Out with the Old: Ontario Court Enforces Dubai Arbitration Award under new DIAC Rules

Why this Decision Matters

In InFrontier AF LP v. Rahmani, 2025 ONSC 3968, the Ontario Superior Court of Justice granted recognition and enforcement of an award rendered under different arbitral rules than agreed by the parties arising from a legislative change to the arbitral seat.  

The decision reaffirms Ontario’s commitment to the New York Convention and provides a timely reminder of the importance of drafting arbitration clauses with foresight, particularly in anticipating changes to legislation in the jurisdiction of the seat of arbitration. The decision also highlights the narrow scope of public policy and procedural fairness as grounds for resisting enforcement of foreign arbitral awards.

The Underlying Facts

The dispute arose from a 2020 loan agreement between InFrontier, a UK-based private equity firm, and two Afghan schools founded by Roeen Rahmani, a Canadian resident. The agreement included an arbitration clause specifying that any disputes would be resolved by arbitration instituted by the Dubai International Financial Centre (“DIFC”) under the rules of the DIFC-LCIA Arbitration Institute. When the schools defaulted on the loan, InFrontier commenced arbitration in Dubai, naming both the schools and Mr. Rahmani (as guarantor) as respondents.

In 2021 the Dubai government issued a decree abolishing the DIFC Arbitration Institute and  transferring its rights and obligations to the Dubai International Arbitration Centre (“DIAC”) and introducing new DIAC Arbitration Rules effective March 21, 2022 (the “Decree”). The arbitration in question was commenced after this date and was conducted under the new DIAC rules, with a sole arbitrator appointed by DIAC.

The arbitrator ultimately found in favour of InFrontier, which then sought recognition and enforcement of the award in Ontario. Mr. Rahimi objected to enforcement on the grounds that, among other things, the arbitration was not conducted in accordance with the arbitral rules specified in the loan agreement, namely the DIFC-LCIA Arbitration Rules; that he was not given a fair hearing; and that enforcement of the award would be contrary to public policy in Ontario.

The Superior Court’s Decision

To determine whether arbitral procedure was in accordance with the agreement of the parties, the Court examined the DIFC-LCIA Arbitration rules referenced in the loan agreement. Its preamble provided that any arbitration would be conducted under those rules “or such amended version of those rules as the DIFC-LCIA Arbitration Centre may have adopted hereafter to take effect before the commencement of the arbitration.”

The Court found that, pursuant to Article (8)c of the Decree, the DIAC Arbitration Rules became an “amended version” of the DIFC-LCIA Arbitration Rules as of March 21, 2022. As a result, the DIAC Arbitration Rules were effectively incorporated into the parties’ agreement, meaning that arbitration would proceed under the new rules unless the parties expressly agreed otherwise.

Since neither party had opted out of the DIAC Arbitration Rules after the Decree, the arbitration was properly conducted under that framework.

The Court also dismissed Mr. Rahmani’s arguments that the Award was contrary to Ontario public policy or that he had been denied a fair hearing. Mr. Rahmani claimed that the award would violate Ontario’s public policy because the arbitrator used rules the parties had not agreed to. He also submitted that the arbitration took place over an unduly compressed timeline.

The Court found that the arbitration was properly conducted, with a reasonable procedural timetable, opportunities for submissions on procedural matters, and reasoned decisions on requests for extensions and document disclosure. There was no evidence of procedural unfairness or prejudice.

Concluding Thoughts

This decision provides that in the context of international arbitration, changes in the institutional framework or procedural rules may not, on their own, justify a basis for refusing enforcement of a foreign arbitral award on the grounds that the arbitration was not conducted in accordance with the arbitration agreement.

For parties drafting arbitration clauses, this decision serves as a reminder to consider the impact of legislative or institutional rule changes when selecting the seat, institution and rules that will govern the arbitration.