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Can UK courts enforce Dubai court judgments?

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Can UK courts enforce Dubai court judgments
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Examining the reciprocity of enforcement between the two jurisdictions.

This legal article discusses the guidance letter issued by the International Co-operation Department of the Ministry of Justice of the United Arab Emirates (“UAE Ministry of Justice”) on 13 September 2022, to the Director General of the Dubai Courts, promoting the principle of reciprocity of recognition and enforcement of court judgments between the Dubai Courts and English Courts. This request follows the decision made by the English High Court in the Lenkor Energy Trading DMCC v Puri (2020) case, in which the Dubai Court of Cassation judgment was enforced.

THE MOJ GUIDANCE LETTER

On 13 September 2022, the International Co-operation Department of the UAE Ministry of Justice issued a guidance letter to the Director General of the Dubai Courts (“MOJ Guidance letter”), requesting the promotion of the principle of reciprocity of recognition and enforcement of court judgments between the Dubai Courts and English Courts. The MOJ Guidance letter was issued as a result of the Lenkor case, in which the English High Court enforced a Dubai Court of Cassation judgment.

THE LENKOR CASE

The Lenkor case refers to the decision made by the English High Court in 2020, in which the court enforced a judgment made by the Dubai Court of Cassation. The case involved Lenkor Energy Trading DMCC, a Dubai-based company, and Mr. Puri, an individual residing in the United Kingdom. Lenkor Energy Trading DMCC had obtained a judgment from the Dubai Court of Cassation against Mr. Puri, who had failed to pay an outstanding debt. In response, Lenkor Energy Trading DMCC sought to enforce the judgment in England.

The English High Court, in its decision, recognized and enforced the Dubai Court of Cassation judgment on the basis of the principle of reciprocity, as the UAE and England had entered into an agreement for the mutual recognition and enforcement of court judgments.

THE PRINCIPLE OF RECIPROCITY

The principle of reciprocity refers to the mutual recognition and enforcement of court judgments between two countries, based on an agreement or treaty. The principle ensures that judgments made in one country can be recognized and enforced in another, as long as the countries involved have agreed to the same.

The MOJ Guidance letter issued by the International Co-operation Department of the UAE Ministry of Justice on 13 September 2022, requesting the promotion of the principle of reciprocity of recognition and enforcement of court judgments between the Dubai Courts and English Courts, is a significant development in the area of international law. This request follows the Lenkor case, in which the English High Court enforced a judgment made by the Dubai Court of Cassation on the basis of the principle of reciprocity. The promotion of this principle ensures that parties can have greater confidence in the recognition and enforcement of court judgments across different jurisdictions, promoting international trade and cooperation.

CONDITIONS FOR ENFORCEMENT OF FOREIGN JUDGMENTS

The conditions for the enforcement of foreign judgments by the UAE courts are set out in Article 85 of Cabinet Resolution No. 57 of 2018 concerning the Executive Regulation of the UAE Civil Procedures Law (Federal Law No.11 of 1992, as amended) (the “Executive Regulations”). Article 85 of the Executive Regulations provides that foreign judgments and orders may be enforced in the UAE if certain conditions are met.

In summary, Article 85 stipulates that:

  • The judgment or order must have been issued in a foreign country under conditions that are equivalent to those required for the enforcement of judgments and orders issued in the UAE;
  • The enforcement judge must verify that the conditions for enforcement have been met;
  • The judgment creditor must provide the documents that support the application for enforcement.

HISTORICAL APPROACH OF THE DUBAI COURTS

Although Article 85 of the Executive Regulations provides a framework for the enforcement of foreign judgments in the UAE, historically, the Dubai Courts have been reluctant to enforce English court judgments. This reluctance was primarily due to the Dubai Courts’ requirement for reciprocity.

Under the old provisions of the UAE Civil Procedures Law, which were amended by the Executive Regulations in 2019, the Dubai Courts required a judgment creditor to prove that the English Courts would enforce judgments issued by the UAE courts. In other words, there had to be reciprocal enforcement or reciprocity between the two countries.

As a result, even if the conditions in Article 85 of the Executive Regulations were satisfied, there was no guarantee that the Dubai Courts would enforce an English court judgment. In practice, the Dubai Courts rarely enforced English court judgments.

ABSENCE OF A TREATY FOR MUTUAL RECOGNITION AND ENFORCEMENT OF COURT JUDGMENTS

One of the factors that contributed to the Dubai Courts’ historical approach towards enforcing English court judgments was the absence of a treaty for the mutual recognition and enforcement of court judgments between the UAE and the United Kingdom.

While there is a Treaty between the two countries on Judicial Assistance in Civil and Commercial Matters dated 7 December 2006 (the “Judicial Assistance Treaty”), it does not include provisions relating to reciprocal enforcement. Rather, it deals with the reciprocated judicial assistance in respect of the service of judicial documents and the taking of evidence.

Therefore, the Judicial Assistance Treaty does not provide a mechanism for the mutual recognition and enforcement of court judgments between the UAE and the United Kingdom.

The history of the enforcement of English court judgments in Dubai highlights the importance of reciprocity in the UAE courts’ approach towards enforcing foreign judgments. Although the Executive Regulations provide a framework for the enforcement of foreign judgments, the historical reluctance of the Dubai Courts to enforce English court judgments underscores the need for judgment creditors to carefully consider their options before seeking enforcement in the UAE. Furthermore, the absence of a treaty for the mutual recognition and enforcement of court judgments between the UAE and the United Kingdom limits the options available to judgment creditors seeking to enforce English court judgments in Dubai.

