30 May 2021

Hadef & Partners in the Courts: Hadef & Partners successfully obtained recognition of a foreign bankruptcy judgment by Abu Dhabi Court

Authored by: Khalid El Sherif and Howrey Kamal

In brief

The case we handled relates to:

  • enforcement of a Dutch bankruptcy judgment in the UAE;
  • application of principle of reciprocity; and
  • requirements of competency, justice and public policy.

Background

The Court of Amsterdam in 2018 issued a judgment appointing a trustee for an international company, which had a branch in the UAE. The trustee instructed Hadef & Partners to obtain recognition of his appointment by the Court of Amsterdam from the Abu Dhabi Court in order to exercise his duties in the UAE as trustee of an insolvent company.

Hadef & Partners filed the case before the Abu Dhabi Court in accordance with Article 85 of the Cabinet Resolution No. (57) of 2018 Concerning the Executive Regulations of Federal Law No. (11) of 1992 on the Civil Procedure Law (the ‘UAE Executive Resolution’).

Reciprocity

The UAE and the Netherlands have not entered into an agreement to recognise and enforce court judgments. This means enforcement of judgments of one country in the other country is subject to the principle of reciprocity. Article 85 of the UAE Executive Resolution provides: “Judgments and orders issued in a foreign state may be ordered to be enforced in the State [the UAE] under the same conditions prescribed in the Law of that foreign state for the enforcement of judgments and orders issued in the State [the UAE].”  This means that if the foreign jurisdiction recognises judgments issued in other jurisdictions under certain conditions, the UAE courts will require such conditions and requirements to be met before granting a recognition judgment.

Hadef & Partners primarily relied on the Gazprombank case (2014) in which the Dutch Supreme Court set out the requirements for enforcement of a foreign judgment in the Netherlands, in addition to other provisions of Dutch and EU law, to prove the competency and jurisdiction of the Dutch Court which issued the bankruptcy judgment.

The Abu Dhabi Court assessed the requirements under the Gazprombank case (2014) and concluded that the requirements of: (i) competency; (ii) due process; (iii) jurisdiction; and (iv) public policy under Dutch law are similar to the requirements under Article 85 of the UAE Executive Resolution in respect of enforcing foreign judgments in the UAE.

Legal significance

The absence of a bilateral treaty between the UAE and a foreign jurisdiction does not necessarily prevent the enforcement of a foreign judgment in the UAE. The principle of reciprocity will be applied by the UAE courts if supported by relevant reciprocal provisions of the foreign jurisdiction and provided that the application is supported by appropriate documentary evidence.  If a foreign jurisdiction imposes stricter conditions for enforcing foreign judgments than the UAE, the courts in the UAE can impose such restrictions in furtherance of the conditions set out in Article 85 of the UAE Executive Resolution.

If you would like more information or have any question on the above, please contact Khalid El Sherif, Senior Legal Consultant or Howrey Kamal, Trainee Solicitor.