Parties wishing to enforce judgments obtained from foreign courts in the UAE must comply with a number of pre-conditions imposed by UAE law. We provide a brief overview the position below.
Article 235 of Federal Law No. 11 of 1992
The enforcement of a foreign judgment is governed by Article 235 of Federal Law No. 11 of 1992, the Civil Procedure Code (“CPC”), which provides that for a foreign judgment to be enforced: (1) there must be a mutual recognition and enforcement of UAE judgments in the country in which the foreign judgment was issued; and (2) the following conditions must be satisfied:
a) the UAE courts must not have had jurisdiction over the underlying dispute (and the foreign court did have jurisdiction according to the laws of that jurisdiction);
b) the judgment must have been issued by a competent court under the law of that country;
c) the defendant must have been summoned and duly represented in the foreign proceedings;
d) the judgment must be final and binding under the law of the country in which the judgment was issued; and
e) the judgment must not be inconsistent with a judgment already given by a court in the UAE, nor may it be contrary to UAE principles of morality or public order.
A hurdle that may be faced by a party wishing to enforce a foreign judgment in the UAE is the requirement that the UAE courts must not have jurisdiction over the underlying dispute. Article 20 of the CPC governs the general jurisdiction of the UAE courts and provides that the courts have jurisdiction to hear all actions (except certain actions relating to real property outside of the UAE) brought against foreign individuals or companies having an address or place of residence in the UAE. Furthermore, Article 21 provides that that the UAE courts will have jurisdiction over a foreigner who does not have an address or place of residence in the UAE in a number of circumstances including if they have “an elected address in the country,” the action relates to property in the UAE or the action relates to a contract entered into or performed in the UAE. The UAE courts therefore have wide grounds to accept jurisdiction in a matter.
A foreign judgment must be ratified by the UAE courts before it can be enforced in the UAE. Once the judgment is ratified, it may then be enforced by way of application to the execution department of the courts. The ratification process is set out in the CPC - it is made by way of application to the Court of First Instance of the Emirate in which enforcement is sought and is almost identical to the procedure for making a regular claim in the courts.
It is noted that the losing party may make a counter-application for annulment of the judgment, challenging the judgment on the grounds set out in items a) to e) above. Furthermore, the decision of the Court of First Instance may be appealed all the way up to the Court of Cassation, with the effect that the enforcement process may be lengthy.
However, the UAE is a party to a number of treaties on reciprocal enforcement; if there is a treaty between the UAE and the country in which the judgment was issued, this can assist in the enforcement process.
DIFC Courts not a conduit for enforcement of foreign judgments
DIFC Court judgments can be enforced ‘onshore’ in the Dubai Courts (and other UAE courts) provided that the relevant procedural requirements, which are less onerous than where the party is seeking to enforce a foreign judgement, are met.
Until recently there was uncertainty as to whether a foreign judgement which had been ratified for execution within the DIFC Courts (which have different rules in relation to enforcement of foreign judgments) could thereafter be referred to the Dubai Courts for execution onshore, with the DIFC Courts acting as a conduit for enforcement of the foreign judgment. However, the DIFC Courts have confirmed, in DNB Bank ASA v Gulf Eyadah Corporation & Gulf Navigation Holding PJSC, that the DIFC Court does not have the power to act as a conduit jurisdiction in relation to judgements of foreign courts (click here for our article on this case).
The effect of this judgment is that a party seeking to enforce a foreign judgment in the UAE’s onshore jurisdictions must go through the procedures set out in the CPC and cannot attempt to circumvent these through first having the judgment ratified in the DIFC Courts.
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This article was co-authored by Hiba Mahmud, Associate, Construction, Dubai office.