The Right to be Heard in DIFC Arbitration – Lessons from Oheo Bank v Parker and Princeton v Persephone: Two Successful Applications to Set Aside DIFC-Seated Arbitration Awards

On 24 April 2026, the DIFC Court of Appeal, in Oheo Bank v Parker [2025] DIFC CA 006, set aside parts of a DIAC partial final award under Art. 41(2)(a)(ii) of DIFC Law No. 1 of 2008 (the “DIFC Arbitration Law”). It did so on the basis that Oheo (the respondent in the underlying arbitration) had been unable to present its case in answer to a claim first articulated in Parker’s (the claimant’s) post-hearing brief (“PHB”). This was the first time the DIFC Courts had considered Arts. 41(2)(a)(ii) and (iii) at appellate level.

Less than four months later, on 14 August 2026, the DIFC Court of First Instance (“CFI”), in Princeton v Persephone (ARB 015/2026, ARB 027/2026), applied that guidance to set-aside a DIAC award in its entirety. The CFI held both that Princeton (the respondent in the underlying arbitration) had been unable to present its case and that the award contained decisions on matters outside the terms of the submission to arbitration (Art. 41(2)(a)(iii) of the DIFC Arbitration Law).

This article summarises both decisions and draws out their practical lessons, for counsel and for arbitrators.

Oheo Bank v Parker (Court of Appeal)

Parker alleged that Oheo’s relationship manager advised a structure under which it paid EUR 1.4 million for two bonds to be used as collateral for ship finance, one of which proved worthless. Its pleaded claims in deceit, misrepresentation, breach of the Quincecare duty, breach of regulatory duties and negligence all failed. A majority of a DIFC-seated DIAC Tribunal nonetheless awarded EUR 1 million under Art. 94 of the DIFC Regulatory Law for breach of the Dubai Financial Services Authority duty to communicate information clearly, fairly and not misleadingly (COB 3.2.1, GEN 4.2.6). Drawing on Crestsign Ltd v National Westminster Bank [2014] EWHC 3043 (Ch), the Tribunal held that Oheo, by asking Parker to sign an indemnity without explaining that it was required because Oheo had identified the bonds as illiquid and untradeable, had volunteered information that was misleading because it was incomplete (the “Unpleaded Claim”). The Unpleaded Claim was not one of the pleaded regulatory breaches and was first raised in Parker’s PHB. In its PHB, filed sequentially, Oheo listed it among some 20 unpleaded allegations, declined to engage with the substance and invited a direction for a supplemental brief if the Tribunal wished to be addressed on the point. No direction was given. The CFI refused to set aside the Award.

The Court of Appeal set aside the relevant paragraphs of the Award under Art. 41(2)(a)(ii) ([110]–[118]). Oheo had been unable to present its case on the Unpleaded Claim, and its contributory negligence and assumption-of-risk submissions could realistically have made a difference to the outcome ([117]). “Very much on balance”, the Court rejected the Art. 41(2)(a)(iii) ground ([124]–[126]). In so doing, the Court emphasised on the one hand the broad consensus from leading common law jurisdictions on light-touch court supervision of international commercial arbitration, but on the other the entitlement of the supervisory court to intervene in cases where minimum standards of due process and fairness have not been met and there is real practical injustice or unfairness ([69]).

Further, in considering Oheo’s additional case on the terms of the submission to arbitration under Art. 41(2)(a)(iii), the Court declined to follow the approach in Singapore in CAJ v CAI [2021] SGCA 102, holding that in DIFC-seated arbitration pleadings are the starting point but not necessarily the finishing point to determine the issues “in play” between the parties; the court looks “in the round” at all five sources from which the scope of the submission can be determined; namely the pleadings, lists of issues, opening statements, evidence and closing submissions ([102], [108(c)]). In so doing, the court emphasised it had “no wish to lend undue encouragement to a trawl for pleading points, with a view to undermining awards in international commercial arbitration” ([121]).

Princeton v Persephone (Court of First Instance)

Princeton sold Persephone 65,000mt of ultra-low sulphur diesel. Persephone paid approximately 85% of the price, then stated the balance would follow only once its own buyers paid. Princeton treated that as repudiation and resold the cargo. In a DIFC-seated arbitration conducted on the documents only, Persephone admitted non-payment and argued principally that the payment term was a warranty, not a condition, so breach did not entitle Princeton to terminate. The Tribunal did not resolve whether the payment term was a condition. Instead, the majority found that the parties’ conduct left no agreed payment date and that there was no reason to doubt Persephone’s ability to pay, points Persephone had not pleaded. The Tribunal by a majority awarded Persephone USD 18.49 million.

The CFI set aside the whole Award under Art. 41(2)(a)(ii) and (iii) of the DIFC Arbitration Law. The Court described as “fundamental” the right of a party in a DIFC-seated arbitration to have a reasonable opportunity to submit evidence and make submissions on the issues between the parties. Therefore, a Tribunal minded to decide a case on an issue the parties have not raised must first give them the opportunity to consider the points in issue and to address them by evidence and submissions ([42]). Here the findings on conduct, payment date and ability to pay were first identified in the Award, despite Procedural Order No. 1 expressly reserving to the Tribunal a power to call for further submissions ([9], [45]–[47]). The terms of the submission to arbitration were confined to the four written documents, none of which raised these issues ([39], [49]).

The Court held that the unpleaded issues and responsive submissions available to Princeton, including the effect of the entire agreement clause and the missing elements of waiver or estoppel, went “to the very heart” of the majority’s reasoning and may well have made a difference to the Award ([50]). Severance was impossible because the unpleaded points formed the foundation of the Tribunal’s conclusions ([51]).

Persephone filed an Appeal Notice on 4 September 2026. At the time of writing, no there is no published decision on permission.

Lessons for Counsel:

1. During the arbitration, if in doubt, apply to replead your case to include any material unpleaded claim.
2. During the arbitration, identify any material unpleaded claim when “in play” without delay and object and/or request the right to be heard. Ensure you are not deemed to have waived the right to object under Art. 9 of the DIFC Arbitration Law.
3. During the arbitration, invite the Tribunal to make findings reflected in the costs Award as to whether a claim was or was not pleaded and/or was articulated for the first time later in the arbitration and/or in the opposing party’s PHB.
4. In a challenge to an Award, in relation to any unpleaded claim forming part of the Award, identify any material submissions that could have been made and why you had no opportunity to make them.
5. In a challenge to an Award, consider whether your grounds entitle you to challenge the whole or only part of the Award.

Lessons for Arbitrators:

1. Ensure each party has the right to be heard on any material issues.
2. Remember that the issues “in play” in a DIFC-seated arbitration may not be limited to those in the pleadings. Consider the case documentation and the parties’ opening and closing briefs “in the round”.
3. Identify any material unpleaded claims at the earliest opportunity and invite the parties’ submissions.
4. In particular, if your Procedural Order entitles you to direct further evidence and/or submissions on an unpleaded claim, use that power.
5. If you are unable to persuade your colleagues to ensure that a party has the right to be heard on any material issues, be prepared to issue a dissenting opinion on that point.