DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf
Navigation Holdings PJSJ CA 007/2015, 25 February 2016
DNB Bank ASA was seeking recognition and enforcement of an
English High Court order in the United Arab Emirates by bringing an
action in the Dubai International Financial Centre (DIFC)
Court. The English court order required Gulf Eyadah
Corporation and Gulf Navigation Holdings PJSJ to pay DNB Bank ASA
US$8.7 million together with costs in relation to finance documents
and a guarantee. The issue in this case was whether the DIFC
Court had jurisdiction to enforce a foreign award.
At first instance, the DIFC Court held that the English order
was a "foreign" court order which fell within Article
7(6) of the Judicial Authority Law (JAL). The relevant part of the
JAL in relation to this case comprises Dubai law no.12 of 2004
(amended by Dubai law no.16 of 2011 and also Article 24(1) of the
DIFC Court law no.10 of 2004). The judge considered that the
English order constituted a "foreign" court order within
the meaning of Article 7(6) of the JAL. In particular, that the
English order came under Article 5(A)(1)(e) of the JAL and so the
jurisdictional "gateway" was satisfied. Basically, the
English court order was a foreign court order that fell within the
JAL, and so could be recognised by the DIFC Court. As a
result it could be referred to the Dubai Court for
The Court of Appeal did not agree with this reasoning, but still
enforced the English order, albeit under a different JAL provision.
The Appeal Court concluded that Articles 7(4) to 7(6) did not apply
to the English order. However, the DIFC Court still had
jurisdiction to consider the claim under Article 7(2) of the JAL,
which provides for the execution of judgments, decisions and orders
given by the DIFC Court was relevant. In conclusion, it was held
that Article 7(2) of the JAL applied, and this provided for the
execution of judgments, orders and decisions which were given by
the DIFC Court. As this was a foreign judgment, it could be
enforced by the DIFC Court. On enforcement, it became an
independent local judgment.
Reliance was placed upon the Memorandum of Guidance that had
been entered into by the Commercial Courts of England and Wales and
the DIFC Court. This Memorandum provided reciprocity
mechanisms for the execution of judgment for assets in other
jurisdictions. The JAL therefore provided a gateway for the
recognition of foreign awards.
The Court of Appeal also considered that the presence of assets
in the DIFC was not a condition to the enforcement of foreign court
judgments. It did not matter that the defendant did not have any
assets within the direct jurisdiction of the DIFC. This is
interesting and helpful because the DIFC Court could be used as a
"conduit" to enforce a foreign judgment in a subsequent
jurisdiction. An English court order for payment of money can be
taken to the DIFC Court for recognition and enforcement. The
DIFC Court can recognise and enforce the order, and then the
claimant can use the DIFC judgment to enforce the order in the
local Dubai courts.
Finally, the respondent was unable to demonstrate that the
enforcement of an English order was manifestly unfair or breached
the administration of justice. This point was not pursued on
appeal, but the Court of Appeal commented that this process of
enforcement would not be unfair or breach the administration of
justice in any event.
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On 26 October 2016, the Court of Appeal delivered its judgment in Kazakhstan Kagazy Plc & 6 others v (1) Baglan Abdullayevich Zhunus (2) Maksat Askaruly Arip (3) Shynar Dikhanbayeva  EWCA Civ 1036.
With high cost and inefficiency top of the list of party concerns about the arbitral process, institutions, arbitrators, practitioners and indeed legislators are keen to find ways to address those concerns.
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