04 Mar 2024

Enforcement of Foreign Judgments in the UAE - revisited

Authored by: Dr. Faraj Ahnish

In Brief

  • The United Arab Emirates is often referred to as the “busiest economy in the Middle East”. This has been a major factor in the drive towards reforming the UAE legal platform. Recent UAE case law has taken cognizance of the objectives of these legislative reforms and cases have been decided accordingly.
  • One major development in this regard is in the field of enforcement of foreign court judgments and arbitration awards.
  • This article aims to provide a high level view of recent legislative reforms in the context of enforcement of foreign judgments, including a brief analysis of recent UAE court practice in this regard. Reforms on enforcement of arbitration awards will be the subject of a separate article as the obligations of the UAE in that respect arise mainly as a result of the UAE ratifying the New York Convention on the Recognition and Enforcement of Arbitral Awards, on 19 November 2006 and adoptive legislation enacted by the UAE.

The law governing the enforcement of foreign court judgments in the UAE is enshrined in the new Federal Civil Procedures Law, which came into force on 2 January 2023 (the “NCPL”). The NCPL repealed the previous Civil Procedures Law (Federal Law No 11 of 1992, as amended by repealed federal executive regulations (the “Executive Regulations”)), which governed the procedures followed by UAE civil courts, and introduced significant changes to the rules of civil procedure in the UAE

While the repealed Civil Procedure Law was previously amended several times (through the promulgation of Executive Regulations), it has now been consolidated and re-enacted as one compendious Federal Law incorporating all relevant Executive Regulations into the body of the law itself.

The enforcement of foreign judgments by the onshore UAE courts is now addressed in Chapter IV (Articles 222 to 225) of the NCPL. Article 222 essentially mirrors, verbatim, the requirements for enforcement of foreign judgments, which were previously set out in Article 85 of the Executive Regulations.

However, the fact that the provisions contained in the Executive Regulations have now been re-enacted as part of the main body of the NCPL rather than as delegated/subordinate legislation, is significant because it means that the rules contained in the Executive Regulations are now part of the NCPL, and will, therefore, prevail over subordinate legislation, general federal legislation and legislation enacted by the member Emirates in accordance with Article 151 of the UAE Constitution, which provides as follows:

“The provisions of this Constitution shall prevail over the Constitutions of the member Emirates of the Federation and the Federal laws which are issued in accordance with the provisions of this Constitution shall have priority over the legislations, regulations and decisions issued by the authorities of the Emirates. In case of conflict, that part of the inferior legislation which is inconsistent with the superior legislation shall be rendered null and void to the extent that removes the inconsistency. In case of dispute, the matter shall be referred to the Federal Supreme Court for its ruling.”

Under Article 222 of the NCPL, an application for the enforcement of a foreign judgment may be filed before the execution judge of the court of competent jurisdiction. The execution judge may, after due consideration, issue an order for enforcement on the same conditions laid down in the law of the foreign country for the execution of judgments issued in the UAE

The execution judge shall issue his order within (5) five working days from the date of the enforcement application. The execution judge’s order is subject to appeal in accordance with the rules and procedures prescribed for appealing UAE judgments.

An enforcement order may not be passed unless the following conditions precedent are satisfied:

  1. The Courts of the UAE have no exclusive jurisdiction to try the dispute in which the order or judgment was made, and the foreign courts which issued it have jurisdiction over the matter in accordance with the rules governing international judicial jurisdiction laid down in foreign court’s law;
  2. The judgment or order was issued by a court having jurisdiction in accordance with the law of the country in which it was issued and duly endorsed;
  3. The parties to the action in which the foreign judgment was issued were summoned to attend, and were duly represented;
  4. The judgment or order has acquired finality in accordance with the law of the court that issued it, provided that the applicant submits a certificate that the foreign judgment has acquired the force of a final order or the same is stipulated in the judgment itself;
  5. The foreign judgment does not conflict with a judgment or order already made by a Court in the UAE, and contains nothing that conflicts with morals or public order in the UAE

The powers of a UAE execution court, in respect of each matter brought before it (for the enforcement of a foreign judgment) are limited to deciding whether the conditions in Article 222 of the NCPL, as outlined above, have been satisfied. In other words, the execution court cannot go into the merits of the foreign judgment. If the conditions laid down in Article 222 are satisfied, then in the absence of anything in contravention of morality or public policy, the UAE execution court is bound to order the enforcement of the foreign judgment.

