Yash Bheeroo and Ravi Jackson secure landmark ruling before the DIFC Court of Appeal in the first arbitral award ever set aside by the DIFC Courts

On 24 April 2026, the DIFC Court of Appeal handed down judgment in Oheo Bank v Parker [2025] DIFC CA 006 (in anonymised form). The decision is understood to be the first occasion on which the DIFC Courts have set aside an arbitral award pursuant to Article 41(2)(a)(ii) of the Arbitration Law (DIFC Law No. 1 of 2008) and establishes authoritative guidance on the principles that will govern challenges to DIFC-seated awards going forward.

The judgment is of particular significance because the appeal “raise[d] for the first time at an appellate level in the DIFC Courts a consideration of the principles underlying Arts. 41(2)(a)(ii) and (iii)” of the DIFC Arbitration Law (at [2]). These provisions empower the DIFC Courts to set aside an award where “…the party making the application…was unable to present his case…” (Article 41(2)(a)(ii)), and where “…the award…contains decisions on matters beyond the scope of the submission to Arbitration…” (Article 41(2)(a)(iii)).

Background

The appeal concerned a challenge to a DIAC arbitral award dated 1 November 2024 (the ‘Award’). In the Award, the Tribunal unanimously dismissed all of the Respondent’s claims against the Appellant, save for one claim for breach of regulatory duties on which a majority of the Tribunal found the Appellant liable in the sum of EUR 1 million (the ‘Successful Claim’). The third arbitrator dissented from the majority’s decision to find the Appellant liable, both as a matter of procedural fairness and on the merits of the Successful Claim.

In a subsequent award dated 30 January 2025, dealing with costs and interest, the Tribunal unanimously found that the Successful Claim had not been pleaded and had only been articulated for the first time in the Respondent’s Post-Hearing Brief. The Tribunal ordered the Respondent to pay the Appellant 75% of its costs of the arbitration.

The Appellant challenged in the DIFC Courts those parts of the Award by which it had been found liable on the Successful Claim. The challenge was dismissed at first instance; however, H.E. Chief Justice Wayne Martin granted the Appellant permission to appeal. The appeal was heard by H.E. Chief Justice Wayne Martin, H.E. Justice Sir Peter Gross and H.E. Justice Patrick Keane.

The DIFC Court of Appeal’s Decision

The Court of Appeal concluded that the Appellant had been denied a reasonable opportunity to present its case on the Successful Claim. It allowed the appeal and set aside those parts of the Award which had found the Appellant liable to the Respondent. This is understood to be the first case in which an arbitral award has been set aside by the DIFC Courts pursuant to Article 41(2)(a)(ii) of the Arbitration Law or at all.

In reaching that conclusion, the Court of Appeal conducted a thorough review of the principles applied in other common law jurisdictions, including those which have adopted the UNCITRAL Model Law, and provided authoritative guidance on the principles that will be applied by the DIFC Courts under the Arbitration Law (at [68]-[108]).

Key principles identified by the DIFC Court of Appeal

The following principles, which will be of significant interest to practitioners acting in DIFC-seated arbitrations and in arbitration challenges before the DIFC Courts, emerge from the judgment:

• The Court will be slow to intervene and, when it does so, it will not be seeking to find errors in an award (at [86(a)]). The starting principle is to minimise Court interference with arbitration, furthering the interests of arbitral autonomy and finality. This is reflected in the requirement that there be a high threshold for Court interference (at [86(b)]).
• The justification for intervention will not be formalistic or unduly influenced by the procedural rules of domestic litigation. The Court’s concern will lie instead with whether the applicant can demonstrate real unfairness or real practical injustice involving a failure to meet minimum standards of due process and substantive fairness. In such circumstances, the state will not lend its aid to enforcement of the award (at [86(c)]).
• An application to set aside an award is anything but an appeal on or a rehearing of the merits (at [86(c)]).
• Whether real unfairness or real practical injustice has been demonstrated requires a fact-specific inquiry and may well involve matters of degree (at [86(d)]).
• In respect of Article 41(2)(a)(ii) (inability to present one’s case):
  • A party must be provided with a reasonable opportunity to present their case. This does not need to satisfy a minimum requirement; it is a question of fact and degree and turns on the circumstances of the case (at [88]; [90]-[91]).
  • The purpose of Article 41(2)(a)(ii) is to protect a party from injustice, not from the consequences of its own decisions; it is not designed to ‘bail out’ parties who have made choices they come to regret. Accordingly, there is an important distinction between a party not having an opportunity to present its case and a party not recognising or taking an opportunity which exists to do so (at [89]).
  • The tribunal must give each party a reasonable opportunity to address all of the “essential building blocks” in its conclusion (at [94]; [115]; [116(a)]).
  • The tribunal is not slavishly constrained by the manner in which the parties’ arguments are formulated or articulated (at [96]). However, where the tribunal is impressed by a point that has never been in issue, it should draw the point to the parties’ attention so that they can address it (at [92]-[94]; [116(c)]).
  • To establish unfairness arising from the denial of a party’s right to be heard, the applicant is not required to establish that the outcome would have been different. It suffices to show that the submissions it would have made (had it been granted the opportunity to make them) were reasonably arguable and could reasonably (not fancifully) have made a difference (at [97]).
• In respect of Article 41(2)(a)(iii) (the scope of submission to arbitration):
  • The Court should not lightly intervene when faced with a challenge to an award based on the tribunal having exceeded its jurisdiction regarding the scope of the submission to arbitration. The reason is that the autonomy of the parties and, hence, the arbitral process is a matter of the first importance. It must be kept in mind both: (i) that ‘mere’ errors of law or errors of fact do not of themselves justify setting aside an award for excess of jurisdiction; and (ii) that there is an important distinction between the erroneous exercise of a power by a tribunal and the purported exercise of a power it did not have (at [108(a)]).
  • When an application does meet a high threshold, intervention may well be justified; a tribunal’s undue indulgence to one party regarding the scope of a submission to arbitration can readily entail unfairness to the other (at [108(b)]).
  • In deciding what is within the scope of a submission to arbitration, the Court should “look at matters in the round”, having regard to “five sources” to determine what issues or disputes are “in play”: (i) the pleadings; (ii) the list(s) of issues; (iii) opening submissions; (iv) evidence; and (v) closing submissions. Fact-specific questions of degree may well be involved. While pleadings are necessarily the starting point in delineating the scope of the submission to arbitration, they are not, or not necessarily, the finishing point (at [108(c)]).

In addition, the Court of Appeal allowed the Appellant’s appeal against the first instance judge’s decision on the basis of inadequacy of reasons. The Court of Appeal’s judgment contains a helpful summary of the principles governing appeals based on this ground ([129]).

The Court of Appeal’s judgment is available here.

Yash Bheeroo and Ravi Jackson, instructed by Payam Beheshti, Stuart Storry and Claire Rhodes of Simmons & Simmons (Middle East) LLP, acted for the Appellant in the underlying arbitration, at first instance, and in the Court of Appeal.