DIFC Court Annuls DIAC Award for Unpleaded Reasoning
A Dubai International Financial Centre court set aside an entire arbitral award for the first time after finding the tribunal decided the case on legal arguments the parties themselves had never raised.
The Dubai International Financial Centre (DIFC) Court of First Instance has set aside a Dubai International Arbitration Centre (DIAC) arbitral award in its entirety, finding the tribunal decided the dispute on legal grounds that had not been pleaded or argued by the parties. In Princeton v Persephone, the court held that the tribunal's reliance on unargued theories of waiver and estoppel denied the applicant a reasonable opportunity to present its case, a fundamental tenet of procedural fairness.
The judgment is significant as it is the first time the CFI has annulled a complete award on these grounds, applying a standard recently established by the DIFC Court of Appeal in Oheo Bank v Parker. This precedent confirms that while the threshold for judicial intervention remains high, DIFC courts will act to correct clear procedural injustices. The decision is a critical reminder for arbitrators to base their awards strictly on the cases presented by the litigants. For parties and their counsel, it highlights the potential, albeit narrow, to challenge awards where a tribunal has fundamentally departed from the pleaded dispute without offering the parties a right to be heard on the new issues.