Dubai's government has established a new law allowing regional and foreign firms to file disputes with the emirate's English-language Dubai International Financial Centre (DIFC) Courts, state media reported.

Prior to the decree by Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, only companies based in Dubai's free zones, including the DIFC business hub, could use the DIFC Courts which fall under British common law.

All other companies were required to use the emirate's Arabic-language government courts to resolve business disputes, a longstanding option that some in the business community were unhappy with.

"The importance of this change is that our courts are now available to all who wish to choose us as their preferred forum for resolution of their disputes, and now widens the choice of forum for businesses in Dubai and elsewhere," said Chief Justice of the DIFC Courts Michael Hwang.

Expanding the DIFC Court's jurisdiction will allow for more predictable enforcement of contracts, said Benjamin Newland, a partner at law firm King & Spalding.

"The DIFC Courts ... common law system has been appealing to the business and legal community," he said. "The system outside isn't always as easily adaptable to novel structures or to the varied demands of parties."     

The issue of jurisdiction has been in focus recently after a special tribunal set up during Dubai's 2009 debt crisis said it would no longer hear cases against property developer Nakheel, a unit of conglomerate Dubai World.        

Nakheel, which was taken over by the Dubai government this year as part of the Dubai World restructuring plan, is facing several legal battles related to its $16 billion restructuring.

A flurry of cases were filed in the special tribunal before Nakheel was taken over by the government in August amid concerns that future claims would be heard by local Dubai courts that do not abide by British common law. - Reuters