The UAE's new civil procedure – preparation may be required for the new year

A new law on civil procedure has been issued, Federal Law 42 of 2022 (New Law) which consolidates and takes the place of Federal Law No. 11 of 1992 on civil procedure and its executive regulations issued under Cabinet Resolution No. 57 of 2018 (Old Law). The New Law will come into force on 2 January 2023.

The New Law

Whilst the New Law does not overhaul civil procedure in the UAE, it introduces some significant changes. In particular the New Law provides for:

• a change to service outside the jurisdiction;
• a confirmation that cheques are “enforceable instruments; and
• changes in relation to appeals, including:
  • the manner in which the Court of Appeal will deal with appeals before it; and
  • changes to the period for appeals to the Court of Cassation.

Service outside the jurisdiction

Service outside the jurisdiction can be complex in the absence of a treaty between the UAE and the foreign country where the service is to take place.

Under the Old Law, service outside the jurisdiction was uncertain and protracted in the absence of a treaty. It was a process that involved various diplomatic channels of the UAE and the foreign jurisdiction where the foreign party was to be served.

Pursuant to Article 11(2) of the New Law, service outside the jurisdiction is now effected 21 working days from the date of the correspondence from the Ministry of Foreign Affairs to the diplomatic mission in the foreign country containing the notice and/or documents to be served. This is a change from the previous regime which required that  the diplomatic mission or the Ministry report back on service being effected.

Whilst this gives serving parties more certainty and confidence in their proceedings being progressed, parties to be served will need to be more vigilant as their receipt (or refusal) of process may no longer be a ground to avoid liability.

Confirmation that Cheques are 'enforceable instruments'

For an instrument to be enforced by the onshore Courts, it must fall within the definition of سند تنفيذي  (sannad tannfeethy).  This is often translated as 'writ of execution', 'enforceable deed' or 'enforceable instrument'.

Article 212 of the New Law sets out a list of enforceable instruments which remains unchanged from the Old Law. This list includes for example judgments of the onshore Courts and settlement agreements endorsed by them. The last category of enforceable instruments is a 'catch-all' provision which states that enforceable instruments include any "other documents that the law provides this force". Article 143(2) of the New Law, which deals with payment orders, appears to have confirmed this status for cheques in line with the position adopted by Federal Law No. 14 of 2020 amending Certain Provisions of the Federal Law No. (18) of 1993 Concerning the Commercial Transactions Law (which, amongst other matters, decriminalised bounced cheques).

Parties may apply to directly open enforcement files in respect of dishonoured cheques without having to commence substantive proceedings. Although this was already applied in practice as a result of Federal Law No. 14 of 2020, the New Law confirms the position which was not considered under the Old Law.

Court of Appeal

Parties have, over time, grown accustomed to an almost automatic appeals process in onshore UAE civil litigation. Whilst appeal rights continue, in principle, to be automatic, the Court of Appeal has been given new powers to filter appeals.

Under Articles 167(2) and (3) of the New Law, and similar to the Court of Cassation, there will be 'in chambers' review of appeals by the Court of Appeal. Following the referral of an appeal, the Court of Appeal has 20 working days to:

• issue a reasoned decision rejecting the appeal (for procedural or substantive reasons); or
• set a hearing to hear the substance of the appeal.

Whist this appears to be a process put in place to filter out appeals that lack merit (for whatever reason), this may, for some, be seen as an elimination of a substantive stage of litigation. Appellants will therefore need to carefully construct and present their appeals to try and avoid any procedural and/or substantive dismissal 'in chambers'. Respondents will obviously be seeking the opposite by aiming to identify the reasons for which appeals should be dismissed 'in chambers'.

Appeals to cassation

Pursuant to Article 178 of the New Law, the time limit for an appeal to cassation is now 30 days (which was previously 60). As noted above, the New Law comes into force on 2 January 2023. However, the following relevant exceptions may apply:

• the New Law shall not apply to cassations filed prior to 2 January 2023; and
• in relation to ongoing proceedings:
  • time related provisions where the time limit begins prior to the New Law coming into force shall not apply to those proceedings; and
  • the new time limit will not apply to judgments issued prior to the New Law coming into force.

Despite these exceptions, parties seeking to file cassations should be aware of the new time limit and err on the side of caution when considering the time limit for their appeals to cassation.