Removal of the Requirement of Suit

Another significant development in the context of enforcement of foreign judgments is the removal of the requirement set out in Article 235 of the repealed Civil Procedures Law (Federal Law No. 11 of 1992), which provides that proceedings for enforcement of a foreign judgment must be initiated by filing a suit before the UAE execution court within whose jurisdiction execution was sought. UAE courts were, accordingly, applying the entire range of procedures required for adjudicating cases on their merits under the said repealed law.

In accordance with Article 222 of the NCPL, this requirement has been removed. Now a foreign judgment may be enforced by merely filing “a request for an order” (which is a summary procedure, as opposed to a full-fledged suit in the normal course) before the execution court, whose jurisdiction is limited to ensuring that the conditions for enforcement outlined above have been satisfied. The execution court is now required, under Article 222 of the NCPL, to rule on the application within five (5) days of the date of filing of the application.

Recent UAE Court Practice

A recent Common Law court judgment cast doubt on the predictability of UAE Law with respect to the enforcement of foreign judgments. This perception is, unfortunately, shared by some foreign commentators. Recently, a foreign lawyer, whilst ignoring relevant case law, incorrectly observed that the UAE Courts “remained… hostile or at least slow to permit enforcement of foreign judgments of common law courts in the absence of a treaty”.

As demonstrated below, recent decisions of the UAE courts, even in the absence of a bilateral treaty on reciprocal enforcement, reveal that UAE courts are aware of the objectives behind the introduction of the above legislative reforms and are perfectly willing to recognise and enforce judgments of foreign courts. As these cases show, the key question which UAE courts will consider is whether the court of the jurisdiction which has issued the judgment in question would enforce a similar decision of the UAE courts. This principle of reciprocity, as interpreted by recent UAE court judgments, does not require that a UAE court judgment must actually have been enforced in the foreign jurisdiction.

Indeed, this understanding had long been endorsed by UAE courts at the highest level even before the promulgation of the NLCP. The Dubai Court of Cassation, for example, ruled in 2005, that:

“the principle of reciprocity between the UAE and the foreign country which its judgment is to be executed in the UAE is that the conditions for the execution of judgments are the same as those in the UAE or less burdensome”.

Furthermore, several recent examples of judgments of the UAE courts (cited below) show the willingness of UAE Courts to enforce foreign judgments and such judgments provide guidance on the courts’ approach to the issue of reciprocity.

Recent examples of UAE execution courts having enforced judgments issued by foreign courts from different jurisdictions are the enforcement of judgments from Singapore in 2021, Poland in 2022, the U.K. in 2022, and the Netherlands in 2021.

All these recent examples clearly demonstrate that the willingness of UAE courts to adopt and deliver judgments in conformity with the letter and spirit of the recent legislative reforms is unqualified. This has been recently recognised by the High Court of Justice of England and Wales in the matter of Invest Bank PSC v Ahmad Mohammed El-Husseini and oths., [2022] EWHC 3008 (Comm) (“English High Court of Justice Judgment”).

Justice Bryan addressed the question of whether the conditions stipulated under Article 85 of the Executive Regulations introduce a real risk that the Defendants may not be in a position to enforce an order for costs in the UAE Having considered, in some detail, the submissions of the parties on this question, including their expert witness reports and other relevant evidence on the interpretation of, inter alia, the above conditions, Justice Bryan reached the conclusion that:

“it follows from the above that in relation to both the offshore route [financial free zone] and the onshore route, there has not been shown to be a risk of substantial obstacles to enforcement in the UAE”

Enforcement of GCC Judgments in the UAE

As a further example of how UAE Courts construe the principle of reciprocity, it should be noted that UAE courts have enforced several judgments delivered by courts in other Gulf Cooperation Council member states. These judgments were delivered based on the fulfilment of the conditions of Article 85 of the Executive Regulations and/or on the relevant treaties that apply between the UAE and other Gulf Cooperation Council countries, which also contain similar jurisdictional gateways to the Executive Regulations. For example, the Abu Dhabi courts have delivered judgments recognising and enforcing judgments of the courts of Saudi Arabia and Bahrain.

Conclusion

The case law cited above demonstrates that UAE courts are willing to enforce foreign judgments, even in the absence of a bilateral treaty of reciprocal enforcement between the UAE and the country of the court which issued the judgment. These judgments clearly show the increasingly permissive approach of the UAE courts in respect of the enforcement of foreign judgments. This approach is also enhanced by the significant reforms introduced by UAE legislation which facilitates enforcement of foreign judgment through summary procedures before an execution judge.

For further information related to this article, please contact Dr. Faraj Ahnish, Founding Partner of Hadef & Partners.

 
 

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.