16 September 2022
Enforcement of foreign judgements in the UAE has always been seen as a complicated step, and an important part of a claimant’s assessment of litigation risk when pursuing claims across jurisdictions.
On 13 September 2022, in a potentially significant step towards the enforcement of England & Wales court judgments in the UAE, the UAE’s Ministry of Justice (MOJ) has requested that the Dubai Courts take note of the English Supreme Court judgment in Lenkor Energy Trading DMCC v Puri (2020) EWHC 75 (QB) (Lenkor), and reciprocate in the enforcement of England & Wales judgments in the onshore Dubai Courts (MOJ’s Request).
The MOJ’s Request began by noting that the Treaty between the UK and UAE on judicial assistance, which entered into force on 2 April 2008, does not provide for the reciprocal enforcement of Court judgments. Notably, that treaty is limited to:
The MOJ’s Request continued by referring to Article 85 of UAE Cabinet Resolution No. (57) of 2018 Concerning the Executive Regulations of Federal Law No. (11) of 1992 on the Civil Procedure Law (Article 85) which provides (in translation):
“Judgments and orders issued in a foreign country may be ordered to be enforced in the [UAE] under the same conditions prescribed in the Law of the foreign country for the enforcement of judgments and orders issued in the [UAE].”
It went on to note that UAE legislation has not made it a requirement that the UAE must have a bilateral treaty in place before the UAE can enforce a foreign judgment.
The driving force behind the MOJ’s Request is the landmark English Supreme Court decision in Lenkor, which ordered that a Dubai Court judgment against the defendant should be enforced against him in England without examining the merits of the underlying dispute.
The MOJ’s Request concluded with the hope that, in light of the English Courts initiating the principle of reciprocity with the UAE, the Dubai Courts can follow suit at such time as they are requested to enforce an English court judgment.
The MOJ’s Request is certainly a significant indication that the onshore Courts of Dubai may soon be following the position in the Courts of the Dubai International Financial Centre (DIFC Courts). The DIFC Courts, which operate in Dubai’s common law based financial freezone independently from the jurisdiction of the onshore Dubai Courts, have had a long-standing reciprocal enforcement regime with the English Courts. The DIFC Courts, however, are often only used where the assets are located in the DIFC as there is some risk to parties trying to use the DIFC Courts as a conduit to ultimately enforce in the Dubai Courts against assets located in onshore Dubai.
Despite the positivity, it must be accepted that the MOJ’s Request is neither legislation nor a binding direction to the Dubai Courts that it must enforce English judgments. Furthermore, even if the Dubai Courts take into account the decision by the English Supreme Court in Lenkor, there are other hurdles under Article 85 which the Dubai Courts must take into account and which can result in the UAE Courts refusing enforcement of a foreign judgement including, amongst others, that:
The wait to see if the Dubai Courts will follow suit and engage in a policy of reciprocal enforcement may be short. As reported in our articles on 21 December 2021 and 10 March 2022 our Dubai team and their local counsel succeeded in the Dubai Court of First Instance and Court of Appeal for the recognition and enforcement of a judgment issued by the Courts of England & Wales in the onshore Dubai Courts. The Dubai Court of Cassation is expected to issue a judgment in the coming months which will clarify whether the UAE Courts will indeed pursue a different approach to enforcement, at which point the floodgates to the future enforcement of English court judgments may just open.