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    Expert Insights

Lexology Getting The Deal Through, Enforcement of Foreign Judgments- Abu Dhabi 2023

Legislation

Treaties

Is your country party to any bilateral or multilateral treaties for the reciprocal recognition and enforcement of foreign judgments? What is the country’s approach to entering into these treaties, and what, if any, amendments or reservations has your country made to such treaties?

Neither the Authority of the Abu Dhabi Global Markets (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, nor the ADGM Courts themselves are capable of entering into international treaties. However, article 170 of the ADGM Courts, Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations 2015 makes clear that: ‘Where the UAE has entered into an applicable treaty with a foreign country for the mutual recognition and enforcement of judgments, the Courts shall comply with the terms of such treaty…’.

The UAE is a party to two principal multilateral treaties relating to the enforcement of foreign judgments, namely the 1983 Riyadh Arab Convention for Judicial Co-operation and the 1996 Gulf Co-operation Council (GCC) Convention for the Execution of Judgments, Delegations and Judicial Notifications.

The UAE is also party to a number of bilateral treaties covering the enforcement of foreign judgments, such as the 1992 Convention on Judicial Assistance, Recognition and Enforcement of Judgments in Civil and Commercial matters signed between France and the UAE, the 2004 Convention on Judicial Assistance in Civil and Commercial Matters between the United Arab Emirates and the People’s Republic of China, and the 2009 Agreement between the Republic of Kazakhstan and the United Arab Emirates on Judicial Assistance in Civil and Commercial Matters; and in 2020, a Declaration by the Indian Ministry of Law and Justice declared that the UAE is a reciprocating territory for the enforcement of foreign judgments.

Generally, the UAE federal government is open to signing and ratifying both bilateral and multilateral treaties providing for mutual enforcement. Where the UAE has entered into an applicable treaty, the ADGM Courts will comply with its terms. However, practitioners should check carefully whether an applicable treaty exists between the sending and receiving jurisdictions that covers foreign enforcement (as opposed to general judicial assistance), whether both jurisdictions have ratified the treaty following signature, and whether any material amendments or reservations have been made.

Intra-state variations

Is there uniformity in the law on the enforcement of foreign judgments among different jurisdictions within the country?

No. The ADGM Courts follows the civil law approach and requires the recognition of reciprocity between the ADGM Courts and the foreign jurisdiction prior to the rendering of the foreign judgment, recognition being proven by either the existence of an application treaty or, in the absence of an applicable treaty, where the Chief Justice of the Courts is satisfied that substantial reciprocity of treatment will be assured as regards the recognition and enforcement in that foreign country of the judgments of the Courts, usually following the entering into force of a memorandum of understanding between the ADGM Courts and the foreign jurisdiction.

The ADGM Courts are also a member of the Standing International Forum of Commercial Courts. Although the Forum’s Multilateral Memorandum on Enforcement of Commercial Judgments for Money is not a legally binding document and does not constitute a treaty, it is of assistance in some enforcement situations.

The Dubai International Finance Centre (DIFC) Courts, in contrast, will apply the general common law principles for the recognition and enforcement of foreign judgments from any sending jurisdiction. The UAE Courts other than the DIFC and the ADGM Courts take the civil law approach of requiring a higher level of proof of reciprocity between the UAE civil courts and the foreign jurisdiction.

The UAE onshore courts (ie, those other than the DIFC and ADGM Courts) also adopt the civil law approach embedded in UAE law of requiring an even higher level of proof of reciprocity between the UAE civil courts and the foreign jurisdiction. Since the implementation of article 85 of Cabinet Resolution No. 57 of 2018 concerning the Executive Regulations of Federal Law No. 11 of 1992 (as amended), the UAE Courts outside of the DIFC and ADGM should no longer refuse to enforce a foreign judgment (as was the historical practice) where it is found that the UAE Courts would have had jurisdiction over the underlying claim which resulted in the foreign judgment. Now, the UAE Courts can only refuse enforcement when they would have had exclusive jurisdiction over that claim. Furthermore, under the Cabinet Resolution, the process for enforcing a foreign judgment in the UAE Courts has been streamlined. The judgment creditor may bring a claim directly before an enforcement judge who will determine the claim on an expedited basis without notice to the judgment debtor, although this process remains subject to appeal.

