13 Sep 2022

Recognition and enforcement of foreign court judgments and foreign arbitration awards in the UAE

Authored by: Walid Azzam and Abdul Hannan Mian

In brief:

  1. A party that has a judgment or an award in a foreign jurisdiction may have various avenues available for enforcement in the UAE;
  2. The on-shore UAE courts and the DIFC court increasingly apply a robust regime for the recognition and enforcement of foreign judgments and arbitration awards;
  3. This regime also provides relief in the form of interim measures supportive of enforcement.

A number of strategies may be employed while undertaking recognition and enforcement of a foreign judgment or arbitration award. Choosing the right strategy depends on factors such as the jurisdiction where the decision was issued, availability of assets and so on.

Simply put, a foreign judgment or arbitration award, in order to become enforceable in the UAE, first needs to be recognized by the relevant UAE court. Only after a foreign decision is recognized can enforcement measures be initiated. 

UAE law also supports the grant of interim measures as a base for recognition and enforcement of foreign decisions as well as in support of on-going foreign proceedings, thereby providing a degree of assurance to litigants that their rights are preserved and enforceable in the UAE. The criteria to determine what measures are available, and under which jurisdiction, depends on the case specifics and the strategy may vary on a case-by-case basis.   

UAE Courts (on-shore)

Applications for recognition of foreign judgments and foreign arbitration awards are filed directly with the execution court. This provides a fast-track ex-parte procedure, whereby, provided that the application meets the required criteria, the judge generally issues a decision within 3 to 5 working days.

In terms of the UAE courts, the relevant Executive Regulations classify foreign judgments as “judgments and orders which have been issued by a foreign state which are capable of enforcement and execution in the UAE”.

Foreign money judgments endorsed by courts in a foreign jurisdiction can be recognised in the UAE and enforced onshore in the UAE courts in accordance with any treaty for mutual recognition and enforcement entered into between the UAE and the relevant foreign jurisdiction.

In terms of foreign arbitration awards, the Executive Regulations provide for ratification and enforcement in conformity with the provisions of the New York Convention, 1958. 

In the absence of a treaty, the Executive Regulations provide the substantive law and procedure for the enforcement of foreign judgments and arbitration awards.

Decisions issued in a foreign state can be enforced in the UAE under the same conditions of enforcement that apply to the law of the issuing jurisdiction. In other words, without a relevant treaty in force, there is a need for reciprocity between the UAE and the issuing state in respect of recognition and enforcement. Demonstrating reciprocity would include evidencing to the satisfaction of the UAE courts that an equivalent UAE decision would be enforced in the issuing state and not necessarily that a specific judgment has previously been enforced between the two States.

Other pre-requisites include that the UAE courts should not have had exclusive jurisdiction to hear the subject matter of the decision and that the foreign decision must not conflict with a judgment or order of the UAE courts, or be contrary to public order and morals. Additionally, the UAE courts would not enforce a default judgment or decisions made without notice.

This emphasizes the importance of proper service. The Executive Regulations explicitly require the UAE courts to verify that the parties to the proceedings in respect of which the foreign decision is issued have been served appropriately and given an opportunity to appear.

A litigant enforcing a foreign decision can request the UAE execution judge to issue directives to any natural or legal person, in addition to public and regulatory authorities, to disclose information relating to a judgment debtor’s assets that they may be aware of.

Interim measures in aid of enforcement, such as attachment and garnishment over assets, are available in certain cases.

DIFC Court

Previously, the UAE courts had ruled on a number of cases where demonstrating reciprocity on-shore was not straight-forward. Accordingly, we have seen parties seek recognition and enforcement of foreign judgments (rendered in jurisdictions that do not have a treaty with the UAE) through the DIFC court with the aim of subsequently enforcing on-shore in the UAE.

In terms of the DIFC court, a foreign judgment is “an award of a sum of money or other decision made by any court, tribunal, body or person other than the DIFC Court”. However, in practice it is seen that the various memoranda of guidance signed between the DIFC court and certain foreign courts provide for the enforcement of money judgments only, unlike the wider interpretation that the phrase “other decision” in the above definition could be extended to.

The DIFC Court Law provides for the recognition of judgments of any ‘recognized’ foreign court. In order for the judgment to be recognized, it must be final within the meaning of the common law rules. The DIFC court has entered into memoranda of guidance on the recognition/enforcement of judgments with courts of various jurisdictions including Singapore, Hong Kong, Malaysia, some courts of the USA etc. Moreover, in the absence of a treaty for judicial cooperation, the recognition and enforcement claim in the DIFC court proceeds as a plenary claim with a notice requirement providing an opportunity for the defendant to be heard. If certain criteria are met, the proceedings may also be determined by way of an immediate judgment application which is more straight-forward.

That said, for a judgment in absentia to eventually be recognized, it would be essential to demonstrate to the court that service was properly effected on the defendant.

The procedure for recognition and enforcement of regional judgments (pursuant to the Riyadh Convention or the GCC Convention) is slightly different and more streamlined, provided that the judgment meets the criteria of the Convention.

In terms of foreign arbitration awards, the DIFC Arbitration Law and the Rules of the DIFC court provide for an application for recognition (in conformity with the provisions of the New York Convention) to be filed with the DIFC Court of First Instance.

Once recognized, the foreign decision would become capable of enforcement within the DIFC as well as in the on-shore jurisdictions of the UAE. This is achieved by obtaining an ‘execution letter’ from the DIFC court. Enforcement on-shore is carried out in the same manner as that of any DIFC court judgment, decision or order if it is final and executory, legally translated into Arabic, certified by the DIFC court for execution and contains the execution formula affixed by the court.

Supportive measures, such as a party’s right to apply for an order directing another to provide information about location/information on assets and to request the court to summon a judgment debtor so they can be questioned under oath, are also available under the Rules of the DIFC court in certain cases.

Additionally, Freezing Orders (where applicable) provide interim relief to judgment creditors wishing to secure the assets against which they intend to enforce. These often impose an asset disclosure obligation and can operate in respect of assets within and outside the jurisdiction of the DIFC court- the latter called Worldwide Freezing Orders. Among a variety of interim injunctions, declarations and orders that the Rules of the DIFC court provide for, these are powerful tools available with the DIFC court in support of enforcement, both before and after the judgment/award is rendered.

There may be special considerations arising from the three-fold relationship and interests in play between the jurisdiction of the main proceedings, the jurisdiction of the DIFC court, and the jurisdiction of the place where enforcement is sought. This leaves judges with discretion to assess whether the circumstances allow the DIFC court to extend its ancillary order in aid of foreign decisions to assets located outside their jurisdiction and whether it is appropriate to do so. We have seen the court take differing views on a case-by-case basis depending on the facts and circumstances of each case.

Generally, it appears that the fast-evolving jurisprudence is indicative of an increasingly robust pro-enforcement regime in the UAE going forward. Whether to use a single or multi-pronged approach (combination of various options) may be decided while assessing the best approach to successful enforcement.  If you would like more information on this topic or Dispute Resolution in general, or have any question, please contact Dispute Resolution Partner, Walid Azzam, or Associate, Abdul Hannan Mian.

 
 

This article, together with any commentary, does not constitute legal advice. It is provided solely for information purposes on a complimentary basis, without consideration of any specific objectives, circumstances or facts. It reflects then current views of the writer which may modify in time and based on differing objectives, circumstances or facts. A writer's view may differ from views of colleagues and/or the firm. You should seek legal advice on each specific matter. Access to this article does not form an attorney-client relationship.