Abu Dhabi Court of Appeal Confirms ADGM Jurisdiction in Investment Dispute

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A recent Abu Dhabi Court of Appeal judgment provides useful guidance on the jurisdictional boundary between the onshore Abu Dhabi Courts and the Courts of the Abu Dhabi Global Market (ADGM).

The Court set aside a first-instance judgment on the merits and held that the onshore Abu Dhabi Courts lacked jurisdiction to determine the dispute. Jurisdiction instead belonged to the ADGM Courts.

The decision is particularly relevant to investors, financial institutions and businesses entering into transactions involving ADGM entities. It demonstrates that jurisdiction should be assessed by reference to the statutory gateways governing the ADGM Courts and the underlying connections between the transaction and the ADGM — not simply by where proceedings are first commenced.

Background

The dispute arose from investments made under two subscription agreements with a company incorporated in the ADGM.

The investor subsequently commenced proceedings before the onshore Abu Dhabi Courts seeking recovery of the invested capital, investment returns and compensation. Other entities and individuals connected with the transaction were also joined to the proceedings.

The Abu Dhabi Commercial Court of First Instance considered the merits of the dispute and entered judgment substantially in favour of the investor, including an order for repayment of the invested capital together with interest and compensation.

The judgment was challenged through three connected appeals. Among the grounds raised was that the dispute fell within the jurisdiction of the ADGM Courts rather than the onshore Abu Dhabi Courts.

The jurisdictional issue

The Court of Appeal treated jurisdiction as a threshold issue.

It referred to Article 13 of Abu Dhabi Law No. 4 concerning the Abu Dhabi Global Market, as amended, which identifies the matters falling within the jurisdiction of the ADGM Courts.

The statutory gateways include civil and commercial disputes involving the ADGM, its authorities or its establishments, as well as disputes arising out of or relating to contracts concluded, completed or performed wholly or partly within the ADGM, or incidents occurring wholly or partly within it. 

The Court also referred to the decision of the General Assembly of the Abu Dhabi Court of Cassation in Request No. 3 of 2026, dated 1 April 2026, concerning the jurisdictional gateways applicable to the ADGM Courts.

The Court looked at the transaction’s ADGM connections

The Court examined the subscription agreements and the legal and factual connections between the transaction and the ADGM.

It identified several relevant factors.

The investment claim arose fundamentally from two subscription agreements entered into between the investor and an ADGM-incorporated company. That company was established under ADGM laws and had its registered premises in Al Maryah Island within the ADGM.

The subscription agreements also provided that they were governed and interpreted in accordance with ADGM law. The Court further found that the relevant ADGM company was the principal contracting party under the subscription agreements and that the agreements were to be performed at its premises.

Against that background, the Court concluded that the statutory conditions for ADGM Court jurisdiction were satisfied.

Governing law and jurisdiction are distinct questions

An important feature of the judgment is that the Court did not treat the contractual choice of ADGM law, standing alone, as the source of ADGM Court jurisdiction.

The subscription agreements’ choice of ADGM law formed part of the contractual background, but the Court’s jurisdictional analysis was grounded in the statutory framework and the transaction’s substantive connections with the ADGM.

This distinction matters in practice.

A governing-law provision determines the body of law applicable to the contractual relationship. A jurisdiction provision determines the forum in which disputes are to be heard. They are related questions, but they are not interchangeable.

Parties should therefore avoid assuming that a governing-law clause necessarily resolves the separate question of jurisdiction.

Jurisdiction took precedence over the merits

The procedural consequence was significant.

The Court of First Instance had already considered the evidence, expert findings and substantive claims and had entered judgment on the merits.

Once the Court of Appeal concluded that jurisdiction belonged to the ADGM Courts, however, those substantive findings could not stand.

The Court therefore set aside the first-instance judgment and ruled that the onshore Abu Dhabi Courts lacked jurisdiction to hear the dispute.

The Court of Appeal did not substitute a new determination of the underlying investment claims. Its decision was jurisdictional.

That distinction is important: the judgment should not be understood as determining whether the investor was ultimately entitled to recover the investment or whether the substantive defences to the claim were valid.

Practical significance

The decision has practical implications for transactions involving ADGM entities.

Before proceedings are commenced, parties should examine not only the governing-law provision but also the identity and place of establishment of the contracting entities, where the contract was concluded or completed, where it was or was intended to be performed, and whether any other statutory ADGM jurisdictional gateway is engaged.

The judgment is also a reminder that jurisdiction should be analysed at the outset of a dispute. Substantial time and cost may otherwise be incurred litigating the merits before a court that is subsequently held not to have jurisdiction.

For transaction documents, governing law and jurisdiction should be addressed separately and deliberately. Clear drafting can materially reduce uncertainty when a dispute arises.

Conclusion

The Abu Dhabi Court of Appeal judgment reinforces an important principle in disputes connected with the ADGM: the correct forum is determined by the applicable jurisdictional framework and the underlying connections between the dispute and the ADGM.

In this case, the ADGM status of the principal contracting entity, the subscription agreements, their connection with performance within the ADGM and the wider statutory framework led the Court to conclude that jurisdiction belonged to the ADGM Courts.

For investors and businesses operating across the UAE’s onshore and financial free-zone jurisdictions, the decision is a useful reminder that governing law and jurisdiction are separate questions, and both should be considered before the transaction is signed and again before proceedings are commenced.

DISCLAIMER

This publication is provided for general information only. It does not constitute legal advice and should not be relied upon as such. The outcome of any matter will depend on its particular facts, documents and applicable law. Specific legal advice should be obtained before taking or refraining from taking any action.

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CATEGORY: Jurisdiction, Procedure & Appeals |
Commercial & Contract Disputes |
Arbitration, Enforcement & Interim Relief

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