Sources of law

What are the sources of law regarding the enforcement of foreign judgments?

The main sources of law in the ADGM Courts for the enforcement of foreign judgments are the ADGM Founding Law (Abu Dhabi Law No. 4 of 2013 as amended by Abu Dhabi Law No. 12 of 2020) on the jurisdiction of the ADGM Courts (at section 13(17)) and the ADGM Courts, Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations 2015 (as amended; principally Chapter 10, Part 6), which constitutes the ADGM’s own law on enforcement. The process for enforcement is set out in the ADGM Court Procedure Rules 2016  (as amended) and guidance is given in Practice Direction 10 on enforcement.

Practitioners should also check whether an appropriate memorandum of guidance is in force. The ADGM Courts have entered into a number of memoranda of guidance setting out the agreed procedure for the reciprocal recognition and enforcement of judgments with other common law jurisdictions, including the Commercial Court, Queen’s Bench Division, England and Wales, Supreme Court of the Republic of Singapore, Federal Court of Australia, Supreme Court of New South Wales, and High Court of the Hong Kong Special Administrative Region of the People’s Republic of China.

There has been no published enforcement of a foreign judgment in the ADGM Courts at the time of writing.

Hague Convention requirements

To the extent the enforcing country is a signatory of the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, will the court require strict compliance with its provisions before recognising a foreign judgment?

The UAE is not a party to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters.

Bringing a claim for enforcement 

Limitation Period

What is the limitation period for enforcement of a foreign judgment? When does it commence to run? In what circumstances would the enforcing court consider the statute of limitations of the foreign jurisdiction?

Under section 2 of the Application of English Law Regulations 2015, the law of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, applies a modified form of English law including parts of English statues. The ADGM therefore directly applies section 24 of the Limitation Act 1980, which provides that the time limit for actions to enforce judgments is six years from the date on which the judgment became enforceable, and that no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due. Section 24 of the Limitation Act is also found in part in section 173(1) of the ADGM Courts etc Regulations 2015.

Types of enforceable order

Which remedies ordered by a foreign court are enforceable in your jurisdiction?

The ADGM Founding Law as amended says at section 13(17) that ‘Subject to any Regulations issued by the Board of Directors, including any provisions for the protection of Netting Agreements, any judgments, decisions, orders or arbitral awards rendered, recognised or ratified by courts, or by an arbitrator or arbitrators outside the Global Market shall, upon application by the concerned party, be enforced within the Global Market in accordance with the Global Market Regulations.’

A foreign ‘judgment’ capable of enforcement under the ADGM Courts etc Regulations 2015 is defined at section 167(1)(e) as being a judgment, decision or order given or made by a recognised court in any civil proceedings (see also rule 297(1)(b), ADGM Court Procedure Rules). On its face, these provisions would indicate a permissive attitude to the enforcement of injunction and permanent injunctions, orders for specific performance and similar non-money judgment remedies made by foreign courts.

However, section 177 refers to ‘any sum of money payable under, or for any other relief which is the subject of, a judgment of a recognised court, being a judgment to which this Chapter applies’. Further, Practice Direction 10, which sets out the practical steps for enforcement, says that the relevant court forms (a claim using Form CFI 27 and evidence in support using Form CFI 15) requires a statement of ‘confirmation that the judgment is a money judgment’ (paragraph 10.9(c)). There is a rebuttable presumption in favour of the enforcement of foreign money judgments at section 171(2) of the ADGM Courts etc Regulations 2015: ‘The Courts shall recognise and enforce judgments for the payment of a sum of money rendered by a recognised foreign court in accordance with this Chapter, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty’.

