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Enforcement of Foreign Judgments - DIFC

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?

The Dubai International Financial Centre (DIFC) is a constituent jurisdiction of the emirate of Dubai and of the United Arab Emirates. Neither the DIFC Authority nor the DIFC Courts themselves are capable of entering into international treaties. However, article 24(2) of the DIFC Court Law (DIFC Law No. 10 of 2004) makes clear that: ‘Where the UAE has entered into an applicable treaty for the mutual enforcement of judgments, orders or awards, the Court of First Instance 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 a 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; 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 DIFC 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 DIFC Courts apply the general common law principles for the recognition and enforcement of foreign judgments from any sending jurisdiction and do not require reciprocity between the foreign court and the DIFC Courts to be proven (although a number of memorandums of understanding or guidance agreed between the DIFC Courts and the courts of numerous foreign jurisdictions set out a process for the enforcement of foreign money judgments).

The Abu Dhabi Global Market (ADGM) Courts follow the civil law approach and require the recognition of reciprocity between the ADGM Courts and the foreign jurisdiction prior to the rendering of the foreign judgment. Recognition is proven either (1) by the existence of a formal treaty or (2) 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 UAE ‘onshore’ courts (ie, those other than the DIFC Courts and the 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 the DIFC and the 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 that 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 principal sources of law include:

  • Dubai Law No. 12 of 2004 (as amended) in respect of the Judicial Authority at the Dubai International Financial Centre (known as the Judicial Authority Law);
  • the DIFC Court Law (DIFC Law No. 10 of 2004);
  • the Rules of the DIFC Courts; and
  • a growing body of case law relevant to the enforcement of foreign judgments, including:
    • DNB Bank ASA v Gulf Eyadah Corp [2015] DIFC CA 007;
    • Bocimar International NV v Emirates Trading Agency LLC [2015] DIFC CFI 008;
    • D'amico Shipping Italia Spa v Endofa DMCC [2016] DIFC CFI 042;
    • Barclays Bank PLC and Ors v Essar Global Fund Ltd [2016] DIFC CFI 036;
    • Akhmedova v Akhmedov [2018] DIFC CA 003; and
    • McConnell Dowell South East Asia Pte Limited v Essar Projects Limited [2018] DIFC CFI. 

In addition to the above, and although they do not have the force of law, the DIFC Courts have entered into memorandums of guidance with the courts of several foreign jurisdictions, which are intended to outline how parties might expect the signatory courts to treat each other’s judgments. The first of those was signed by the DIFC Courts with the Commercial Court of England and Wales in 2013. Since then, the DIFC Courts have signed many further other memorandums, including with: the New South Wales Supreme Court; the Federal Court of Australia; the High Court of Kenya; the United States District Court for the Southern District of New York; the Supreme Court of Singapore; the Supreme Court of the Republic of Kazakhstan; the National Court Administration of the Supreme Court of Korea; the Federal Court of Malaysia; the High Court of Zambia; and the High Court of Hong Kong.

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 periods

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?

Article 38 of the DIFC Court Law says that, subject to any other DIFC law, a proceeding must not be commenced more than six years after the date of the events that give rise to the proceedings.

Types of enforceable order

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

The DIFC Court Law mandates at article 24(1)(a) that, pursuant to article 7(4) of the Judicial Authority Law, the court of first instance has jurisdiction to ratify ‘any judgment [or] order’ of any recognised foreign court. In practice, however, this is limited to money judgments (the process for enforcement of which is often set out in memorandums of understanding or guidance with foreign courts). 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 DIFC Courts would treat the foreign court’s order as persuasive, provided jurisdiction can be established on a standalone basis (Akhmedova v Akhmedov [2018] DIFC CA 003).

Unless enforcement is permitted by treaty, the foreign judgment must satisfy the common law tests for enforcement. The foreign judgment must be:

