Damien P. Horigan. "The Birth of a New Jurisdiction: The Abu Dhabi Global Market." Paper to be presented at the Second Middle East Conference on Global Business, Economics, Finance and Banking to be held in Dubai in May 2015.

1. The Birth of a New Jurisdiction: The
Abu Dhabi Global Market
Damien P. Horigan
Associate Professor of Business
American University of Afghanistan
Kabul, Afghanistan
dhorigan@auaf.edu.af
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2. Abu Dhabi Global Market (ADGM)
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3. Al Maryah Island, Abu Dhabi
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4. United Arab Emirates (UAE)
• Federation of seven emirates with Abu Dhabi and
Dubai being the two main emirates
• Emerging market status
• High per capita GDP
• No foreign exchange controls
• Currency (UAE dirham) pegged to the US dollar
• Politically stable
• Good physical infrastructure
• Arabic as the official language, but English widely
spoken
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5. UAE (cont.)
• Strategic location at the crossroads of Africa,
Asia, and Europe
• Large airports in Abu Dhabi & Dubai
• Time zone (UTC/GMT +4 hours; no DST) partly
overlaps with normal office hours in East Asia
& Western Europe
• Workweek (Sun.-Th.) for many businesses
mostly overlaps with that of the West
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6. Financial Free Zones in the UAE
• Dubai International Financial Centre (DIFC)
• Abu Dhabi Global Market (ADGM)
• DIFC – open for more than 10 years
• Many banks, etc. present in the DIFC
• ADGM – only recently launched
• DIFC located near Emirates Towers
• ADGM located on Al Maryah Island
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7. Financial Free Zones (cont.)
• Special economic areas for wholesale banking
& finance
• Conventional & Islamic banking/finance
• 100% foreign ownership allowed
• No corporate income taxes
• No restrictions on the repatriation of profits
• English language used in administration
• Transactions in US dollars possible
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8. Financial Free Zones (cont.)
• Separate regulators in financial free zones:
• DIFC: Dubai Financial Services Authority
• ADGM: Financial Services Regulations Bureau
• Elsewhere:
• Central Bank of the UAE
• Securities & Commodities Authority
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9. Financial Free Zones (cont.)
• Special legal structures
• DIFC and ADBM as jurisdictions separate from
Dubai and Abu Dhabi, respectively
• Most UAE laws do not apply within the DIFC
• DIFC has its own legal system
• ADGM is setting up a similar legal system
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10. Common Law
• The common law as the basis for the legal
systems within both financial free zones
• The common law developed in England &
Wales and then spread to many parts of the
world due mostly to British colonialism
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11. Common Law (cont.)
• Despite once being British protectorates,
Dubai and Abu Dhabi were not common law
jurisdictions
• Some variation in the common law from one
jurisdiction to another e.g., England & Wales
vs. New York state
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12. Common Law (cont.)
• Key role of judges; precedent
• Several major financial hubs have common
law systems e.g., London, New York City,
Singapore, and Hong Kong.
• At least somewhat familiar to many bankers,
accountants, etc.
• Able to evolve over time with economic
changes
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13. Common Law (cont.)
• The common law selected for the DIFC to
attract foreign direct investment
• DIFC law is based on the common law, but
DIFC law is not identical to English law
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14. Common Law (cont.)
• DIFC has its own statutes & regulations
written in English
• ADGM statutes & regulations will also be
written in English
• Currently, ADGM laws are just a few drafts
posted on the ADGM website
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15. Court System of the DIFC
• DIFC Courts: Court of First Instance, Court of
Appeal, and Small Claims Tribunal
• Most judges are foreigners from England or
other common law jurisdictions with
experience in handling complex business
disputes
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16. Court System (cont.)
• Foreign lawyers may represent clients in the
DIFC Courts
• Open court proceedings in English
• No jury system
• Decisions published on the website of the
DIFC Courts
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17. Court System of the ADGM
• ADGM Courts have not yet begun to function,
but the ADGM’s judiciary will likely be similar
to the DIFC Courts
• Trial court & appellate court
• Some foreign judges are expected
• Foreign lawyers will probably be able to
represent clients in the ADGM Courts
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18. Law outside of the DIFC & ADGM
• “Mainland” UAE has a mixed legal system
based on Islamic law and the civil law tradition
of Continental Europe
• Islamic law in the UAE mostly limited to family
law and probate matters for Muslims
• Civil law (French/Egyptian influences) covers
most business law matters in the UAE
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19. Law (cont.)
• Statutes drafted in Arabic
• Problems with legal translation between
Arabic and English
• Local courts function in Arabic
• Documents in English need to be translated
into Arabic
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20. Law (cont.)
• Role of Islamic law confusing for non-Muslims
• Foreign lawyers normally cannot represent
clients in the local courts
• Some use of commercial arbitration for
business disputes to avoid the local courts
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21. Prospects for the ADGM
• Already has attracted banks and other
businesses
• Abu Dhabi’s wealth & economic growth
• Potential to become a major financial hub in
the Middle East
• Legal system could be a “selling point” for the
ADGM
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22. ADGM vs. DIFC
• The ADGM is likely to be similar to the DIFC
• Less than two hours by car from each other
• Will the two hubs complement or compete?
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23. Abu Dhabi Global Market Square
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24. Al Maryah Island as a mini-Manhattan
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25. Al Maryah Island at night
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26. Any questions?
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27. Thank you!
• All photos were taken by the author.
• Copyright © Damien P. Horigan, 2015
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