Navigating Foreign Judgment Enforcement in the UAE: A Comprehensive Overview
In the globalised business landscape, the enforcement of foreign judgments is a critical aspect of cross-border legal proceedings. The United Arab Emirates (UAE) has positioned itself as a hub for international business, necessitating a robust framework for the recognition and enforcement of foreign judgments.
The UAE recognises the importance of reciprocal recognition and enforcement and is party to various bilateral and multilateral treaties. Notable among these are the 1983 Riyadh Arab Convention for Judicial Co-operation, the 1996 Gulf Co-operation Council (GCC) Convention for the Execution of Judgments, Delegations, and Judicial Notifications and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Additionally, the UAE is a party to multiple bilateral treaties with countries such as France, China, Kazakhstan and India allowing judgments rendered by the courts of one State to be recognised and be declared enforceable in the other State if certain conditions are met.
Whilst the UAE onshore courts maintain uniformity in enforcing foreign judgments through Federal Decree-Law No. 42/2022 on the Promulgation of the Civil Procedure Law (“Civil Procedure Law”), it is essential to recognise the exclusive jurisdiction of the Dubai International Finance Centre (DIFC) Courts and Abu Dhabi Global Market (ADGM) Courts for arbitration awards, operating under common law principles. However, in the instance that the UAE has entered into an applicable treaty for the mutual enforcement of judgments, orders, or awards, the financial freezones will comply with the terms of such treaties. Additionally, the financial freezone courts have entered into bilateral memoranda of guidance in relation to reciprocal enforcement arrangements with courts in several other jurisdictions. For example, the DIFC Courts have entered into a:
- Memorandum of Guidance as to Enforcement with the High Court of England and Wales.
- Memorandum on Enforcement with the Supreme Court of Singapore.
- Memorandum of Guidance on Understanding the Enforcement of Money Judgments with the Federal Court of Malaysia.
- Memorandum of Guidance as to Enforcement with the High Court of Hong Kong.
Execution of foreign judgments
The enforcement process involves a two-stage approach: ratification and execution. A person seeking to ratify a foreign judgment in the Courts of Dubai may file a petition directly to the Execution Judge sitting in the Court of First Instance. Before the judge can order the execution of a foreign judgement, the following conditions must be fulfilled:
- The Courts of the UAE should not have exclusive jurisdiction over the dispute, and the foreign court issuing the judgment must have jurisdiction according to its own rules of international jurisdiction;
- The judgment or order must be issued by a court in compliance with the law of the state where it was issued and must be duly certified;
- The parties involved in the lawsuit leading to the foreign judgment were required to appear and were properly represented;
- The judgment or order must have a final and legally binding status according to the law of the issuing court. A certificate indicating this legal effect should be provided, or it should be explicitly stated in the judgment itself; and
- The foreign judgment should not conflict with any previous judgment or order issued by a court in the UAE, and it should not involve anything that violates public order or morality.
The most common pitfall in seeking recognition or enforcement of a foreign judgement in the UAE is in connection with Article 222(2)(e) of the Civil Procedure Law which specifies that a judgement must not “conflict with a judgment or order rendered by a court of the State and does not contain anything contrary to public order or morals”. In practical terms, the UAE court always evaluates the legal and commercial aspects of the judgment, including the nature of the agreement and the business between the parties. The aim is to authorise the enforcement of judgments that do not violate public policy or morals, such as issues related to money laundering, drugs, Islamic culture and local tradition.
Notably, the requirement of reciprocity in UAE law for recognising foreign judgments can pose significant challenges. It is often difficult in practice to demonstrate to the satisfaction of onshore UAE Courts that a similar judgment from the UAE would be enforced in the foreign jurisdiction. As a practical solution, seeking recognition and enforcement before the DIFC Courts is usually preferred, especially for judgments from countries outside the Riyadh and GCC Convention countries. The DIFC Courts serve as the offshore conduit jurisdiction of choice, as ADGM Courts lack an equivalent recognition and enforcement regime, except in specific cases involving judgments from within the Emirate of Abu Dhabi.
In conclusion, the UAE is committed to facilitating the recognition and enforcement of foreign judgments through international treaties and reciprocal arrangements. Enforcing foreign judgments in the UAE involves navigating a comprehensive legal framework and requires practitioners to be well-versed in relevant laws and recent developments to ensure successful enforcement outcomes in this dynamic and evolving legal landscape.
Nawal Abdinassir Ali