The enforcement of foreign court judgements between different State Courts remains an area of challenge and uncertainty worldwide. The absence of bilateral treaties between States has often been cited as a common barrier to successful enforcements. Recognition and enforcement of UK court judgments in the UAE also suffered from this issue since there is no bilateral treaty between the UAE and the UK for the enforcement of court judgments and therefore when seeking to enforce UK judgments in the UAE, parties have had to rely on relevant provisions of the Federal Law No. 11 of 1992 (the “UAE Civil Code”).

Legislative Developments

In order to ease the process of enforcement, the UAE issued Cabinet Resolution No. 57 of 2018 (“Execution Regulations”) to modernise the rules for the recognition of judgments and service proceedings. This has since been amended by Cabinet Resolution Nos. 33 of 2020 (the “Cabinet Resolution”) and 75 of 2021.

Amongst other things, under Article 85(1) of the Execution Regulations, the UAE courts will execute foreign judgments on a principle of reciprocity, i.e., as long as the foreign court enforces UAE court judgments, the UAE courts will reciprocate.

As such, the Court will consider the extent to which reciprocity exists as a matter of practice, notwithstanding the absence of a treaty directing the same.

Recent Case Law

The UAE operates two court systems:

A civil law court system in “onshore” UAE for all matters and issues dealing with disputes arising between parties on the mainland.

A common law court system in the financial free zones, such as the Dubai International Financial Centre (“DIFC”) and the Abu Dhabi General Markets (“ADGM”), or “offshore” UAE.

The English Courts have demonstrated their willingness to recognise and enforce judgements from both UAE Court systems as demonstrated below.

Recognition of “Offshore” judgments

The UK and offshore UAE courts have a demonstrable history of reciprocity. As recently as 2022, the English High Court recognised and enforced a judgment of the DIFC court in Barclays Bank PLC v Bavaguthu Raghuram Shetty [2022] EWHC 19 (Comm).

In this case, Dr. Shetty sought an adjournment of the hearing of the summary judgment application put forward by Barclays Bank in the English High Court for a multitude of reasons, including but not limited to:

• the DIFC judgment was not final and conclusive;
• the DIFC court was not of competent jurisdiction; and
• the DIFC judgment was impeachable on the basis of fraud, was contrary to English public policy or principles of natural justice.

The High Court dismissed all of the above arguments and fully recognised the DIFC judgment.

Recognition of “Onshore” judgments

Notably, there is also an important recent example of a judgment from the onshore courts of Dubai being recognised and enforced in the English High Court.

In the case of Lenkor Energy Trading DMCC v Puri [2020] EWHC 75 (QB), the Defendant had signed cheques in the names of a Dubai company to guarantee payment for cargo, pursuant to a tripartite agreement between three entities, including a related company of the Claimant.

When the Claimant presented the cheques, they were dishonoured. Thus, the Claimant sought and obtained a judgment against the Defendant from the onshore Dubai courts and then sought enforcement of this judgment in the UK.

The Defendant resisted enforcement on various grounds, including that the Dubai court judgment was contrary to public policy because the transaction for which the cheques had been given itself was illegal.

The English High Court dismissed the arguments and confirmed that even if an English court would have approached or analysed the facts differently, this was irrelevant. Ultimately, the facts pertained to a dispute arising under Dubai law and which the Dubai courts had appropriately adjudicated.

Thus, the Dubai court judgment was recognised and enforced by the English High Court.

The Defendant appealed this decision. The English Court of Appeal has since rejected the appeal and affirmed the decision of the lower court (Lenkor Energy Trading DMCC v Puri [2021] EWCA Civ 770).

UAE Ministry of Justice Announcement

On 13 September 2022, the UAE Ministry of Justice issued a letter to the Director General of the Dubai Courts directing the courts to enforce English court judgments and orders (the “Directive”).

The Directive solidifies not only the principle of reciprocity, but has been issued on the back of the successful enforcement of the UAE judgment in the Puri case in English courts. Any such enforcement in the UAE courts of English judgments will of course be subject to additional requirements (beyond reciprocity) of UAE law in that the foreign judgment should not contain anything contrary to UAE public order or morals.

Comment

The onshore UAE courts have frequently used reciprocity as a bar to enforcement of foreign judgments. Given this, these developments are especially noteworthy and also demonstrate the UAE’s recognition of the true purpose and intent behind the principle of reciprocity between individual States.

While there remain other grounds under UAE law to contest enforcement of foreign judgments, we anticipate that the enforcement of English court judgments will increase in frequency and become more and more common in the years to come.

This post was written by Michelle Nelson and Soham Panchamiya.