Amazon among brands using DIFC Courts to resolve disputes

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• Small Claims Tribunal seeing Amazon customer cases
• Rise in cases since pandemic and surge in demand for e-commerce

E-commerce giant Amazon is one of a growing number of major companies citing the DIFC Courts in its sales terms and conditions as the venue to resolve disputes with customers and third party resellers.

Established in 2004 as the English-language, independent, common law legal system for the Dubai International Financial Centre (DIFC) free zone, the DIFC Courts saw its jurisdiction expanded in 2011 to include any businesses which agreed to use it as the venue for resolving arguments.

“In the Small Claims Tribunal, we do have a number of companies that tend to use us on a regular basis because they’ve opted in. One of those key players is Amazon,” Ayesha Bin Kalban, acting registrar at DIFC Courts, told AGBI.

“So, if anyone tries to make an Amazon purchase, and a dispute arises out of that purchase, that user would be able to bring a claim in the Small Claims Tribunal against Amazon or the third party reseller,” she added.

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The Small Claims Tribunal (SCT) of the DIFC Courts was established in 2007 and hears disputes where the amount or value of the claim does not exceed AED 500,000 ($136,147). The fee for filing a claim is five percent of the value of the claim, with a minimum fee of $100.

Amazon has cited the DIFC Courts as the venue for disputes related to “any products or services sold or distributed by Amazon or through Amazon.ae”.

The terms and conditions on its UAE website state that “the SCT shall have exclusive jurisdiction to settle any such dispute. For disputes that do not qualify for determination through the SCT, the courts of the DIFC shall have exclusive jurisdiction to settle such dispute and each party submits to the exclusive jurisdiction of the courts of the DIFC.” 

A DIFC Courts spokesperson said it started seeing Amazon-related cases coming before the SCT in 2020 and examples of the type of cases include those related to mobile phones lost in transit, refund demands, or buyers looking to make a claim against a third-party reseller.

The total number of cases that have come before the DIFC Courts across all its divisions grew 10 percent year-on-year in the first half of 2022, with a total value of AED 1.9 billion.

Within the SCT there was a total of 263 claims filed, an increase of 31 percent year-on-year, with an overall claim value totaling AED 23.8 million, a 16 percent increase compared to the first six months of 2021.

The option in 2011 to allow companies outside the DIFC to use the courts to resolve disputes has resulted in more companies like Amazon including the DIFC Courts in their contract terms and conditions.

“In 2011 we were really keen to see the success rate but 2018 and 2019 was when we started seeing a huge amount of opt-in cases,” Amna Al Owais, chief registrar of the DIFC Courts, said.

“On average in the last five years, 50 percent of our cases across the Small Claims Tribunal are coming from opt-in.”

Amazon declined to comment when contacted by AGBI or when it first included the DIFC Courts clause in its terms and conditions, but it is no surprise that cases have risen since 2020 as the coronavirus pandemic was a major catalyst for the UAE’s surge in demand for e-commerce.

The UAE’s online retail sector is forecast to be valued at $8 billion by 2025, up from $5 billion in 2021 and $2.7 billion in 2020, according to a report published in March by e-commerce hub EZDubai and global research firm Euromonitor International.

Amazon is expanding rapidly in the UAE and announced in September last year it planned to create 1,500 direct and indirect jobs in the UAE as it increased its footprint in the country.

German company ecommerceDB estimated that Amazon is the largest e-commerce operator in the UAE with net sales of around $500 million in 2021.

A DIFC Courts spokesperson said it knew of other UAE industry players who have included the courts in their dispute contract clauses, but until a claim is filed it would be inappropriate to name any.