  • from a recognised foreign court (usually meaning it must be rendered by a court of a recognised state);
  • final and conclusive (and will be so even if it is subject to an ongoing appeal);
  • not of a type incapable of enforcement, such as an order to pay taxes, fines or penalties;
  • rendered by a foreign court that had jurisdiction to determine the dispute – in this respect, the DIFC Courts will consider the foreign court to have had the requisite personal jurisdiction only where the person against whom judgment was rendered:
    • was present in the jurisdiction at the time that the proceeding was commenced;
    • was the claimant or counterclaimant in the proceeding;
    • submitted to the jurisdiction of the foreign court; or
    • agreed to submit to the jurisdiction of the foreign court prior to commencement of the proceeding and in respect of its subject matter; and
  • not subject to a ground justifying a challenge to the enforcement, including but not limited to the following:
    • where the judgment was obtained by fraud;
    • where the judgment is contrary to the public policy of the UAE;
    • where the proceedings were conducted in a manner which the DIFC Courts regard as contrary to the principles of natural justice;
    • where the judgment is inconsistent with a prior judgment on the same subject matter and between the same parties; or
    • where the judgment is rendered in a proceeding brought contrary to a jurisdiction or arbitration agreement.

Competent courts

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

Yes. The DIFC Court Law mandates at article 24(1)(a) that, pursuant to article 7(4) of the Judicial Authority Law, the court of first instance has jurisdiction to ratify a (qualifying) judgment, order or award of any recognised foreign court.

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?

Article 24 of the DIFC Courts Law refers to the DIFC Court of First Instance’s jurisdiction to ‘ratify’ a qualifying judgment or order of a recognised foreign court. In the DIFC Courts’ process, a judgment creditor may either bring a claim for both the recognition and enforcement of a foreign judgment in one proceeding under Part 7 of the Rules of the DIFC Courts, or it may undertake those two steps separately. The claim is usually determined summarily, following which (if successful) an order both recognising and enforcing the foreign judgment will be made. Enforcement proceedings against assets within the DIFC may then commence, or alternatively the resulting DIFC Courts order may be taken elsewhere (eg, to the Dubai courts) for execution against assets in that jurisdiction.

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?

Recognition and enforcement of the foreign judgment can only be refused if the DIFC Courts determine that the judgment has been obtained by fraud, the judgment is contrary to UAE public policy or the proceedings were conducted in a manner that the DIFC Courts regard as contrary to the principles of natural justice. These grounds for challenge are therefore narrower than a more general merits-based defence to liability or the scope of the foreign judgment, which the DIFC Courts will not entertain.

Injunctive relief

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

An enforcement proceeding in the DIFC Courts is brought via a Part 7 claim, which must be served on the judgment debtor as the defendant to the proceeding. 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 and can resist it at the immediate judgment application or trial stages. The DIFC Courts may recognise and enforce (or make their own appropriate order in light of) an injunction from another court preventing reliance on or compliance with a foreign judgment. 

Requirements for recognition 

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

Broadly, the mandatory requirements are that the foreign judgment must be:

  • issued by a recognised foreign court (usually meaning it must be rendered by a court of a recognised state);
  • inal and conclusive (and will be so even if it is subject to an ongoing appeal);
  • not of a type incapable of enforcement, such as an order to pay taxes, fines or penalties;
  • rendered by a foreign court that had jurisdiction to determine the dispute – in this regard, the DIFC Courts will consider the foreign court to have had the requisite personal jurisdiction only where the person against whom judgment was rendered:
    • was present in the jurisdiction at the time that the proceeding was commenced;
    • was the claimant or counterclaimant in the proceeding;
    • submitted to the jurisdiction of the foreign court; or
    • agreed to submit to the jurisdiction of the foreign court prior to commencement of the proceeding and in respect of its subject matter; and
  • not subject to a ground justifying a challenge to the enforcement, including but not limited to the following:
    • where the judgment was obtained by fraud;
    • where the judgment is contrary to the public policy of the UAE;
    • where the proceedings were conducted in a manner which the DIFC Courts regard as contrary to the principles of natural justice;
    • where the judgment is inconsistent with a prior judgment on the same subject matter and between the same parties; or
    • where the judgment is rendered in a proceeding brought contrary to a jurisdiction or arbitration agreement.

Other factors

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

The grounds justifying a challenge to the enforcement of a foreign judgment at common law are not exhaustive and other non-mandatory factors may be considered in the defence to an enforcement proceeding. The memorandums of understanding or guidance agreed between the DIFC Courts and the courts of numerous foreign jurisdictions set out a process for the reciprocal enforcement of foreign money judgments that is the same in both the foreign jurisdiction and the DIFC Courts.

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?

