On 24 April 2026, the DIFC Court of Appeal delivered what is understood to be the DIFC Courts’ first decision setting aside a DIFC-seated arbitral award. In Oheo Bank v Parker [2025] DIFC CA 006, the Court partly set aside a DIAC award ordering Oheo Bank to pay EUR 1 million because the Bank had not been given a fair opportunity to answer the decisive liability theory that emerged only in Parker’s post-hearing brief, although the Court declined to find that the theory fell outside the scope of the submission to arbitration.[1]
The Parties and the Vessel-Financing Dispute
Oheo Bank was Parker’s bank, the respondent in the arbitration and the appellant before the DIFC Court of Appeal.
Parker asked the Bank to help finance a vessel purchase through a transaction in which EUR 1.4 million would be used to acquire two corporate bonds, which were then intended to serve as collateral for a loan.[2] A dispute subsequently arose concerning the Bank’s role in the financing arrangements.
The EUR 1 Million Arbitration Award
Parker commenced arbitration against Oheo Bank, claiming that it relied on the Bank’s advice, that one of the bonds could not be used to secure the intended financing and was worthless, and that this caused Parker a loss of EUR 1 million, representing the amount it had paid for that bond.[3]
In November 2024, the majority of the tribunal awarded Parker EUR 1 million upon finding the Bank in breach of its regulatory duty to ensure that its communications were clear, fair and not misleading.[4]
The theory on which Parker succeeded differed materially from its pleaded case.[5] Parker had pleaded that the Bank gave misleading advice concerning the transaction.[6] In its post-hearing brief, however, Parker argued that, by asking it to sign the indemnity, the Bank had volunteered information about the bonds but had misleadingly omitted that they had been identified as illiquid and untradeable.[7] The majority accepted this theory and awarded Parker EUR 1 million.[8]
In its subsequent costs award, the tribunal unanimously acknowledged that the successful theory had never been pleaded and was first articulated in Parker’s closing submissions.[9] In its own post-hearing brief, Oheo Bank included the theory among approximately 20 points that it expressly identified as unpleaded.[10] It declined to address those points substantively but requested that the tribunal direct it to file a supplemental brief if the tribunal intended to consider them.[11] The tribunal gave no such direction.[12] The list was important because it showed that the Bank had expressly objected to the new theory and requested an opportunity to answer it; the Bank had not simply overlooked the point or chosen not to respond.[13]
The Bank’s Set-Aside Application Before the DIFC Court of First Instance
On 21 February 2025, the Bank applied to the DIFC Court of First Instance to set aside the parts of the award based on the successful theory. It argued that, by deciding the case on a theory raised only in Parker’s post-hearing brief without allowing the Bank to answer it, the tribunal had both denied the Bank a reasonable opportunity to present its case and decided a matter beyond the scope of the parties’ submission to arbitration.[14]
On 18 July 2025, the DIFC Court of First Instance dismissed the Bank’s set-aside application because it considered that Parker’s post-hearing brief merely drew new legal conclusions from factual material already before the tribunal, meaning that the Bank had not been denied a fair opportunity to respond and the tribunal had not exceeded the scope of the parties’ submission to arbitration.[15]
The Four Grounds of Appeal
The Bank then appealed to the DIFC Court of Appeal on four grounds: (i) that the award addressed a matter beyond the scope of the parties’ submission to arbitration; (ii) that the Bank had not been given a reasonable opportunity to present its case; (iii) that the judge had failed to give adequate reasons for rejecting those challenges; and (iv) that the related costs orders should consequently be set aside.[16]
Why the DIFC Court of Appeal Partly Set Aside the Award
The appeal largely succeeded.
