In the past, lessors have successfully obtained from the DIFC Courts orders grounding aircraft in Dubai airports, including DXB where lessees are in breach of their lease terms typically due to non-payment of rent or sanction breaches. This is despite the leases not expressly referring to the DIFC Courts in the jurisdiction provision but containing what is known as a “sweep up” jurisdiction clause allowing the lessor (at its option) to seek interim relief from any court of competent jurisdiction.
However, the DIFC Court of Appeal’s decision in the case of Sandra Holding v Al Saleh [2023] DIFC CA 003 meant that lessors could no longer seek such relief in support of foreign main claim proceedings where the lease in question makes no express reference to the DIFC Courts as having jurisdiction.
In late November 2024, the DIFC Court of Appeal in Carmon Reestrutura-Engenharia e Servicos Tecnios Especiais , (SU) LDA v Antonio Joao Catete Lopes Cuenda [2024] DIFC CA 003, overturned the restrictive approach taken in Sandra Holding and found that the DIFC Courts have the power to grant interim relief including freezing orders restraining a party from dealing with any assets whether located within the jurisdiction or not and whether or not there has been a claim for a final remedy of that kind. These powers exist to prevent the DIFC Court’s jurisdiction being thwarted including the jurisdiction to recognise and enforce foreign judgments. The Court of Appeal’s decision in Carmon to overturn the decision in Sandra Holding was made on the basis that it has the power to decide that one of its earlier decisions embodied an error of law that could impede the effective administration of justice.
Although the grant of a DIFC freezing order remains a discretionary remedy, the Carmon decision now opens the doorway again for lessors to seek interim relief to ground aircraft in Dubai through the DIFC Courts. The DIFC Courts can in practice be a far more favourable option over the onshore Dubai courts due to the speed at which the interim relief before the DIFC Courts can be obtained and enforced.
This firm has successfully secured a number of DIFC freezing orders that have been effective to ground and repossess aircraft in Dubai. Should you require any assistance in this area, please do not hesitate to contact Charlotte Bijlani or Haya Al Bawab.
