17 Feb 2020

India is no longer a safe hiding place from UAE Judgments

Authored by: Adrian Chadwick and Mariam Al Mashehadani

In brief:

  • On 17 January 2020, the Indian Government issued a notification declaring the UAE to be a ‘reciprocating territory’.
  • Following this, most civil judgments issued by the UAE Courts will be recognised and deemed to be enforceable in India.
  • This is of benefit to the business communities in both India and the UAE as the mutual recognition and enforcement of judgments will provide greater certainty to those doing business in both countries.

Background and Summary

On 17 January 2020, the Indian Government, issued a notification declaring the United Arab of Emirates (UAE) to be a “reciprocating territory” in accordance with section 44A of the Indian Code of Civil Procedure 1908 (the Notification).

Following the Notification, most civil judgments issued by the UAE Courts will be recognised and deemed to be enforceable in the Republic of India (India) without scrutiny of the underlying case, as if the judgment had been delivered by an Indian Court. Thus, such UAE judgments will now be enforced in India as if they had been passed by the District Court by virtue of Article 44A of the Indian Code of Civil Procedure 1908.

The Notification means that most civil judgments issued by UAE Courts are now directly enforceable by the Indian Courts. As such, this amendment will now place UAE civil judgments in India in line with judgments originating from certain other jurisdictions, such as the United Kingdom, Singapore and Hong Kong. The exceptions to this rule are judgments relating to taxation or charges of an administrative nature (fines and penalties). Further, the Notification is not applicable to judgments from the UAE criminal Courts.

Notification and application process

The Notification applies to UAE judgments of the “Superior Courts” of the UAE. These have been identified as:

  • the UAE Federal Supreme Court;
  • all Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah;
  • the Abu Dhabi Judicial Department;
  • the Dubai Courts;
  • the Ras Al Khaimah Judicial Department;
  • the Abu Dhabi Global Market (ADGM) Courts; and
  • the Dubai International Financial Centre (DIFC) Courts.

The actual implementation process is currently unclear at this stage and we expect guidance to be provided following the first few test cases. Nonetheless, this Notification will be a relief to many creditors waiting to recoup past debts and to execute long-pending favourable UAE judgments, where offenders have fled to India for the purposes of escaping any outstanding debts.

In the past, enforcing such judgments in India had meant significant costs and time to the creditor as they had to file fresh proceedings with the Indian Courts, go through the standard procedure of obtaining a favourable judgment in the Indian Courts and then file an enforcement action against the debtor. Now, all the creditor needs to do is to commence enforcement proceedings in India, a far simpler and less costly and complicated exercise.

Indian judgments in the UAE

Indian Court judgments can be recognised and affirmed in the UAE under Article 85 of the Cabinet Resolution No.57 of 2018 concerning the Regulations of Civil Procedure Law or under the respective Laws and Procedures of the DIFC Courts, or the ADGM Courts.

The DIFC Courts in the UAE have gone into great lengths in order to facilitate the enforcement of Indian judgments. Indian judgments will continue to be enforced in the DIFC Courts provided that they are final and conclusive and that it does not relate to payment of taxes, fines or penalties and assuming that there is no successful challenge to the judgment.

Conclusion

The issuance of the Notification is of benefit to the business communities in both India and the UAE as the mutual recognition and enforcement of judgments will provide greater certainty to those doing business in both countries.

 
 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the developing jurisdiction of the UAE.