An encouraging step forward for creditors: UAE Ministry of Justice urges Dubai Courts to enforce English Court Judgments

On 13 September 2022, the Director of the International Cooperation Department of the UAE Ministry of Justice (MOJ) issued a letter to the Director General of the Dubai Courts regarding the enforcement of English Court judgments in the UAE (the MOJ Letter).

The MOJ Letter referred to the English case of Lenkor Energy Trading DMCC v Puri (2020) EWHC 75 (QB) (Lenkor), in which the English High Court decided to enforce a judgment of the Dubai Courts, and called upon the Dubai Courts to take this into account when considering applications seeking the enforcement of judgments and orders issued in the courts of England and Wales (the English Courts).

What is the current position?

For the purposes of enforcement in the UAE, foreign judgments are classified as judgments and orders which have been issued by a foreign state which are capable of enforcement and execution in the UAE. 

The UAE Courts will only enforce a foreign judgment provided certain conditions are met. Those conditions are set out in Article 85 of Cabinet Resolution No.57 of 2018 concerning the Executive Regulation of the Civil Procedure Code (Federal Law No.11 of 1992, as amended) (the Executive Regulations).

In our experience, enforcing foreign judgments or orders through the Dubai Courts can be challenging due to the requirement for (amongst others) proving reciprocity of enforcement between the countries in question. Whilst there is a treaty between the UAE and the UK on judicial assistance in civil and commercial matters (the Treaty) [1], there is no treaty for the mutual recognition and enforcement of court judgments between the two countries.

The term “reciprocity” is not expressly used in the Executive Regulations. However, in our experience, this is how it has been interpreted by the UAE Courts in practice and is consistent with the application of the previous legislation which was superseded by Article 85 of the Executive Regulations. The MOJ Letter also explicitly refers to the principle of reciprocity, indicating that it is an accepted requirement, despite the arguable ambiguity of the Executive Regulations.

As a result, historically, the Dubai Courts have generally refused to enforce English Court judgments for reasons including because the English Courts generally do not enforce Dubai Court (or other UAE Court) judgments.

Lenkor

Lenkor applied for summary judgment in the English High Court, seeking recognition and enforcement of a judgment of the Dubai Courts against the defendant, Puri (Dubai Court Judgment). The defendant resisted the application on the basis that the recognition and enforcement of the Dubai Court Judgment in England would be contrary to public policy.

In a somewhat landmark decision, Lenkor was successful and the English High Court ordered to enforce the Dubai Court Judgment. The High Court’s decision was upheld by the English Court of Appeal in 2021 and the defendant’s further appeal to the UK Supreme Court was refused permission. The absence of a Supreme Court judgment on this issue may not be a significant factor for the purposes of establishing reciprocity in the UAE.

The MOJ Letter

The MOJ Letter refers to the Treaty (and specifically, the lack of reference to enforcement of foreign judgments in the Treaty), Article 85 of the Executive Regulations, and the decision made by the English High Court in Lenkor. It then goes on to state:

“Accordingly, we kindly hope that, in the event of requests for the enforcement of judgments and orders rendered by the English courts, the requisite legal steps are taken in accordance with the laws in force in both countries, in order to consolidate the principle of reciprocity initiated by the English courts, and to ensure its continuity between the English courts and the UAE courts". [2]

Whilst we have seen some market commentary suggesting the MOJ Letter confirms that the Dubai Courts will now enforce English Court judgments, it perhaps does not go that far; its status appears to be not more than a non-binding ‘suggestion’ to the Dubai Courts on how they might apply the law in relation to such enforcement. It does not necessarily mean that English Court judgments will now be readily enforced in Dubai, although that appears to be the MOJ’s ambition in making the suggestion and it arguably does increase the likelihood of successful enforcement in general terms.   

It is also noteworthy that the letter is addressed to the Dubai Courts only, and not the Federal Courts or Courts of other Emirates, so their stance remains to be seen; some may even argue that the MOJ’s acceptance that reciprocity is a requirement for enforcement and has been established in Dubai may give rise to an argument that the other UAE Courts may decline to enforce on the basis reciprocity has not been established between those courts and the English Courts. As such, in our view, applications to the UAE Courts to enforce judgments or orders of the English Courts will still need to satisfy the requirements of Article 85 of the Executive Regulations, including the need to prove reciprocity of enforcement between the two countries.

Nevertheless, this is a significant development and another positive step forward in Dubai (and potentially the UAE by extension) becoming more pro-enforcement, which provides encouragement to creditors and others seeking to enforce English Court judgments in the UAE. We are aware that the Dubai Court of First Instance and Court of Appeal have within the past 12 months in at least one case ordered recognition and enforcement of a judgment issued by the English Courts, which may well be upheld by the Dubai Court of Cassation.

How can we help?

We are experienced in advising and acting for clients seeking enforcement of foreign judgments, orders, and arbitration awards in the UAE Courts (including the Courts of the Dubai International Financial Centre and the Courts of the Abu Dhabi Global Market).

Please contact Keith Hutchison, Alexandra Lester or Lucy Nash further advice and assistance.

^{[1] Treaty between the United Arab Emirates and the United Kingdom of Great Britain and Northern Ireland on Judicial Assistance in Civil and Commercial Matters (which entered into force on 2 April 2008).}

^{[2] There is no official translation of the MOJ Letter. This text is taken from a certified legal translation of the Arabic original.}