Thus, although there has not been any judicial consideration of these provisions to date by the ADGM Courts, it is likely that the Court would only be prepared to enforce foreign money judgments. In respect of other orders, such as interim and permanent injunctions and orders for specific performance, although these are not directly enforceable and a fresh action would be required, the ADGM Court would treat the foreign court’s order as persuasive, provided jurisdiction can be established on a standalone basis.

Competent courts

Must cases seeking enforcement of foreign judgments be brought in a particular court?

Yes. An application for registration of a qualifying court's judgment is made by filing a claim in the Court of First Instance (rule 298(1), ADGM Court Procedure Rules).

Separation of recognition and enforcement

To what extent is the process for obtaining judicial recognition of a foreign judgment separate from the process for enforcement?

Rules 298(1) and (3) of the ADGM Court Procedure Rules indicates that there is a two-stage process and that the applications for registration of the foreign judgment must be made first. This first stage takes place on an ex parte basis. Following the granting of a registration order by the Court, the judgment creditor must serve the registration order on the judgment debtor in accordance with Part 4 and within 21 days after the date of issuing of the order or within such other period as the Court may order otherwise (rule 300). An application to set aside registration of a judgment must be made by application notice filed in the claim in which the judgment was registered within the time specified in the registration order (rule 301(2)). If any party has made an application to have the registration of a judgment set aside, the foreign judgment shall not be enforced until after the application has been finally determined (rule 301(3)).

See also Chapter 10, Part 6 of the ADGM Courts etc Regulations 2015, and section B of Practice Direction 10.

Opposition

Defences

Can a defendant raise merits-based defences to liability or to the scope of the award entered in the foreign jurisdiction, or is the defendant limited to more narrow grounds for challenging a foreign judgment?

Challenges to registration and enforcement of foreign judgments are limited to largely procedural aspects of the foreign judgment process. Section 175 of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, Courts etc Regulations 2015 sets out the instances in which a registered judgment must or may be set aside. The mandatory grounds for set aside are stipulated at section 175(1)(a), namely if the Court of First Instance is satisfied that:

The judgment is not a judgment to which this Chapter (ie, Chapter 10 on Enforcement) applies or was registered in contravention of this Chapter;
The original court had no jurisdiction in the circumstances of the case;
Where it was given in default, if the judgment debtor was not duly served with the documents which instituted the proceedings or with an equivalent document, in accordance with the law of the country of the original court, in sufficient time to enable him or her to arrange for his or her defence;
The judgment was obtained by fraud;
The rights under the judgment are not vested in the person by whom the application for registration was made; or
The enforcement of the judgment would be contrary to public policy in the Emirate or the Abu Dhabi Global Market.

The discretionary grounds for set aside are stipulated at section 175(1)(b), namely if the Court of First Instance is satisfied that the matter in dispute in the proceedings in the original court had previously, to the date of the judgment in the original court, been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.

For the purposes of section 175(1), section 175(2) sets out when the courts of the country of the original court shall be deemed to have had jurisdiction, namely where:

(a) In the case of a judgment given in an action in personam:

If the judgment debtor, being a defendant in the original court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings;
If the judgment debtor was a claimant or counter-claimant in the proceedings in the original court;
If the judgment debtor, being a defendant in the original court, had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or of the courts of the country of that court;
If the judgment debtor, being a defendant in the original court, was at the time when the proceedings were instituted, resident in, or being a body corporate was registered under the laws of, the country of that court; or
If the judgment debtor, being a defendant in the original court, had an office or a place of business in the country of that court and the proceedings in that court were in respect of a transaction effected through or at that office or place;

(b) in the case of a judgment given in an action the subject matter of which was immovable property, or in an action in rem the subject matter of which was moveable property, if the property in question was at the time of the proceedings in the original court situated in the country of that court; and

(c) in the case of judgment given in an action other than any such action as is mentioned in paragraph (a) or (b), if the jurisdiction of the original court is recognised by any Applicable Abu Dhabi Law or any ADGM enactment.

Under rule 252 of the ADGM Court Procedure Rules on the effect of setting aside a judgment or order, if a judgment or order is set aside, any enforcement of the judgment or order shall cease to have effect unless the Court otherwise orders.

