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What Changed — and Why British Businesses Should Care

Most businesses operating between the UK and the UAE think about legal risk in jurisdictional lanes. A dispute in London stays in London. An asset in Dubai sits behind the protection of a separate legal system. That assumption is no longer accurate.

In March 2025, Dubai enacted Law No. 2 of 2025, which came into force as the new DIFC Courts Law. Among its provisions, Article 15(4) codified a principle established by the DIFC Court of Appeal in November 2024 in Carmon Reestrutura v Cuenda [2024] DIFC CA 003: the DIFC Courts have freestanding jurisdiction to grant worldwide freezing orders in support of foreign proceedings, including proceedings pending before foreign courts, even where the respondent has no assets in the DIFC and no direct connection to it.

On 22 September 2025, the DIFC Court of Appeal confirmed that this jurisdiction survived the transition to the new law. In Trafigura PTE Ltd v Prateek Gupta [2025] DIFC CA 001, the respondents resided in onshore Dubai with no assets within the DIFC. Trafigura, pursuing claims in the English High Court for USD 650 million arising from an alleged nickel fraud, applied to the DIFC Courts for a UAE-wide freezing order. The Court of First Instance refused on jurisdictional grounds. The Court of Appeal overturned that refusal and confirmed that where foreign proceedings could ultimately yield a judgment enforceable in the DIFC Courts, the jurisdiction to freeze assets pre-judgment is available.

The implication is direct: a claimant with a good arguable case before the English courts can now approach the DIFC Courts to lock a counterparty's Dubai assets before any judgment is obtained in London.

How the Conduit Mechanism Works

To understand why this matters operationally, it helps to understand what the DIFC Courts call their "conduit jurisdiction." A foreign judgment from England and Wales, common law courts in Hong Kong, Singapore, or certain other recognised jurisdictions, can be brought before the DIFC Courts for recognition. Once recognised, it can be enforced against assets in onshore Dubai through the established protocol between the DIFC Enforcement Court and the Dubai Courts.

What Carmon and Trafigura confirmed is that the freezing power can be deployed before that judgment exists, in anticipation of it. The threshold requirements align closely with English law principles. An applicant must demonstrate a good arguable case on the merits, a real risk of asset dissipation before judgment, and that it is just and convenient to grant the order. Applications can be made ex parte in cases of genuine urgency.

For a British company with a commercial dispute against a UAE counterparty, this creates a powerful tool that did not previously exist in a form that was reliably accessible. It also creates exposure for businesses that have never considered themselves connected to the DIFC at all.

The Practical Exposure British Businesses Need to Assess

For UK businesses that are respondents in commercial disputes, whether arising from contract, fraud, or shareholder conflict, the question is no longer simply whether proceedings might be brought in the UAE. The question is whether any anticipated judgment against them, wherever obtained, could be recognised and enforced in the DIFC. If the answer is yes, a counterparty may apply to freeze UAE-held assets before that judgment arrives.

This has particular relevance for four categories of business:

Owners of Dubai real estate held in personal names. A commercial dispute in London, India, or Singapore can now trigger a pre-judgment freeze on a Dubai property. Personal ownership means personal exposure, and the freezing order does not stop at a corporate boundary that does not exist.

Founders and directors with onshore Dubai bank accounts. Where the underlying dispute involves fraud, unpaid debt, or breach of a cross-border contract, a UAE-based bank account is now reachable before any judgment is handed down.

Businesses with UAE subsidiaries. A dispute at the parent level in the UK may generate exposure at the subsidiary level in Dubai, depending on how assets are held and how the group is structured.

Joint venture counterparties. Where a joint venture partner is based in Dubai and a dispute arises under an agreement governed by English law, the DIFC jurisdiction is now a realistic interim enforcement option for the non-UAE party.

What This Means for Structuring Decisions

The change in law does not require any connection to the DIFC to trigger the jurisdiction. What it requires is that the eventual judgment be potentially enforceable through the DIFC Courts. English court judgments, common law judgments from Hong Kong and Singapore, and certain arbitration awards can meet that threshold.

For businesses that hold Dubai assets and carry commercial exposure across jurisdictions, the practical response is structural. A properly established DIFC holding structure, or a dedicated holding entity for UAE-held assets, creates a legal separation between the owner and the asset that personal ownership does not provide. That separation cannot be built quickly once a dispute has been identified. It needs to exist before proceedings are threatened.

In the context of M&A, joint venture structuring, and cross-border investment, asset protection architecture in the UAE should now be treated as part of pre-transaction due diligence, not an afterthought to be addressed if a dispute materialises.

The Limitation Worth Knowing

The jurisdiction is not unlimited. The courts have been clear that this power is not available simply because the DIFC Courts are geographically accessible. It requires that the applicant identify a foreign judgment capable of recognition and enforcement through the DIFC. The analysis is fact-specific.

For foreign-seated arbitrations in particular, the position remains less settled. A first instance decision in early 2026 declined to grant a worldwide freezing order in support of a Paris-seated arbitration where no DIFC-linked assets could be identified. The Court of Appeal's treatment of this question in future cases will clarify the outer boundary of the jurisdiction further.

A Note for BCCD Members

Many businesses represented by the British Chamber of Commerce Dubai operate across both the UK and UAE jurisdictions, with commercial relationships, assets, and dispute exposure spanning both. The change brought about by the new DIFC Courts Law and the Trafigura judgment is not a risk that will arrive with a formal notification. It will arrive as an urgent application to freeze an account or a property before a respondent has had any opportunity to respond.

The time to understand this exposure is before a dispute arises, not at the point of receiving service.

If your business holds assets in Dubai, has cross-border contractual exposure to UAE counterparties, or is planning a transaction involving UAE-based assets, a review of your current holding structure through the lens of this jurisdiction change is a practical first step.

Author: 

Ammara Kazmi  |  Managing Partner, AKAZIM Advocates & Legal Consultants

Registered DIFC Legal Practitioner  |  UAE, UK, HK & USA Legal Structuring

[email protected]  |  akazim.co