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March 2019

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Recent Amendments to the Civil Procedure Code

By Abdulrahman Junaid and Dennis Varghese

In early 2019, the United Arab Emirates (UAE) cabinet proposed resolution No. 57 of 2018 concerning the Executive Regulation Federal Law No. 11 of 1992 on the Civil Procedure Law (CPA). It came into effect on 17 February 2019.

The amendments aim to improve and modernise the overall environment of the UAE judicial system. The regulations (a total of 193 articles) address a wide range of litigation procedures, branching from service to process to enforcement and to recognising foreign awards and judgements. These amendments include significant changes to procedures across the civil courts in the UAE, to unify the process and streamline the implementation of judicial decisions.

1. Service of Process

i. Where the official language of the defendant is not Arabic, the claimant is required to attach an English translation (or any other language that has previously been agreed to) to the service notice. This requirement does not extend to employment claims being commenced by employees (Article 5);

ii. One of the biggest areas of change is that service of proceedings by ‘modern means of communication’ now includes: recorded voice or video calls, mobile SMS, email, fax or any similar means, as set out in a Minister of Justice decision or mutually agreed by the parties (Article 6).

2. Case Management Office

Article 17 deals with the ‘Case Management Office’ which is responsible for overseeing lawsuits before trials, with the aim of accelerating the administrative process, as demonstrated by two further articles:

• Article 18 provides that the period allowed for the defendant to appear in the court once the case is registered is 10 days, but this may be reduced to 3 days; and

• Article 19 clarifies that the date of registration is deemed to be the date on which the case was submitted to the Case Management Office and not on the date that the court registration is completed.

The amendments put more emphasis and responsibility on the Case Management Office, which is tasked with essentially dealing with all preliminary matters. Such matters include: filing, supervising the service process, managing the case before it is passed to the judge, including the exchange of submissions by the parties until such time as sufficient documentation, evidence and information is present for the matter to be adjudicated. This should significantly reduce court time and ultimately result in a more efficient resolution of disputes.

A supervising judge, or someone appointed by them, presides over the Case Management Office, who oversees the handling of the case and intervenes when required. For instance, if an expert or further investigation is required on a particular matter, the supervising judge may order the necessary steps.

3. Conduct of Proceedings

A new process of adjudication has been introduced whereby certain disputes can be resolved with only one hearing at the summary chambers court (Article 22), such as civil and commercial claims not exceeding AED 100,000 and claims for wages and salaries not exceeding AED 200,000. However, this criterion does not apply where the State is a party. Article 37 provides that a hearing may not be adjourned more than once for the same reason attributable to a party in the absence of a valid excuse. Where such a valid excuse exists, the second adjournment shall not exceed two weeks.

4. Assessment of Case Value – Articles 23 to 25

Assessment of case value is an important practical consideration, as it has a bearing on jurisdiction, appeal thresholds, and of course the court fees payable by a plaintiff. Key changes include:

i. Article 23 provides that minor circuits (as set out in Article 30(1) of the CPA) will have jurisdiction over civil, commercial and labour claims not exceeding AED 1 million (the threshold previously being AED 500,000) and counterclaims irrespective of their asserted value;

ii. Decisions made by minor circuit court in value of AED 50,000 or below are no longer subject to appeal (for labour claims the value is AED 20,000). Prior to the amendments, the threshold was AED 20,000 for all claims;

iii. Article 23 provides that the threshold for appealing a judgment of the Court of Appeal to the Court of Cassation is AED 500,000 (the previous threshold was AED 200,000).

5. Payment Orders – Articles 62 to 68 (previously found in Articles 143 to 149 of the CPC)

The amendments have simplified and expedited the process for a creditor to obtain an enforceable judgment on admitted debt claims as a ‘Payment Order’. While the use of Payment Orders existed previously, their application was limited to only certain claims. The new amendments extend the use of Payment Orders, thereby enabling creditors to avoid lengthy standard civil litigation procedure before the Court of First Instance.

The amendment is a significant boost for businesses in the region as they will now be able to proportionally and effectively pursue significant debts with less time and cost. The key changes include:

i. A Payment Order can be made for any written admission of debt, including through electronic admission;

ii. Pursuant to Article 63, the creditor is required to demand payment from the debtor and grant at least five days to make payment. If payment is not received, a Payment Order may be applied for;

iii. Interest on the outstanding debt can now be claimed (previously, interests could not be claimed on a debt);

iv. Article 64 provides that the judge must substantiate its reasons if an application for a Payment Order is denied (there was no such requirement prior to this amendment);

v. Article 66 states that the Payment Order may be appealed within 15 days by the debtor, and the court is required to determine the result of the appeal within one week from the date of registration.

A suitable example to illustrate the key changes is a recent case involving a Payment Order in the Dubai court. Within only one week of filing the claim, the client obtained judgment in excess of USD 8 million, plus interest at 9% per annum from the date of judgment.

6. Representation

Recent amendments now provide litigants with additional flexibility as it expands on the list of permitted representation, to include: a relative up to the fourth degree and an employee acting through a Power of attorney where the party is a business entity, as well as continuing to permit parties to represent themselves, or be represented by a lawyer.

7. Enforcement of Foreign Judgments and Awards

The amendment enhances the process of enforcement of foreign judgments. Prior to the amendment, the enforcements were refused if the UAE courts themselves had jurisdiction over the claim. The hurdle is now limited to UAE courts having exclusive’ jurisdiction over the underlying claim.

Article 85 provides that an application to enforce a judgment shall be made to the execution judge, who will have to issue an order in no more than three days. The enforcement may be ordered if the following is verified:

i. that the courts do not have exclusive jurisdiction over the dispute;

ii. that the judgment/order has been issued by an authorized court under the laws of the relevant foreign jurisdiction;

iii. that the parties to the foreign judgment/order have been summoned and represented;

iv. that the foreign judgment/order sought to be enforced is adjudicated by the highest competent court and therefore cannot be further pursued by the parties in the foreign jurisdiction;

v. that the foreign judgment/order sought is not contrary to the judgment or order of a UAE court and is not contrary to the morals and public order of the UAE.

Overall, the recent amendments to CPA allows for a more streamlined and simplified process. The litigation procedure has been made more accessible and understandable to those undergoing litigation. The intention of this update is to bring the CPA forward in terms of modernity and to continue to meet, and often exceed, global benchmarks. It will be interesting to see how the Courts apply these provisions going forward.

Al Dahbashi Gray can assist you. If you need any help in understanding the changes and the potential impact of the recent amendments, please contact us on info@adglegal.com.

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