Injunctive relief

May a party obtain injunctive relief to prevent foreign judgment enforcement proceedings in your jurisdiction?

An enforcement proceeding in the ADGM Courts is brought via an application using Form CFI 5 with supporting evidence that must be served on the judgment debtor as the defendant to the proceeding. The procedure is set out in rule 298 of the ADGM Courts Procedure Rules and Practice Direction 10. The foreign judgment is not recognised and enforced until the disposal of the claim, either via immediate (summary) judgment or after trial. While it may be open to the defendant or another party to obtain injunctive relief restraining the claim, practically there will be no need because the defendant will be on notice of the claim following registration of the judgment and can resist it at the immediate judgment application or trial stages, or both. The ADGM Courts may recognise and enforce (or make its own appropriate order in light of) an injunction from another court preventing reliance on or compliance with a foreign judgment.

Requirements for recognition

Basic requirements for recognition

What are the basic mandatory requirements for recognition of a foreign judgment?

The basic mandatory requirements are set out at Chapter 10, Part 6, of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates Courts etc Regulations 2015, at articles 172 and 175, and include:

The judgment must a judgment of a recognised court, namely, one issued by the courts of countries (a) that have entered into an applicable treaty with the UAE for the mutual recognition and enforcement of judgments, or (b) in the absence of an applicable treaty, where the Chief Justice of the Courts is satisfied that substantial reciprocity of treatment will be assured as regards the recognition and enforcement in that foreign country of the judgments of the Courts (the ‘recognised foreign courts’).
The judgment must satisfy the following conditions: (a) it is either final and conclusive as between the judgment creditor and the judgment debtor or requires the latter to make an interim payment to the former; and (b) there is payable under it a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect to a fine or other penalty.
The judgment creditor will have to establish that that court had jurisdiction according to the English rules on the conflict of laws to determine the subject matter of the dispute. The recognised court shall be deemed to have had jurisdiction if the judgment debtor satisfies one of the criteria set out at section 175(2).
However, a judgment shall not be registered if at the date of the application (a) it has been wholly satisfied; or (b) it could not be enforced by execution in the country of the original court.

Other factors

May other non-mandatory factors for recognition of a foreign judgment be considered and, if so, what factors?

Yes. article 175(1)(b) stipulates that registration of a foreign judgment may be set aside if the Court of First Instance is satisfied that the matter in dispute in the proceedings in the original court had previously, to the date of the judgment in the original court, been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.

Furthermore, the judgment debtor may challenge the jurisdiction of the ADGM Courts under rules set out in the ADGM Court Procedure Rules. Rule 38 of the ADGM Court Procedure Rules sets out the procedure for disputing the Court’s jurisdiction. Rule 38(2) allows that a defendant who wishes to dispute the Court’s jurisdiction to try the claim, or who wishes to argue that the Court should not exercise its jurisdiction, may apply to the Court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.

Procedural equivalence

Is there a requirement that the judicial proceedings where the judgment was entered correspond to due process in your jurisdiction and, if so, how is that requirement evaluated?

The ADGM Courts do not re-examine the merits of a foreign judgment, which means that a foreign judgment may not be challenged on the grounds that it contains an error of fact or law. A consideration of whether the judicial proceedings where the judgment was entered corresponded to due process in the ADGM Courts is not a mandatory condition under section 175(1) of the ADGM Courts etc Regulations 2015.

However, once the territorial or consensual jurisdiction of the foreign court is established, or both, recognition and enforcement of a foreign judgment may be refused by the ADGM Courts under its general case management powers and common law principles of enforcement of foreign judgments if it is determined that the foreign proceedings were conducted in a manner that the ADGM Courts regard as contrary to the principles of natural justice. This may include a consideration of whether the judicial proceedings where the judgment was entered corresponded to due process in the ADGM Courts, in a fact-sensitive enquiry.

