by the parties. Offers made otherwise, or within 21 days of the trial, are bound by the period up to the end of the trial.
Part 18 further extends the application of these rules to appeals, where the consequences of a Part 18 offer relate exclusively to the costs of the proceedings for which the offer was made. However, when such offers are made in appeal proceedings, the terms are adjusted to suit the context of appeals. This distinction ensures that the rules maintain consistency and effectiveness across different stages of legal proceedings.
Confidentiality plays a crucial role in settlement offers. A Part 18 offer is treated as "without prejudice save as to costs." This principle underscores the confidential nature of the offer's terms and prohibits their communication to the trial judge until the case is decided. Exceptions are outlined, such as cases involving a tender before claim, stays following offer acceptance, mutual agreement, or when only parts of a case are decided.
ADGM Courts Procedure Rules clarify who can make Part 18 offers and under what circumstances. Such offers can be made by both claimants and defendants in relation to various components of a claim, including the entire claim, specific parts, or individual issues. The flexibility of timing is highlighted, as these offers can be made before the commencement of proceedings. Part 18 defines the moment when an offer is considered to be made, ensuring clarity on offer initiation.
In terms of form and content, the text stipulates specific requirements for Part 18 offers. These include adherence to a prescribed form, the explicit indication that the offer is pursuant to Part 18, specification of a minimum acceptance period, and clear communication of the consequences of accepting the offer. The text further mandates the indication of whether the offer pertains to the whole claim, parts of it, or specific issues, as well as whether it considers any counterclaims.
A mechanism for seeking clarification of Part 18 offers is introduced. The offeree is granted a seven-day window after an offer is made to request clarification from the offeror. If clarification is not provided within seven days of the request, the offeree may apply for a court order compelling the offeror to clarify, as long as the trial has not commenced.
Part 18 outlines procedures for withdrawing or altering the terms of a Part 18 offer. Offers can be withdrawn or altered if the offeree has not previously served notice of acceptance. Withdrawal or alteration is carried out through written notice served on the offeree. The effectiveness of such notice is determined by the date of service. Exceptions are made for cases where the relevant period has expired, allowing the offeror to modify terms or withdraw offers without court permission.
For unaccepted Part 18 offers, Part 18 presents rules that apply when a claimant fails to secure a more advantageous judgment than a defendant's offer or when a judgment against the defendant is at least as advantageous as the claimant's offer. The consequences of these scenarios are outlined, and exceptions are provided for withdrawn offers, altered terms, and offers made shortly before trial.
Part 18 addresses the context of personal injury claims and provisional damages. It stipulates that specific rules and additional information must be included in Part 18 offers related to such claims. The distinction between lump sum and periodical payments, as well as the role of practice directions, is highlighted in these cases.
Provisions for making payments into court under court orders are established. Parties making payments are required to notify other parties and file certificates of service. Part 18 introduces the concept of a defence of tender before claim, which mandates a defendant to make a payment into court before invoking this defence. This principle ensures fairness in cases where a defence of tender before claim is employed.
Finally, Part 18 clarifies the conditions under which payments made into court can be withdrawn. A court's permission is generally required for withdrawing payments, except when permitted by a relevant practice direction. These regulations underscore the importance of judicial oversight and prevent arbitrary withdrawal of court-allocated funds.
CONCLUSION
In conclusion, Part 18 presents a comprehensive and structured framework for managing settlement offers and associated procedures within ADGM Courts. Our article has navigated the intricacies of making, accepting, and altering Part 18 offers while ensuring fairness, transparency, and clarity in the negotiation process. By defining terms, outlining consequences, and detailing exceptions, ADGM Courts Procedure Rules have created a solid foundation for parties to engage in meaningful settlement discussions. Throughout Part 18, the principles of autonomy and confidentiality emerge as key pillars. Parties are granted the flexibility to initiate settlement offers according to their preferences while adhering to prescribed procedures, thereby fostering a balanced and cooperative approach to dispute resolution. The "without prejudice save as to costs" principle underscores the confidentiality of offers, allowing parties to negotiate freely while ensuring that offers do not prejudice their positions in the broader legal context.
Further, Part 18 emphasizes on timing and specificity is evident in its requirements for form and content of offers. By mandating the inclusion of essential details, such as acceptance periods and consequences, ADGM Courts framework promotes clarity and informed decision-making. Furthermore, provisions for clarification of offers and withdrawal or alteration mechanisms cater to the dynamic nature of legal negotiations, enabling parties to engage effectively while maintaining transparency. Incorporating considerations for appeals, personal injury claims, provisional damages, and payments into court, the ADGM Courts demonstrate their adaptability across diverse scenarios. By addressing these distinct contexts, ADGM Courts reflect their commitment to fairness and equity while maintaining the core principles of settlement offers.
For more information about the different sectors operating within the economic landscape of ADGM, check out our sections on Banking and Finance and Capital Markets.