06 Jun 2024

Hadef & Partners Secure Historic Judgment Expanding the Enforcement of Foreign Judgments and Regulatory Decisions

Authored by: Karim Mahmoud and Mohammed Abbas Al-Obaidi

In Brief:

  1. Hadef & Partners successfully secured a historic decision in the Dubai Court of Cassation in relation to the enforcement of foreign judgments, particularly for regulatory bodies.
  2. Hadef & Partners successfully argued that a wide range of foreign orders should be enforceable in the Dubai Court, even if relating to summary judgments or decisions that themselves are enforcing other foreign orders. The latter establishes for the first time in the UAE that the principle of ““exequatur sur exequatur ne vaut” (i.e. prohibition of double execution), as applied in some European courts, does not apply in the UAE. 
  3. Furthermore, the Court of Cassation took the view that foreign criminal orders or judgments, such as fines or penalties, may be enforceable in the Dubai Courts. This decision, obtained by Hadef & Partners, will be of significant support to regulatory bodies worldwide in the realm of white-collar crime, tax evasion or securities fraud in relation to wrongdoers who abscond from other jurisdictions. This decision should be lauded for propelling the global fight against fraud and white-collar crime further than many other global jurisdictions.

In a historic decision, the Dubai Court of Cassation upheld the enforcement of a Canadian judgment that itself enforced a foreign restitution order. The decision has a number of significant impacts on the potential enforceability of foreign judgments and orders.

Hadef & Partners was engaged in respect of proceedings to be brought against an individual believed to be in the UAE. A criminal judgment had previously been issued against the individual in a foreign jurisdiction, which also included an order for restitution to the many victims of the crime. The restitution order was thereafter enforced in Canada and transformed into a civil judgment.

The subsequent recognition and enforcement through the Dubai Courts establishes that there is the requisite reciprocity between Canada and the UAE. Furthermore, in what will be a helpful precedent for enforcement of many common law judgments, the Dubai Court of Cassation rejected arguments that summary judgments are unenforceable. The key consideration for the Court appeared to be that the other party was duly represented and had the opportunity to put forward its defense. Detailed submissions in the Dubai Court on the nuances of Canadian law and judgments were required to achieve this outcome.

The other side argued that the Canadian judgment was incapable of enforcement since it itself enforced another foreign decision. This principle, referred to as “exequatur sur exequatur ne vaut”, is typically applied in other European civil law jurisdictions. However, the Dubai Court of Cassation accepted arguments raised that such orders are capable of enforcement since Article No. 222 of Federal Decree-Law No. 42 of 2022 (the “Civil Procedure Law”) which deals with the recognition of foreign decisions, encompasses both foreign judgments and orders.

The most notable consequence of this judgment may be that, in response to arguments that the judgment being enforced was in essence criminal in nature, the Court indicated that Article 222 of the Civil Procedure Law did not distinguish between criminal or civil decisions. This potentially allows for the enforcement of fines, penalties and taxes issued by foreign states and regulatory bodies.

Many common law courts, including the DIFC Courts in the UAE, do not permit the enforcement of foreign judgments relating to taxes, fines or penalties. That this may now be possible in the Dubai Courts is a shift that may expand the extent for global regulatory enforcement.

In the event you would like further advice on the enforcement of foreign judgments or awards in the UAE please contact Dispute Resolution Partners Karim Mahmoud and Omar Al Heloo.