Jurisdiction of the foreign court

Personal jurisdiction

Will the enforcing court examine whether the court where the judgment was entered had personal jurisdiction over the defendant and, if so, how is that requirement met?

Yes. Recognition and enforcement of the foreign judgment shall be refused if the Court of First Instance of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, is satisfied that the original court had no jurisdiction in the circumstances of the case (ADGM Courts etc Regulations 2015, section 175(1)(a)(ii)).

Under section 175(2)(a), for the purposes of enforcement, the courts of the country of the original court are deemed to have had jurisdiction – in the case of a judgment given in an action in personam:

If the judgment debtor, being a defendant in the original court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings;
If the judgment debtor was a claimant or counter-claimant in the proceedings in the original court;
If the judgment debtor, being a defendant in the original court, had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or of the courts of the country of that court;
If the judgment debtor, being a defendant in the original court, was at the time when the proceedings were instituted, resident in, or being a body corporate was registered under the laws of, the country of that court; or
If the judgment debtor, being a defendant in the original court, had an office or a place of business in the country of that court and the proceedings in that court were in respect of a transaction effected through or at that office or place.

Subject-matter jurisdiction

Will the enforcing court examine whether the court where the judgment was entered had subject-matter jurisdiction over the controversy and, if so, how is that requirement met?

Yes. Recognition and enforcement of the foreign judgment shall be refused if the ADGM Court of First Instance is satisfied that the original court had no jurisdiction in the circumstances of the case (ADGM Courts etc Regulations 2015, section 175(1)(a)(ii)).

Under section 175(2)(b), for the purposes of enforcement, the courts of the country of the original court shall be deemed to have had jurisdiction in the case of a judgment given in an action the subject matter of which was immovable property, or in an action in rem the subject matter of which was moveable property, if the property in question was at the time of the proceedings in the original court situated in the country of that court.

Service

Must the defendant have been technically or formally served with notice of the original action in the foreign jurisdiction, or is actual notice sufficient? How much notice is usually considered sufficient?

Recognition and enforcement of the foreign judgment shall be refused if the ADGM Court of First Instance is satisfied that, where it was given in default, the judgment debtor was not duly served with the documents that instituted the proceedings or with an equivalent document, in accordance with the law of the country of the original court, in sufficient time to enable him or her to arrange for his or her defence (ADGM Courts etc Regulations 2015, section 175(1)(a)(iii)).

Fairness of foreign jurisdiction

Will the court consider the relative inconvenience of the foreign jurisdiction to the defendant as a basis for declining to enforce a foreign judgment?

The ADGM Courts do not re-examine the merits of a foreign judgment, which means a foreign judgment may not be challenged on the grounds that it contains an error of fact or law. The relative inconvenience of the foreign jurisdiction to the defendant is not a mandatory condition under section 175(1) of the ADGM Courts etc Regulations 2015. However, once the territorial or consensual jurisdiction of the foreign court is established, recognition and enforcement of a foreign judgment may be refused by the ADGM Courts under its general case management powers and common law principles of enforcement of foreign judgments or via a challenge to the Courts’ jurisdiction if it is determined that the foreign proceedings were conducted in a manner that the ADGM Courts regard as contrary to the principles of natural justice. This may include a consideration of the inconvenience of the foreign jurisdiction to the defendant, in a fact-sensitive enquiry.

Examination of the foreign judgement 

Will the court examine the foreign judgment for allegations of fraud upon the defendant or the court?

Recognition and enforcement of the foreign judgment shall be refused if the Court of First Instance of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, is satisfied that the judgment was obtained by fraud (ADGM Courts etc Regulations 2015, section 175(1)(a)(iv)).

Public policy

Will the court examine the foreign judgment for consistency with the enforcing jurisdiction’s public policy and substantive laws?

Recognition and enforcement of the foreign judgment shall be refused if the ADGM Court of First Instance is satisfied that the enforcement of the judgment would be contrary to public policy in the Emirate or the ADGM (ADGM Courts etc Regulations 2015, section 175(1)(a)(vi)).