Once the territorial or consensual jurisdiction of the foreign court is established, recognition and enforcement of a foreign judgment can be refused by the DIFC Courts if it is determined that the foreign proceedings were conducted in a manner that the DIFC Courts regard as contrary to the principles of natural justice. This may include consideration of whether the judicial proceedings where the judgment was entered corresponded to due process in the DIFC Courts, in a fact-sensitive inquiry.

Jurisdiction of the foreign court

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?

The court will only undertake a thorough examination of the issue of personal jurisdiction if raised by the judgment debtor in defence of the enforcement action; otherwise the court in practice accepts and acts upon the judgment creditor’s representations as to these factors made in their application.

If the judgment debtor raises the defence, the DIFC Courts must consider, as part of the recognition and enforcement process, the foreign court’s jurisdiction over the judgment debtor from the perspective of the DIFC Courts’ own conflict of laws rules, including whether the court where the judgment was entered had personal jurisdiction over the defendant. The DIFC Courts will consider the foreign court to have had the requisite personal jurisdiction only where the person against whom judgment was rendered:

  • was present in the jurisdiction at the time that the proceeding was commenced;
  • was the claimant or counterclaimant in the proceeding; or
  • submitted to the jurisdiction of the foreign court.

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. The DIFC Courts must consider, as part of the recognition and enforcement process, the foreign court’s jurisdiction over the judgment debtor from the perspective of the DIFC Courts’ own conflict of laws rules, including whether the court where the judgment was entered had subject-matter jurisdiction over the controversy. The DIFC Courts will consider the foreign court to have had the requisite subject-matter jurisdiction only where the person against whom the judgment was rendered agreed to submit to the jurisdiction of the foreign court prior to commencement of the proceeding and in respect of its subject matter.

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?

Once the territorial or consensual jurisdiction of the foreign court is established, recognition and enforcement of a foreign judgment can be refused by the DIFC Courts if it is determined that the foreign proceedings were conducted in a manner that the DIFC Courts regard as contrary to the principles of natural justice. This may include consideration of whether due notice was given in the foreign court process, in a fact-sensitive inquiry.

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?

Once the territorial or consensual jurisdiction of the foreign court is established, recognition and enforcement of a foreign judgment can be refused by the DIFC Courts if it is determined that the foreign proceedings were conducted in a manner that the DIFC Courts regard as contrary to the principles of natural justice. This may include consideration of the inconvenience of the foreign jurisdiction to the defendant, in a fact-sensitive inquiry.

Examination of the foreign judgment 

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

Recognition and enforcement of the foreign judgment can be refused if the DIFC Courts determine that the judgment has been obtained by fraud.

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 can be refused if the DIFC Courts determine that the judgment is contrary to UAE public policy.

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?

The DIFC Courts are equipped with a range of powers to deal with conflicting judgments that may be subject to the common law doctrines of issue estoppel or res judicata, confirmed in International Electromechanical Services v Al Fattan [2012] CFI 004 (14 October 2012). Part 12 of the Rules of the DIFC Courts permits a judgment debtor as the defendant in an enforcement claim to apply to the court for an order declaring that it either (1) has no jurisdiction to try the claim or (2) should not exercise any jurisdiction that it may have. An order containing a declaration that the court has no jurisdiction or should not exercise its jurisdiction may also make further provision for:

  • setting aside the claim form;
  • setting aside service of the claim form;
  • discharging any order made before the claim was commenced or before the claim form was served; or
  • staying the proceedings.

As common law courts, the DIFC Courts are likely to apply the doctrines of res judicata or issue estoppel in favour of an earlier decision that conclusively resolves the issues between the parties.

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 common law applicable in the DIFC does not recognise specific ‘agency’ or ‘alter ego’ doctrines for the enforcement of foreign judgments. In Akhmedova v Akhmedov and Straight Establishment [2018] DIFC CA 003, the court adopted an approach of piercing the corporate veil consistent with the principles outlined in Prest v Petrodel Resources Ltd [2013] UKSC 34. Following the common law generally and English precedents in particular (eg, Prest v Petrodel Resources Limited and more recently Hurstwood Properties (A) Ltd & Ors v Rossendale Borough Council [2021] UKSC 16), 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 in relation to existing liabilities through the misuse or abuse of corporate structures.

