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July 21, 2019

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UAE legislative framework empowers courts to enforce judgments issued by foreign courts under specific conditions. This is in accordance with Article 85 of Cabinet Decision No. 57/2018 On the Regulation of Federal Law No. 11/1992 on the Civil Procedure (the Civil Procedures Regulations) which states that:

"1. Judgments and orders delivered by a foreign country may be ordered to be executed in the State under the same conditions as prescribed in the law of that country for the execution of judgments and orders issued in the State. 

2. The order for execution, including the particulars specified in Article (16) of this Regulation shall be made on a petition and submitted by the person concerned to the execution judge. The judge shall issue his order within five days from the date of its submittal. His order may be appealed in accordance with the rules and procedures prescribed for filing an appeal. It shall not be possible to order the execution before the verification of the following: 

A. The Courts of the State are not exclusively competent in the dispute in which the judgment or order was rendered and the foreign Courts that issued it are competent in accordance with the rules of international jurisdiction established by their law. 

B. The judgment or order is issued by a Court in accordance with the law of the country in which it was issued and duly ratified. 

C. The litigants in the case in which the foreign judgment was delivered were summoned and were duly represented. 

D. The judgment or order has the force of res judicata in accordance with the law of the Court issuing it, provided that the judgment has acquired the force of res judicata or provided for in the same judgment. 

E. The judgment does 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. 

3. The enforcement judge shall have the right to obtain the documents supporting the application before issuing his decision."

The petition for enforcement of a foreign judgement should contain the information as required under Article 16 of the Civil Procedures Regulations, which state as follows. 

“1. The lawsuit shall be filed before the Court, upon the plaintiff's request, by submitting his statement of claim to the case management office electronically or in writing as applicable in the Court. 

2. The statement of claim shall contain the following data: 

A. The plaintiff's name, surname, ID number or a photocopy thereof, or any similar documents issued by government entities confirming his identity, profession, occupation, domicile, workplace, phone number, fax number or e-mail -the plaintiff has no domicile in the State, domicile shall be elected therefor -as well as the name of his representative, his surname, ID number, occupation, job, domicile, workplace, fax number or e-mail address.

B. The defendant's name, surname, ID number (if any), profession or job, domicile or elected domicile, residence, workplace, phone number, e-mail address, and fax number - if the defendant has no domicile in the State, domicile shall be elected therefor - as well as his representative's name, surname, profession or job, domicile and workplace, if he works for others. However, in case neither the defendant nor his representative has a known domicile or workplace, the last domicile, residence or workplace and fax number or e-mail address thereof shall be mentioned.

C. The Court before which the lawsuit is filed.

D. The date of filing the statement of claim with the case management office.

E. The subject matter of the lawsuit, the demands and grounds thereof.

F. The signature of the plaintiff or his representative, after verifying the identity of each of them.”

The courts can hear claims against the parties based in other jurisdictions if the conditions as set out in Article 85 are met. The approach towards enforcement of the judgment and other procedures concerning civil proceedings is in accordance with the Civil Procedures Law. 

Parties to the contract often refer to the courts or independent authorities who will have jurisdiction in the case of a dispute. However, the Law of UAE supersedes the agreement between the parties, if the courts of UAE inherit the authority on the said matter under the Civil Procedures Law.

It has been held by the Dubai Court of Cassation that jurisdiction clauses are void if the subject matter opposes the public policy of the country, accordingly, the Dubai court will have exclusive jurisdiction.

Be Careful Before Finalising Commercial Contracts!

Whether the judgments issued by foreign courts will hold a practical stance in Dubai courts is still a question up for debate. Thus, parties must carefully opt for competent jurisdiction bearing in mind the enforcement procedure. The probability of any difficulty during execution would reduce to nil if the civil proceedings were initiated before the right court.

Parties must, therefore, appoint Corporate Lawyers of UAE to draft and finalise the contracts. Further, parties having claims against entities registered in Dubai might feel forced to initiate proceedings in a foreign jurisdiction due to the agreement in their contract, even though Dubai Courts will be apt for trying such matters. They may also seek redress from the courts in their home country, considering the language barrier in UAE.

In the event, the claimant for any reason obtains a foreign court's judgment against an entity registered in Dubai, they still hold an option to enforce the foreign judgment in Dubai Courts in accordance with Article 85 of the Civil Procedures Regulations. 

Furthermore, the conditions for enforcement set out in Article 85 of the Civil Procedures Regulations will apply to decisions of an arbitration award issued in a foreign country, subject to the condition that the award should be issued in a matter in respect of which arbitration is possible and the award was enforceable in the country in which it was issued. This is in accordance with Article 86 of the Civil Procedures Regulations which is highlighted below:

"The provisions of Article (85) of this Regulation shall apply to arbitrators' awards issued in a foreign country. The arbitrators' award shall be issued in a matter in respect of which arbitration is permissible pursuant to the law of the State and enforceable in the country in which it was issued."

In Dubai Court of Cassation judgment Number 269 of 2006, the plaintiff obtained a civil judgment from UK courts to be enforced against the defendant who was residing in Dubai. The request for enforcement was rejected by both the Court of First Instance and the Appeal Court of Dubai. The matter was thereafter, presented before the highest court of Dubai, the Court of Cassation. Unfortunately, the case was again rejected, and the court opined that since the plaintiff has failed to submit substantial proof evidencing a collaboration between UAE and the UK regarding enforcement of the foreign judgment, the case would be rejected.

On a similar note, in Dubai Court of Cassation, case number 517 (civil) on 28 August 2016, a judgment issued by the Californian court was presented before the Court of First Instance in Dubai against a party residing in Dubai. The petition was rejected by the Court of First Instance on the basis that there was no treaty in this regard between the United States and UAE. However, the Appeal Court reversed the decision passed by the lower court on the grounds that the conditions outlined in the Civil Procedure Code were met. The defendant filed an appeal before the Court of Cassation, wherein the judgment was again reversed on the same note as that of the Court of First Instance.

The judgments of Dubai courts affirm that, while it might be conceivable to enforce the foreign judgment by virtue of mutual collaboration or treaty, the absence of such a treaty will create a hindrance towards its implementation. It is indeed true that sometimes even the presence of a treaty will not guarantee the enforcement of a foreign judgment and UAE courts are renowned for declining such enforcement in such cases. Parties must bear in mind the difficulty of enforcing such a judgment against a party residing in Dubai, where the court has rejected to entertain the case due to a lack of mutual arrangements between the countries.

Conclusion

As a general practice, the courts in Dubai will have jurisdiction over the matter if either party is residing in Dubai, irrespective of the terms of the commercial contract, subject to the clause that the countries have mutual collaboration or agreement in that regard. Claimants must carefully consider prior to bringing any claims against a Dubai-based party, with obtaining a judgment from the foreign court not sufficient to meet the requirement. Thus, seeking advice from Commercial Lawyers of Dubai is utmost.


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