Conflicting decisions

What will the court do if the foreign judgment sought to be enforced is in conflict with another final and conclusive judgment involving the same parties or parties in privity?

Section 175(1)(b) of the ADGM Courts etc Regulations 2015 establishes that on an application made by any party against whom a registered judgment may be enforced, the registration of the judgment may be set aside if the Court of First Instance is satisfied that the matter in dispute in the proceedings in the original court had previously, to the date of the judgment in the original court, been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.

Enforcement against third parties

Will a court apply the principles of agency or alter ego to enforce a judgment against a party other than the named judgment debtor?

The ADGM Courts are, as far as we are aware, yet to directly address principles of ‘agency’ or ‘alter ego’ within the context of enforcement of foreign judgments. However, it is likely that the Court would following the common law generally and English precedents (Prest v Petrodel Resources Limited [2013] UKSC 34 and more recently Hurstwood Properties (A) Ltd & Ors v Rossendale Borough Council [2021] UKSC 16), which confirm that there are likely to be only very limited circumstances in which the liability of a judgment debtor can be attributed to a third party through the ‘lifting’ or ‘piercing’ of the ‘corporate veil’. This attribution relies on clear evidence of fraud, dishonesty or evasiveness with regard to existing liabilities through the misuse or abuse of corporate structures.

Rule 248 of the ADGM Court Procedure Rules covers enforcement of a judgment or order by or against a non-party. If a judgment or order is given or made in favour of or against a person who is not a party to proceedings, it may be enforced by or against that person by the same methods as if he or her was a party.

Alternative dispute resolution

What will the court do if the parties had an enforceable agreement to use alternative dispute resolution, and the defendant argues that this requirement was not followed by the party seeking to enforce?

The enforcement of a foreign judgment in the ADGM Courts may be challenged where the judgment is rendered in a proceeding brought contrary to a jurisdiction or arbitration agreement. If the agreement also contains an obligation to alternative dispute resolution (for instance, as part of a multi-tiered ‘step’ or ‘escalation’ clause), which is sufficiently certain so as to be enforceable, then it may be open to the ADGM Courts to conclude that the foreign court did not have jurisdiction because the person against whom enforcement is sought did not agree to submit to the jurisdiction of the foreign court prior to commencement of the proceeding and in respect of its subject matter. However, given the common law’s preference to not disturb the reasoning of the foreign court, this does not necessarily vitiate the ADGM Courts concluding that the foreign court had jurisdiction on the territorial basis, nor that the foreign judgment was rendered without being contrary to the public policy of the UAE or where the proceedings were conducted in a manner which the AGDM Courts would not regard as contrary to the principles of natural justice. The ADGM Courts are likely to follow the principles analysed by Hildyard J in Tang Chung Wah (Aka Alan Tang) and anor v Grant Thornton International Limited and ors [2012] EWHC 3198 (Ch) that the overarching test of enforceability is ‘whether the obligations and/or negative injunctions it imposes are sufficiently clear and certain to be given legal effect’.

Favourably treated jurisdictions

Are judgments from some foreign jurisdictions given greater deference than judgments from others? If so, why?

Yes. Judgments can only be enforced in the ADGM Courts if a pre-existing reciprocal agreement covering enforcement (ie, a memorandum of understanding or an international treaty) and a Chief Justice’s direction are in force. Judgments from the Courts of the Emirate of Abu Dhabi and Ras Al Khaimah are covered by existing memorandums of understanding.

Alteration of awards

Will a court ever recognise only part of a judgment, or alter or limit the damage award?

The English Protection of Trading Interests Act 1980 is not expressly part of ADGM law by operation of the ADGM Application of English Law Regulations 2015, and it is unclear at present whether the prohibition on the enforcement of a judgment for multiple damages exists in ADGM law as part of the wider common law enforced in the ADGM. There is no provision under ADGM law that permits the multiplication of actual damages awarded to a party.

If faced with unenforceable parts of a foreign judgment, the DIFC Courts are therefore likely to take the approach in Pace Europe Ltd and others v Dunham and another [2012] EWHC 852 (Ch)) and enforce those elements of the foreign judgment capable of enforcement.