Rule 45.7 sets out, in respect of enforcement of a judgment or order by or against a non-party, that 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 she were 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 DIFC 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 DIFC 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 not to disturb the reasoning of the foreign court, this does not necessarily vitiate the DIFC 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 DIFC Courts would not regard as contrary to the principles of natural justice. The DIFC 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 from a jurisdiction with whom the DIFC Courts have a memorandum of understanding or guidance or with whom the UAE has a treaty governing enforcement will be simpler and more likely to be enforced. Judgments from the Dubai courts and judgments from the courts of other emirates will also generally be easier to enforce.

Alteration of awards

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

The UK Protection of Trading Interests Act 1980 is not expressly part of DIFC law and it is unclear whether the prohibition on the enforcement of a judgment for multiple damages contained within that Act exists in DIFC law as part of the wider common law. It is likely that it does not form part of DIFC law, given that the DIFC Contract Law (Law No. 7 of 2005) allows the DIFC Courts to triple the actual damages awarded to a party at the court’s discretion on application by a claimant, where warranted in the circumstances and where it appears to the court that the defendant’s conduct producing actual damages was deliberate and particularly egregious or offensive. Although this issue has not, as far as we are aware, come before the DIFC Courts previously, if faced with unenforceable parts of a foreign judgment, the DIFC Courts are 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.

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?

Part 45 of the Rules of the DIFC Courts sets out the rules for enforcing a foreign judgment and DIFC law governs the rate of interest (eg, article 39 of the DIFC Courts Law). Rule 45.26 stipulates that if a judgment creditor is claiming interest on a judgment debt, he or she must include in his or her application or request to issue enforcement proceedings in relation to that judgment details of:

  • the amount of interest claimed and the sum on which it is claimed;
  • the dates from and to which interest has accrued; and
  • the rate of interest that has been applied and, where more than one rate of interest has been applied, the relevant dates and rates. 

Practice Direction No. 4 of 2017 stipulates that any judgment of the DIFC Courts issued after the date of the Practice Direction (being 20 November 2017) shall carry simple interest, from the date the judgment is entered, at the rate of 9 per cent or such other rate as the judge may prescribe.

Part 36 of the Rules of the DIFC Courts sets out general rules on the form and content of DIFC judgments. Rule 36.14 permits the entry of the foreign judgment debt in US dollars or any other currency. Rule 36.14 stipulates that where a judgment is ordered to be entered in a currency other than US dollars, the order should be in the following form: ‘It is ordered that the defendant pay the claimant (state the sum in the currency other than US Dollars) or the US Dollar equivalent at the time of payment.’

Legal costs of enforcement in the DIFC 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 Parts 38 to 40 of the Rules of the DIFC Courts.

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 44 of the Rules of the DIFC Courts against any decision of the Court of First Instance that was wrong or unjust because of a serious procedural or other irregularity in the proceedings in the Court of First Instance (Rule 44.31). 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 44.4). If the judgment recognising or enforcing a foreign judgment is stayed pending the disposal of an appeal, the judgment creditor may apply under Part 25 of the Rules of the DIFC Courts for an interim injunction to protect the assets against which he or she anticipates being able to enforce, such as a freezing order, search order or an order for interim payment, or for security for his or her costs of responding to the appeal.

Enforcement and pitfalls

Enforcement process

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

It is common to apply for an order both recognising and enforcing the foreign judgment when making the enforcement claim in the DIFC Courts. Once a judgment on the enforcement claim is rendered, either by an immediate (summary) judgment or after trial, then Part 45 of the Rules of the DIFC Courts sets out the processes by which the resulting judgment can be enforced in the DIFC (see also the DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005), particularly Part 4). Rule 45.3 establishes that a judgment creditor may enforce a judgment or order for the payment of money by any of the following methods: a charge over property (a charging order); attachment of assets (whether present or future); execution against assets; or the appointment of a receiver. In addition, the court may make an order of committal for contempt of court against a judgment debtor but only if permitted by a rule (Rule 45.4). A judgment creditor may, except where an enactment, rule or practice direction provides otherwise, use any method of enforcement that is available, and use more than one method of enforcement, either at the same time or one after another (Rule 45.6). Parts 46 to 49 of the Rules of the DIFC Courts set out respectively the rules for: charging orders; stop orders and stop notices; attachment of future assets and earnings; execution against assets; and the court’s power to appoint a receiver. Part 50 sets out process to obtain information from judgment debtors to aid enforcement.

Alternatively, the judgment rendered by the DIFC Courts recognising and enforcing the foreign judgment may be enforced outside the DIFC. The DIFC part of the process is set out at Rules 45.18 to 45.24 of the Rules of the DIFC Courts.

