ADGM Jurisdiction Clarified: Key Principles from the Abu Dhabi Court of Cassation’s 2026 Ruling

Introduction

On 1 April 2026, the General Assembly of the Abu Dhabi Court of Cassation issued a landmark decision resolving long‑standing inconsistencies regarding the jurisdiction of the Abu Dhabi Global Market (ADGM) Courts. Issued under Article 9 of Law No. 6 of 2024 concerning the Judicial Department of Abu Dhabi, the ruling enhances legal certainty in commercial, corporate, and financial disputes and reinforces the Court’s role in unifying judicial principles across its chambers.

 

Background: Conflicting Judicial Approaches

Before this ruling, the Court of Cassation had delivered inconsistent decisions on when ADGM Courts could assume jurisdiction. One approach relied on the physical location of a company within ADGM‑designated areas such as Al Reem Island etc. Another required formal licensing or registration with ADGM authorities. These conflicting interpretations created uncertainty for businesses and practitioners, especially in hybrid onshore free zone transactions.

 

Legal Framework: Article 13 of the ADGM Law

The Court based its reasoning on Article 13 of Law No. 4 of 2013 (as amended by Law No. 12 of 2020), which governs the jurisdiction of ADGM Courts, sets out five independent jurisdictional gateways for ADGM Courts. These include disputes involving ADGM authorities, contracts performed wholly or partly within ADGM, events occurring within ADGM territory, appeals from ADGM authorities, and matters involving interpretation of ADGM regulations. The Court stressed that each gateway is autonomous, and satisfying any one of them is sufficient to establish jurisdiction.

 

Geographical Expansion and Its Limits

The Court acknowledged Cabinet Resolution No. 41 of 2023, which expanded ADGM’s geographic scope to Al Maryah Island and Al Reem Island. However, it clarified that physical presence alone does not confer ADGM jurisdiction. Jurisdiction arises only when geographical presence is accompanied by regulatory compliance, such as licensing or registration within ADGM.

 

Key Legal Principles Established Equal and Independent Jurisdictional Criteria

The Court confirmed that ADGM jurisdiction is established when any one of the statutory criteria is met. This clarification removes previous ambiguity and aligns ADGM practice with international commercial courts that rely on multiple, independent jurisdictional bases.

 

Bank Guarantees: Distinguishing Contractual Relationships

The ruling provides important guidance on bank guarantees. Where a dispute concerns enforcement of a guarantee linked to a contract performed within ADGM, the ADGM Courts have jurisdiction. However, disputes involving the issuing bank, given the autonomous nature of bank guarantees, fall within the jurisdiction of onshore UAE courts unless the parties agree otherwise.

 

This distinction reinforces the independence of bank guarantees under commercial law.

 

Corporate Jurisdiction and Licensing Requirements

The Court rejected the idea that mere geographic location within ADGM‑designated areas is sufficient. Instead, it adopted a regulatory compliance standard: ADGM Courts have jurisdiction only where the entity or branch is licensed or registered within ADGM. Jurisdiction does not extend to head offices or branches outside ADGM or to entities lacking ADGM authorization. This approach mirrors international financial center practices, where jurisdiction is tied to regulatory integration rather than physical presence.

 

Contractual Autonomy and Jurisdiction Agreements

The Court reaffirmed party autonomy. Parties may agree in writing to submit disputes to ADGM Courts, even if neither party has a direct connection to ADGM. They may also opt for arbitration seated in ADGM. This strengthens ADGM’s position as a regional and international dispute resolution hub comparable to the DIFC Courts and other global financial centers.

 

Practical Implications

For businesses, the ruling highlights the need for proper licensing and registration within ADGM if they intend to rely on ADGM jurisdiction. Operating within ADGM‑designated areas without regulatory compliance is insufficient.

 

For contract drafting, parties should clearly define jurisdiction, governing law, and the treatment of related instruments such as bank guarantees. Precision in drafting is now essential.

 

For financial institutions, the decision confirms that disputes involving issuing banks may fall outside ADGM jurisdiction even when the underlying project is located within ADGM territory.

 

Conclusion

This decision marks a turning point in UAE jurisprudence. By reconciling conflicting principles and adopting a structured, rule‑based approach, the Abu Dhabi Court of Cassation has strengthened legal certainty, enhanced predictability in commercial disputes, and reinforced the credibility of ADGM as a global financial and legal center. The ruling underscores the importance of regulatory compliance, careful contract drafting, and strategic jurisdiction planning when navigating the UAE’s dual court system.

 

Middle East Alliance Legal Consultancy

Middle East Alliance Legal Consultancy is well‑positioned to assist clients in understanding and applying the implications of this ruling. Our team advises on ADGM licensing, jurisdictional strategy, contract drafting, and dispute resolution before both ADGM and onshore UAE courts. For tailored guidance on how this decision may affect your business or contracts, our lawyers are ready to provide clear, practical, and commercially focused advice.