On March 14, amendments to the DIFC Law were adopted, which formally establish the supremacy of DIFC laws, prohibiting the enforcement of a foreign judgment if it does not comply with DIFC laws.
These provisions ensure that foreign courts or parties who do not wish to submit to the jurisdiction of the DIFC courts cannot circumvent the DIFC Trusts and Foundations Law. They provide that a fund or trust officer must cease to act with respect to the fund or trust if a foreign judgment has been entered against it, thereby preventing it from exercising the authority to manage assets under the foreign judgment.
The amendments provide additional guarantees regarding the prior transfer of property by the founder to the trust or foundation. A creditor of a trust or foundation must prove that the settlor intended to defraud the creditor in transferring property to the trust or foundation and that the transfer resulted in the settlor’s insolvency. Without this proof, the trust or foundation will be obligated to settle the creditor’s claim only to the extent of the share that previously belonged to the settlor.
A new protection was also the introduction of a three-year statute of limitations, limiting the initiation of cases in connection with the transfer of property to the foundation.