On 17 January 2020, the Indian Ministry of Law and Justice published a notification in the official gazette, which means that judgments rendered by both the onshore and offshore Courts of the UAE will be enforceable in the Courts of India without a re-examination of the merits:
“In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares United Arab Emirates to be a reciprocating territory for the purposes of the said section and the following Courts in United Arab Emirates to be superior Courts of that territory…” (the “Notification”)
The Indian Ministry of Justice defines “Superior Courts” as the following UAE Courts:
- the Federal Supreme Court;
- the Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah;
- Abu Dhabi Judicial Department;
- the Dubai Courts;
- Ras Al Khaimah Judicial Department;
- the Courts of Abu Dhabi Global Markets (“ADGM”); and
- the Courts of Dubai International Financial Centre (“DIFC”).
The effect of this long-awaited Notification is anticipated to make enforcement of UAE judgments in India easier and quicker and gives effect to part of a 20 year old bilateral judicial cooperation treaty between the two countries, namely, the “Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Commissions, Execution of Judgements and Arbitral Awards” dated 25 October 1999 (the “Treaty”), which was ratified by the UAE in 2000.
Whilst the Treaty applies to the service of summons and other judicial documents or processes; the taking of evidence by means of Letters of Request or commissions; and the execution of decrees, settlement agreements, judgments and arbitral awards between the two countries, it appears that the present Notification only applies to the recognition of judgments issued by the UAE. This is an extremely important development, as UAE companies and individual claimants will now be in a position to by-pass the complex civil procedure for the enforcement of foreign judgments in India, which include a review of the merits.
Identification of available and unencumbered assets in the hands of the debtor will continue to represent an important component in the recovery strategy, but the Notification has two important potential consequences:
- Companies or individuals which have obtained UAE Court judgments, but have held off from seeking to enforce those judgments, may now wish to do so. Equally, those who have held off from pursuing debtors at all may commence proceedings now that there appears to be a clear path to enforcement; and
- Third party litigation funders may now be more willing to fund proceedings against Indian-based companies and individuals, or to fund enforcement proceedings in India, and thereby take on the risk of litigation in return for a share in the proceeds.
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.