Ground I (Scope of the Arbitration) Failed: The Court considered the entire record, rather than the pleadings alone, and concluded that the indemnity underlying the successful claim had been sufficiently “in play”. It therefore could not safely find that the tribunal had decided a matter outside the scope of the parties’ submission to arbitration.[17]
Ground II (Reasonable Opportunity to Present the Bank’s Case) Succeeded: Applying the high threshold under Article 41(2)(a)(ii) of the DIFC Arbitration Law, the Court held that the successful claim was a significant departure from Parker’s pleaded case. The Bank identified it as unpleaded and requested a supplemental brief if the tribunal intended to consider it, but no opportunity was provided. As the Bank had reasonably arguable defences that could have affected the outcome, the Court found “real unfairness or real practical injustice” and set aside the relevant parts of the award.[18]
Ground III (Inadequate Reasons) Succeeded: The first-instance judge had largely stated conclusions without explaining how or why they had been reached and had failed to address the dissenting arbitrator’s reasoning. This left the parties unable to understand the decision and prevented the Court of Appeal from reviewing the reasoning properly. The first-instance judgment was therefore set aside in full.[19]
Ground IV (Costs) Succeeded Consequentially: As the Bank was overwhelmingly successful in the appeal, the Court set aside the earlier costs orders and ordered Parker to pay the Bank’s costs before both the Court of First Instance and the Court of Appeal.[20]
Lessons for DIFC Arbitrations
The decision is a due-process ruling, not a return to strict pleading formalism. Its separation of jurisdiction from fairness is persuasive: a claim may fall within the tribunal’s mandate while the procedure used to decide it remains unfair. This protects arbitral flexibility without permitting trial by surprise.[21]
The key takeaways from the decision are as follows:
- For Parties: plead the legal and factual basis of each material claim and defence. If a new theory appears late, object precisely, explain what further evidence or submissions are needed, and request a defined procedural remedy.
- For Tribunals: if a potentially decisive theory emerges in closing submissions, identify it expressly and invite focused responses before deciding it. A short supplemental round can preserve both fairness and the award.
- For Set-Aside Applicants: establish more than a pleading defect. The applicant must show a lost opportunity to advance a reasonably arguable case that could have made a real difference.
Conclusion
Oheo Bank v Parker strengthens rather than weakens the DIFC’s arbitration-friendly framework. It preserves a high threshold for court intervention and a broad view of what may fall within the tribunal’s mandate, while confirming that finality cannot displace procedural fairness.
[1] Oheo Bank v Parker [2025] DIFC CA 006 at [2]-[6], [108]-[126], [168]-[169].
[2] Oheo Bank v Parker [2025] DIFC CA 006 at [18]-[20].
[3] Oheo Bank v Parker [2025] DIFC CA 006 at [20].
[4] Oheo Bank v Parker [2025] DIFC CA 006 at [5]-[6], [36]-[38].
[5] Oheo Bank v Parker [2025] DIFC CA 006 at [55], [62], [115].
[6] Oheo Bank v Parker [2025] DIFC CA 006 at [55], [62].
[7] Oheo Bank v Parker [2025] DIFC CA 006 at [39], [61].
[8] Oheo Bank v Parker [2025] DIFC CA 006 at [37]-[39].
[9] Oheo Bank v Parker [2025] DIFC CA 006 at [47], [49].
[10] Oheo Bank v Parker [2025] DIFC CA 006 at [63]-[64].
[11] Oheo Bank v Parker [2025] DIFC CA 006 at [63].
[12] Oheo Bank v Parker [2025] DIFC CA 006 at [112], [116(c)].
[13] Oheo Bank v Parker [2025] DIFC CA 006 at [112]-[113].
[14] Oheo Bank v Parker [2025] DIFC CA 006 at [10]-[13].
[15] Oheo Bank v Parker [2025] DIFC CA 006 at [10]-[11], [145]-[158].
[16] Oheo Bank v Parker [2025] DIFC CA 006 at [10]-[13].
[17] Oheo Bank v Parker [2025] DIFC CA 006 at [120]-[126].
[18] Oheo Bank v Parker [2025] DIFC CA 006 at [86]-[97], [109]-[119], [168(b)–(c)].
[19] Oheo Bank v Parker [2025] DIFC CA 006 at [162]-[169].
[20] Oheo Bank v Parker [2025] DIFC CA 006 at [170]-[173].
[21] Oheo Bank v Parker [2025] DIFC CA 006 at [108]-[126].