Originally published February 2015
If a party seeks to enforce a foreign judgment in the UAE, they have an option, according to their needs, of seeking to have that judgment recognised and enforced in the courts of the UAE or the Dubai International Financial Centre (DIFC). It is important to bear in mind that a different regime applies in respect of arbitration awards and such matters are outside the ambit of this article. In this article, we focus on some of the issues the parties should bear in mind before attempting to enforce a foreign judgment in the UAE or DIFC or indeed resist such enforcement.
First, it should be noted that the Emirate of Dubai and the Emirate of Ras Al Khaimah are not part of the UAE federal court system (with the exception of the Federal Supreme Court which has jurisdiction in respect of certain issues that need not concern us here). Dubai and Ras Al Khaimah each retain their own separate courts. That said, the principles of UAE law discussed below have equal application to them.
Article 235 of the UAE Civil Procedure Code, Federal Law No. 11 of 1992 ("Civil Procedure Code") regulates the enforcement of foreign judgments in the UAE. Whilst, in principle, Article 235 provides some clarity, in practice difficulties can be encountered with enforcement, especially in the absence of a treaty between the foreign country and the UAE that allows for reciprocity of enforcement.
The UAE has entered into and ratified a number of reciprocal enforcement treaties, including the Gulf Co-Operation Council Treaty, the Bilateral Treaty for Enforcement of Judgments with France and the Agreement between the UAE and India on Juridical and Judicial Co-Operation in Civil and Commercial matters. It has also entered into cooperative arrangements with other countries, including Jordan, Morocco, Saudi Arabia, Syria, Somalia, Algeria and Egypt. If the litigation involves any such countries, regard must be had to the applicable treaty. Failure to review and address the relevant treaty may render a court judgment ineffective in the UAE. Accordingly, when drafting and negotiating contracts, parties should check whether such a treaty exists and, if so, take into account its terms.
Returning to Article 235 of the Civil Procedure Code, a summary of an unofficial English translation is as follows:
- Judgments and orders issued in a foreign country may be enforced in the UAE if there is reciprocity between the foreign country and the UAE as to enforcement of judgments and orders. (In other words, the foreign court will enforce a UAE court judgment on a like basis.)
- But first, it must be established that:
- The UAE courts do not have jurisdiction in the dispute in relation to the subject of the foreign court judgment.
- The judgment was one in which the foreign court had jurisdiction in accordance with the laws of the foreign state.
- The opposing parties in the case in which the judgment was made were summoned to and duly appeared.
- The judgment or order has acquired the force of res judicata, under the law of the court that issued it.
- It does not conflict with a judgment or order previously issued by a court in the UAE and contains nothing in breach of public morals or public order in the UAE.
In practical terms, the principal hurdle a party may confront is that the UAE courts will not recognise a foreign judgment in circumstances where the UAE (or Dubai or Ras Al Khaimah court) would have jurisdiction over the original matter (Article 235 (2) (a) of the Civil Procedure Code). Article 20 of the Code governs the general jurisdiction of the UAE courts and provides that the courts have jurisdiction to hear all actions brought against individuals or companies having an address or place of residence in the UAE.
However, the UAE courts also have jurisdiction to hear an action against a foreign entity which does not have an address or place of residence in the UAE. Article 21 of the Code provides, amongst other things, that the court will also have jurisdiction over a foreigner who does not have an address or place of residence in the UAE if they have "an elected address in the country", or the action relates to assets in the UAE or if certain other conditions are met under Article 21.
In light of this, a choice of jurisdiction clause in a contract may prove ineffective in the UAE if it is found that the UAE courts would have jurisdiction in relation to the original matter, despite the contract specifying that a foreign court has jurisdiction. It may be possible to avoid the application of this principle by the terms of an international treaty. Article 238 of the Code provides: "The rules laid down in the foregoing Articles shall be without prejudice to the provisions of conventions between the UAE and other countries in this regard."
Procedural requirements for enforcement
In procedural terms, the enforcement of a foreign judgment in the UAE is by way of an application to the Court of First Instance having jurisdiction in the geographical area in which enforcement is sought, filed in the same manner as a normal action, requesting the court ratify the foreign judgment for execution in the UAE.
The application should be accompanied by evidence, which should include proof the judgment is final and not subject to any appeal, the defendant was duly summoned and represented during the hearing, and the summons not only satisfied the requirement under foreign jurisdiction but also the minimum criteria required under the UAE law. The judgment would not be enforced until it has been ascertained that it contains nothing contrary to morals and public order in the UAE.
Needless to say, the UAE courts all work in the Arabic language, both orally and in writing. Accordingly, any evidence or other documents presented to the court (oral evidence is not common) must be in Arabic and a translation of a non-Arabic document must be provided using a translator approved by the court.
Dubai International Financial Centre
As noted earlier, enforcement of a foreign judgment is also possible through the courts of the DIFC. Article 7(4) of The Judicial Authority Law No. 12 of 2004 provides that judgments of courts outside the DIFC may be enforced within it in the manner prescribed in the DIFC laws. Similarly, in accordance with Article 24(1) (a) of the DIFC Court Law (DIFC Law No. 10 of 2004), the DIFC courts have jurisdiction to ratify the judgment of a foreign court subsequent to an application for enforcement in the courts of Dubai. In addition, where the UAE has entered into an applicable treaty for the mutual enforcement of judgments, orders or awards, the DIFC Court of First Instance is required to comply with the terms of that treaty.
Enforcing a foreign judgment in the DIFC in relation to a debt, against a person with assets located in there, should be direct to the DIFC courts. This is particularly so for judgments within the ambit of the January 2013 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court of the High Court of England and Wales, which was signed in order to facilitate mutual enforcement, subject to certain conditions.
The enforcement of a foreign judgment in the DIFC courts is undertaken by filing a claim for a judgment debt or a declaration. A declaration is a remedy available under Article 37 of the DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005). A claim can be filed either under Part 7 of the Rules of the DIFC courts, which is the more regular procedure, or under Part 8 if the claim is unlikely to involve a substantial dispute of fact. A judgment issued by the DIFC courts is final and binding on parties with a presence in the DIFC or those otherwise within the jurisdiction of the DIFC courts.
Taking into account the reciprocal recognition provisions of the Judicial Authority Law, which provides that judgments of the DIFC courts are to be enforced in Dubai through the Dubai Courts (and vice versa), in theory it may be possible for a party to file a claim for the ratification of a foreign court judgment in the DIFC courts and then convert that into a judgment of the Dubai courts for the purposes of enforcement, even where there is no other connection between the foreign judgment and the DIFC. That said, this approach is untested and it is not clear whether the DIFC courts have jurisdiction to recognise any foreign judgment in circumstances where the parties involved have no presence or assets in the DIFC or have otherwise submitted to its jurisdiction.
Enforcement in the UAE of a foreign (that is non-UAE) court decision is dependent on a number of features. First and foremost, if there is a treaty between the foreign country and the UAE, regard must be had to its requirements. Second, regard must be had to the detail of Article 235 of the UAE Civil Law that must be followed: form is particularly important.
But one point emerges of particular practical importance: the fact that the parties have agreed that the foreign court has jurisdiction may not carry the day when enforcement is sought in the UAE court if the UAE court would originally have had jurisdiction.
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.