Also, under section 176(3) of the ADGM Courts etc Regulations, where the registration of a judgment is set aside solely for the reason that the judgment, notwithstanding that it had, as at the date of the application for registration, been partly satisfied, was registered for the whole of any sum payable under the judgment, the Court of First Instance shall, on the application of the judgment creditor, order judgment to be registered for the balance remaining payable at that date.

Awards and security for appeals

Currency, interest, costs

In recognising a foreign judgment, does the court convert the damage award to local currency and take into account such factors as interest and court costs and exchange controls? If interest claims are allowed, which law governs the rate of interest?

Section 173(8) of Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates Courts etc Regulations 2015 sets out that in addition to any sum of money payable under the judgment of the original court, including any interest, which by the law of the country of the original court becomes due under the judgment up to the time of registration, the judgment shall be registered for the reasonable costs of and incidental to registration, including the costs of obtaining a certified copy of the judgment from the original court.

Practice Direction 10, at paragraph 10.9(h), stipulates that when making a claim for enforcement, witness evidence must be provided setting out, where interest is recoverable under the state in which the judgment was given, (1) the law of that state under which interest has become due under the judgment; (2) the amount of interest that has accrued up to the date of the application; and (3) the rate of interest, the date from which it is recoverable and the date on which it ceases to accrue.

Legal costs of enforcement in the ADGM Courts proceeding are recoverable under the usual common law rules (ie, the loser pays the winning party’s costs on either the standard or indemnity basis). These rules are set out at Part 24 of the ADGM Courts Procedural Rules and Practice Direction 9.

Security

Is there a right to appeal from a judgment recognising or enforcing a foreign judgment? If so, what procedures, if any, are available to ensure the judgment will be enforceable against the defendant if and when it is affirmed?

There is no automatic right of appeal from a judgment recognising or enforcing a foreign judgment. A judgment debtor may make an application for permission to appeal under Part 25 of the ADGM Court Procedure Rules and Practice Direction 11. Strict time periods apply for making an application for permission to appeal. The judgment subject to an application for permission to appeal is not stayed automatically merely because an application for permission has been made; a separate application must be made for a stay (rule 212). If the judgment recognising or enforcing a foreign judgment is stayed pending the disposal of an appeal, the judgment creditor may apply under Part 10 of the ADGM Court Procedure Rules for an interim injunction to protect the assets against which he or her anticipates being able to enforce, such as a freezing order, search order or an order for interim payment; or, under rule 76, for security for his or her costs of responding to the appeal.

Under rule 299 of the ADGM Courts Procedure Rules, a judgment creditor may apply for security for costs of the claim for registration of a recognised court’s judgment; any proceedings commenced to set aside the registration; and any appeal against the granting of the registration, as if the judgment creditor was a claimant. Part 30 of the ADGM Court Procedure Rules sets out the process for obtaining an order to obtain information from a judgment debtor.

Enforcement and pitfalls

Enforcement process

Once a foreign judgment is recognised, what is the process for enforcing it in your jurisdiction?

Section 173(4) of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, Courts etc Regulations 2015 sets out that, once a foreign judgment is recognised, is shall, for the purposes of enforcement, be of the same force and effect; proceedings may be taken on a registered judgment; any sum for which a judgment is registered shall carry interest; and the Court of First Instance shall have the same control over the enforcement of a registered judgment, as if the judgment had been a judgment originally given in the Court of First Instance and entered on the date of registration.

Rule 302 of the ADGM Courts Procedure Rules set out the procedure for the enforcement of the Courts’ judgments, which includes any decisions or orders that have been recognised by the Court. An application for a certified copy of a judgment of the Court made by any judgment creditor seeking to enforce it outside of ADGM must be supported by the documents set out in Practice Direction 10 (rule 302(2)). A judgment creditor seeking to enforce a judgment of either the onshore Abu Dhabi Courts, or Courts of any of the other Emirates in the UAE must comply with the applicable provisions of any relevant memorandum of understanding and practice direction (302(3)).