Pitfalls

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

The most common pitfall in the DIFC Courts is the effect of parallel proceedings in the Dubai courts seeking a negative declaration against the enforcement claim in the DIFC Courts. The Ruler of Dubai established a Joint Judicial Committee (JJC) between the Dubai courts and DIFC Courts under Decree 19 of 2016. Since then, a common tactic of judgment debtors in Dubai has been to bring a claim seeking a negative declaration contrary to the judgment creditor’s action in the DIFC Courts in a bid to stop enforcement. Parallel proceedings that may lead to contradictory judgments being issued can be referred by one or both of the parties to the JJC for a decision on which proceeding has jurisdiction; the JJC has the power to then order the stay of the other proceeding.

Update and trends

Hot topics

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

The issue of the ‘conduit jurisdiction’ of the DIFC Courts to enforce foreign judgments has been present since DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf Navigation Holding Pjsc [2014] DIFC CFI 043. Since 2012, parties had sought to enforce arbitration awards in the DIFC even though there were no assets to enforce against within the DIFC, with the intention of taking the resulting DIFC Courts’ enforcement order to the Dubai courts for enforcement, thus using the DIFC as a channel or conduit for enforcement in the wider UAE. In DNB Bank, the DIFC Courts confirmed for the first time that enforcement of foreign judgments was also possible under the ‘conduit’ route, pursuant to article 24 of the DIFC Court Law and article 7(6) of the Judicial Authority Law. Using the DIFC as a conduit allowed enforcing parties to sidestep the requirements of the Dubai courts, where a higher level of proof was required to demonstrate reciprocity of enforcement with foreign courts, usually in the form of an international treaty (the Dubai courts’ attitude to proving reciprocity has softened in recent years, notably since article 85 of Cabinet Resolution No. 57 of 2018 concerning the Executive Regulations of Federal Law No. 11 of 1992 (as amended) and, in respect to English judgments, since the enforcement of a Dubai Courts ‘bounced cheque’ judgment in England: Lenkor Energy Trading DMCC v Puri [2020] EWHC 75).

In a bid to stop the alleged abuse of the DIFC Courts’ conduit jurisdiction, the Ruler of Dubai established a Joint Judicial Committee (JJC) between the Dubai and DIFC Courts under Decree 19 of 2016. The JJC comprises four judges of the Dubai courts and three judges of the DIFC Courts. Since the JJC’s establishment, a common tactic of judgment debtors in Dubai has been to bring a claim seeking a negative declaration contrary to the judgment creditor’s action in the DIFC Courts in a bid to stop enforcement. Parallel proceedings that may lead to contradictory judgments being issued can be referred by one or both of the parties to the JJC for a decision on which proceeding has jurisdiction; the JJC has the power to then order the stay of the other proceeding. Initially, the JJC was opposed to allowing the conduit enforcement of foreign judgments with the committee splitting 4–3 in a number of cases, finding in favour of the ‘general jurisdiction’ of the Dubai courts. However, there appears to have been a swing back to permitting conduit enforcement since Essar Projects Ltd v McConnell Dowell South East Asia Pte Ltd (JJC Cassation No. 5 of 2019), which permitted the enforcement of a Singaporean High Court judgment to continue notwithstanding the intention to seek onward enforcement in Dubai. Previously, where a judgment debtor referred a matter to the JJC, that would cause an automatic temporary stay to the enforcement claim before the DIFC Courts, pending resolution of the JJC referral. However, there is no longer a right to an automatic stay following the decision in Lakhan v Lamia [2021] DIFC CA 001.

The DIFC Courts have also considered their jurisdiction to recognise and enforce non-DIFC proceedings, including proceedings before other UAE Courts, in the context of insolvency proceedings. In In the matter of an application by Salem Mohamed Ballama Altamimi and others [2021] DIFC CFI 085, 4 March 2022, Justice Sir Jeremy Cooke refused to recognise personal bankruptcy proceedings against the First Claimant in the Abu Dhabi Court as "foreign main" or "foreign non-main" proceedings under Article 15, Schedule 4 of the DIFC Insolvency Law No. 1 of 2019 (based on the UNCITRAL Model law on Cross-Border Insolvency) when the purpose of that application was to cause a stay of all claims in the DIFC Courts involving the parties to the Abu Dhabi bankruptcy proceedings. 

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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