Member News

I have spent over a decade advising businesses on commercial disputes across the UAE. One of the most consistent frustrations I hear from clients, founders, investors, GCs, is this: they won. They have the judgment. And now they are stuck.

The UAE's multi-court system has always created friction at the enforcement stage. A DIFC judgment against a defendant whose assets sit in Sharjah, or whose business operations straddle both jurisdictions, has historically required navigating two separate institutional frameworks with different procedures, timelines, and levels of predictability.

In mid-June 2026, the DIFC Courts and the Sharjah Judicial Department signed a cooperation agreement that began to address that friction directly.

What the agreement covers

The MoU establishes a framework for sustained cooperation between two of the UAE's leading judicial institutions. It covers jurisdiction, service of process, and, most practically, the enforcement of judgments across the two systems.

This is not a merger of jurisdictions. DIFC Courts remain a common law forum. Sharjah's courts operate under the UAE civil law framework. What the agreement does is create a structured channel for communication, cooperation, and enforcement coordination between them, reducing the procedural uncertainty that has historically made cross-emirate enforcement a slow and often unpredictable exercise.

The agreement also provides for exchange of information on judicial technology, electronic case management, electronic court registration, signalling an intent to build interoperability at the institutional level, not just at the level of individual cases.

Why the timing matters

The numbers behind this agreement deserve attention.

The DIFC Courts handled 1,509 cases across all divisions in 2025, a 42% increase year on year, with total claims reaching AED 18.6 billion. The first quarter of 2026 showed a further 22% rise in claims from the same period a year earlier, with total claim value reaching AED 3.5 billion. The average claim value at the Court of First Instance stood at AED 25.6 million.

These are not small commercial disputes. This is high-value, high-stakes litigation growing at pace. And the enforcement challenge grows proportionally with the value of the claims.

Sharjah's economic profile adds further relevance. The emirate has developed a significant commercial base across manufacturing, real estate, education, and professional services. Businesses operating across the Sharjah-Dubai corridor, or holding assets in both, have always faced the question of which court system to trust with their disputes, and how reliably the other would cooperate at the enforcement stage.

That question now has a more structured answer.

What this means for commercial parties

For businesses with active commercial agreements, the practical implications fall into two categories.

First, dispute resolution strategy. When negotiating forum selection clauses in contracts with counterparties who have operations or assets in Sharjah, the DIFC Courts become a more defensible choice. The enforcement pathway into Sharjah's jurisdiction is now institutionally backed rather than procedurally improvised. That matters when drafting contracts and when advising clients on which forum to select for high-value disputes.

Second, existing disputes. For parties with DIFC judgments already in hand against defendants with Sharjah-side assets, the new cooperation framework may reduce the friction, and the cost, of cross-emirate enforcement. That is worth a conversation with counsel about whether the timing creates a practical opportunity.

The broader direction of travel

This agreement is part of a wider pattern. DIFC Courts have signed similar cooperation frameworks with judicial bodies across the UAE and internationally. The direction is consistent: building a network of institutional relationships that give DIFC-seated dispute resolution a deeper enforcement reach.

Combined with Dubai Law No. 2 of 2025's codification of the conduit jurisdiction mechanism, which allows DIFC judgments to be enforced in onshore Dubai without a merits review, the UAE is incrementally building the kind of enforcement architecture that serious international investors and lenders need before they commit capital to the region.

The gap between winning a judgment and actually recovering on it is narrowing. For businesses operating across this jurisdiction, that is a material development worth understanding before the next contract is signed.

Author: Ammara Kazmi Managing Partner, AKAZIM Advocates & Legal Consultants | UAE · UK · Hong Kong · USA