MOJ Guidance Letter on Reciprocity between English and Dubai Courts

The Ministry of Justice (MOJ) of the United Kingdom issued a guidance letter addressing the Director General of the Dubai Courts regarding the principle of reciprocity between the English and Dubai courts. This letter was prompted by the English High Court’s decision in the Lenkor Case, in which it recognized and enforced a judgment of the Dubai Court of Cassation relating to a bounced cheque.

In the Lenkor Case, the English Court of Appeal considered that the Dubai Court of Cassation judgment was final and conclusive, and did not find any offense to public policy. As a result, the MOJ Guidance letter states that the reciprocity principle “has been achieved through the English courts previously implementing a judgment delivered by Dubai Courts…” and requests that the Dubai Courts implement legal requirements in accordance with the laws in force in both countries to promote the principle of reciprocity.

It should be noted that the MOJ Guidance letter is addressed solely to the Director General of the Dubai Courts, and not to the courts of the other six Emirates. This is presumably because the Lenkor Case related to the enforcement of a Dubai Court of Cassation judgment, and thus it is arguable that the principle of reciprocity has not been established between the English Courts and the courts of the other UAE Emirates.

Furthermore, the MOJ Guidance letter does not make any reference to whether reciprocity has been established between the Dubai Courts and other courts within the United Kingdom, such as the Scottish Courts, since the Lenkor case was a decision of the English Courts.

It is imperative that the courts of both countries continue to promote the principle of reciprocity by implementing legal requirements in accordance with the laws in force in both countries. This will ensure the continuity of the principle of reciprocity between the English and Dubai courts and strengthen the international legal cooperation between the two countries.

It is important to note that the MOJ Guidance letter, while encouraging the Dubai Courts to promote the principle of reciprocity, does not alter the conditions set out in Article 85 of the Executive Regulations. Accordingly, the Dubai Courts are not obligated to enforce English Court judgments unless these conditions are met. The MOJ Guidance letter does not direct the Dubai Courts to automatically enforce English Court judgments, and the Dubai Courts will continue to enforce such judgments only in accordance with the procedure prescribed in the Executive Regulations.

In certain cases, the Dubai Courts may properly refuse to enforce English Court judgments if the conditions specified in Article 85 of the Executive Regulations are not met. For instance, the Dubai Courts may be unwilling to enforce English Court judgments relating to the production of documents and evidence in certain situations, or judgments relating to interim or injunctive relief, as the Dubai Courts do not generally issue such orders. However, there may be circumstances, such as orders for the precautionary attachment of property and assets, where the Dubai Courts will enforce such judgments.

Furthermore, certain disputes, including those concerning the ownership of real estate in Dubai, commercial agency contracts and arrangements, onshore employment contracts, and other events and transactions taking place in the UAE, may remain within the jurisdiction of the Dubai Courts as a matter of UAE law, notwithstanding any agreement to the contrary in the contract.

Under Article 85 of the Executive Regulations, the Dubai Courts may refuse to enforce English Court judgments if it determines that the UAE has exclusive jurisdiction over the dispute on which the judgment or order was issued.

The enforceability of English Court judgments in the Dubai Courts is subject to the conditions set out in Article 85 of the Executive Regulations. While the MOJ Guidance letter encourages the Dubai Courts to promote the principle of reciprocity, it does not impose an obligation to automatically enforce such judgments. The Dubai Courts may also retain jurisdiction over certain disputes under UAE law, even if agreed otherwise in a contract.

The Principle of Reciprocity

The MOJ Guidance letter and the principle of reciprocity established in the Lenkor Case have had a positive impact on the enforcement of English Court judgments in the Dubai Courts. The judgment creditors can now prove reciprocity, which was previously a barrier to enforcement. The establishment of reciprocity provides a mechanism for the Dubai Courts to enforce English Court judgments in the UAE.

Applicability of Article 85 Despite the positive development of reciprocity, the conditions in Article 85 of the Executive Regulations remain in full force and effect. These conditions must be verified before the Dubai Courts will enforce an English Court judgment. Article 85 sets out the requirements for the enforcement of foreign judgments in the UAE, including the need for the foreign judgment to be final and binding, the jurisdiction of the foreign court, and the compliance of the foreign judgment with the UAE laws and public order.

Uncertainties Regarding Reciprocity

While the establishment of reciprocity between the English Courts and the Dubai Courts is a positive development, uncertainties remain regarding reciprocity with the Courts of other UAE emirates and the Courts of other jurisdictions within the United Kingdom. The position as between the English Courts and the Courts of other UAE emirates is uncertain, as the MOJ Guidance letter and the principle of reciprocity have only been applied in the Dubai Courts. Similarly, the position as between the Dubai Courts and the Courts of other jurisdictions within the United Kingdom is also uncertain, as the MOJ Guidance letter and the principle of reciprocity have only been applied in the context of English Court judgments.

In conclusion, the MOJ Guidance letter and the principle of reciprocity have had a positive impact on the enforcement of English Court judgments in the Dubai Courts. However, the conditions in Article 85 of the Executive Regulations remain in full force and effect, and uncertainties remain regarding reciprocity with the Courts of other UAE emirates and the Courts of other jurisdictions within the United Kingdom. The continued development and clarification of reciprocity will be essential in facilitating the enforcement of foreign judgments in the UAE.

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