Cabinet Resolution No. 57 of 2018 (the "Cabinet Resolution") has amended the Executive Regulations of the Civil Procedure Law No. 11 of 1992 (the Executive Regulations) resulting in an extensive revision of the civil procedure for onshore UAE Courts with a focus on modernising the court process.
The amendments to the Executive Regulations became effective on 16 February 2019 and set out a clearer framework for commencing claims, service of legal proceedings and responding to a claim. In addition Decision No. 9 of 2019 concerning the minor civil circuit (equivalent of small claims courts) came into force on 1 April 2019.
While the changes are yet to be fully tested, the amendments are likely to ensure a more efficient and expeditious judicial process resulting in significant time and cost savings for both the Court and litigants. This Article explores the main changes made to the Executive Regulations.
Service of Proceedings
The Cabinet Resolution has expanded the provisions on service of proceedings. For instance:
- Service by alternative means of communication including recorded voice or video calls, mobile SMS, email, fax or any other similar means or as agreed by the parties is permissible.
- Service of proceedings can take place between 7am and 9pm (previously 7 am and 6pm). Service by more modern forms of communication can take place at any time on the weekends (except where government entities are being served).
- Parties can serve themselves or instruct the court bailiff to do so.
- Where the official language of the respondent is not Arabic, a claimant must attach an English translation (or any other language the parties have previously agreed to) of the service notice.
The responsibility of the Case Management office has been enhanced with greater focus being placed on ensuring the efficient disposal of preliminary matters including filing, supervising the service process and managing the case before it is passed to a judge.
Article 18, for example, provides that the period allowed for the defendant to appear in the Case Management Office or the court following registration of the case is 10 days, which may be reduced to three days. Where summary claims are concerned (such as applications for provisional attachment) this period is 24 hours, which may be reduced to one hour on the condition that notice is served on the defendant personally. While Article 18 goes on to carve out an exception for maritime claims, the scope of the exception is currently unclear.
In addition, the Case Management Office should collate all relevant material before the matter goes before the judge for adjudication. This should significantly reduce court time and ultimately result in a more efficient resolution of disputes with the practice of repeated adjournments becoming less frequent.
Summary Chambers within the Minor Civil Circuit Division
A new process of adjudication has been introduced whereby certain disputes can be disposed of with only one hearing by a summary chambers court (Article 22).
Summary Chambers shall render first instance judgments on the civil, commercial and labour claims where the value of the claim does not exceed one million dirhams (notwithstanding any counterclaims of any value).
Summary chambers can dispose of matters within a single hearing where (i) the lawsuit deals with civil, commercial and labour claims not exceeding AED 100,000 in value; (ii) lawsuits relating to signature authenticity whatever their value; and (iii) cases relating to claiming unpaid wages, salaries and alike, which do not exceed AED 200,000 in value.
The Cabinet Resolution provides that Summary Chambers decisions for claims with a value not exceeding AED 50,000 are final and not subject to appeal (for labour claims the value is AED 20,000).
While the concept of payment orders already existed under the Civil Procedure Code, it was of little use as it only applied to very limited financial instruments and commercial paper claims. Payment Orders are a mechanism for immediate ex parte judgment (without notice to the debtor). The Cabinet Resolution extends the use of payment orders to circumstances involving any written admission of debt including through email. Accordingly, this assists with obtaining an expeditious order in relation to simple debt claims and shall free up significant Court time.
If the Court makes a payment order any appeal would go to the Court of Appeal, thereby avoiding the need for ordinary proceedings in the Court of First Instance. However, if the application for a payment order fails, the claim is then heard as an ordinary matter in the Court of First Instance.
We understand that this has been widely used since this change to the rules.
Enforcement of foreign judgments
Importantly, the process of enforcement of foreign judgments has been enhanced. Previously the Courts could refuse to enforce a judgment where it was deemed that they would have had jurisdiction over the underlying claim which resulted in the foreign judgment. This hurdle to enforcement has been minimised as the UAE Courts can only refuse to enforce where they have 'exclusive jurisdiction' over the underlying claim (Article 85).
The enforcing party may bring its claim before an Enforcement Judge who will determine the claim on an expedited basis without notice to the defendant. Pursuant to Article 85(2), the Enforcement Judge must issue an order no later than three days after the submission date.
The new expedited process for enforcement of foreign judgments also applies to the enforcement of foreign arbitral awards (Article 86). Notwithstanding the above changes, the substantive conditions of enforcement of foreign arbitral awards will still continue to be governed by the New York Convention which will have supremacy (as confirmed in Article 88).
While in theory the new rules on enforcement are to be welcomed by those looking to enforce foreign judgments, any decision taken by the enforcement judge is subject to appeal and it therefore remains to be seen whether these provisions actually assist in expediting the enforcement process.
The new provisions on enforcement have already been relied on in a case relating to an application to enforce a London seated-arbitral award in the UAE against an entity based in Sharjah. The Execution Judge issued a decision notifying the award debtor to pay the claim amount within 15 days of service of the order. It is yet to be seen if the debtor pays or challenges the decision.
The changes made show the UAE's commitment to a more streamlined and efficient court process. While some of the amendments, such as those relating to service and payment orders, are straightforward and can be applied with relative ease, others particularly those relating to enforcement of foreign judgments are still open to interpretation. It will be interesting to see how the Courts apply these provisions going forward. Overall, the amendments are a welcome addition to the UAE's Civil Procedure regime and are likely to result in time and cost savings for both Courts and litigants.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.