The ADGM Court Procedure Rules (especially Parts 30, 31 and 32) and Practice Direction 10 set out in detail what steps a judgment creditor may take after the enforcement of the foreign judgment, including the appointment of receivers by the Court, methods of enforcement against the judgment debtor including third party debt orders, and charging orders, stop orders and stop notices.

Pitfalls

What are the most common pitfalls in seeking recognition or enforcement of a foreign judgment in your jurisdiction?

The ADGM Courts cannot (unlike the Dubai International Finance Centre (DIFC) Courts) be used as a ‘conduit jurisdiction’, that is foreign judgments cannot be brought to the ADGM Courts with no intention to enforce against assets in the ADGM but with the intention of enforcing outside the ADGM the ADGM Courts’ judgment recognising and enforcing the foreign judgment. Practitioners should also ensure that the judgment they seek to enforce is covered by both a memorandum of understanding and an international treaty with the foreign jurisdiction and that the ADGM Courts Chief Justice has issued a direction recognising the foreign court as a foreign court. Furthermore, practitioners should ensure that the judgment to be enforced satisfies all of the conditions of section 172 of the ADGM Courts etc Regulations 2015 including that the judgment was given after the recognition of the foreign court by the Chief Justice and that it is a judgment of a recognised court and not another court (eg, on appeal).

Update and trends

Hot topics

Are there any emerging trends or hot topics in foreign judgment enforcement in your jurisdiction?

Unlike in the Dubai International Finance Centre (DIFC), the legislators of the Abu Dhabi Global Market (ADGM), a constituent jurisdiction of the Emirate of Abu Dhabi and of the United Arab Emirates, have made clear that its Courts are not to be used for ‘conduit’ enforcement. In A4 v. B4 [2019] ADGM CFI 0007, in proceedings that were undefended, Justice Sir Andrew Smith enforced a London arbitration award in circumstances where there was no evidence that either party had any assets in the jurisdiction or that the underlying contract or services were connected with the ADGM. The Judge found that the Court had a freestanding jurisdiction to enforce the award, applying a very similar analysis to that adopted by the DIFC Courts. This is, however, no longer an option in the ADGM since the ADGM Founding Law was amended by Abu Dhabi Law No.12 of 2020, which came into effect on 23 April 2020. The ADGM Courts’ Guide to Amendments to Article 13 of the ADGM Founding Law says, at paragraph 11, ‘Put simply, parties cannot use ADGM for the enforcement of non-ADGM judgments and awards in other jurisdictions – the limited exception being where the originating judgment comes from another court within the Emirate.’ Parties can still enforce foreign judgments in the ADGM in circumstances where there are no assets in that jurisdiction, but the ADGM Courts will not assist with the onward enforcement of the foreign judgment in any court outside the ADGM. The Guide confirms, ‘As a matter of principle, it has always been ADGM Courts’ position that parties should go to the place where the relevant assets are located for the purpose of enforcement.’ (paragraph 12).

The ADGM Courts will also act in relation to recognition and enforcement proceedings in other jurisdictions. In In the Matter of NMC Healthcare Limited (in administration) and others  [2022] ADGM CFI 0002, 1 April 2022, Justice Sir Andrew Smith exercised the Court's discretion to grant declarations to facilitate the recognition and enforcement Deeds of Company Arrangement of 25 companies registered in the ADGM which had been placed into administration. In NMC Healthcare Limited (in administration) v Noor Capital PSC [2022] ADGMCFI 0003, the Court of First Instance made an ex parte interim "anti-suit" injunction prohibiting the respondent bank from continuing proceedings, including execution or enforcement proceedings, in the Dubai Courts in respect of a debt claim it held against the applicant company which was in administration in the ADGM Courts. 

Reproduced with permission from Law Business Research Ltd. This article was first published in Lexology GTDT – Enforcement of Foreign Judgments 2023. For further information, please visit: https://www.lexology.com/gtdt

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