Unprecedentedly, Dubai Court of Appeal (DCA)Orders the Enforcement of a Judgment Issued by Business and Property Courts of England and Wales (BPCEW ) to Be Enforced in Dubai.

Unprecedentedly, Dubai Court of Appeal (DCA¹) Orders the Enforcement of a Judgment Issued by Business and Property Courts of England and Wales (BPCEW²) to Be Enforced in Dubai.

Background:

First: The Claimant is a UK-registered private limited company and had concluded a loan agreement with the Defendants residing in the UAE, whereas the Defendants failed to repay the loan, the Claimant instituted, versus the Defendants, Case No. 000213/2019LM at LCC³ to oblige the Defendants to make the amount payable thereby.

Second: On 22 February 2021, LCC issued a judgment in presence, obliging both Defendants to jointly pay an amount of USD 2,209,673.16 plus an amount of USD 110,000 and an interest at the rate of 20% from the date in which the judgment was issued until full payment.

Third: Then High Court of Justice(4) issued a certificate for enforcement in an offshore jurisdiction under Article 10 of Foreign Judgments (Reciprocal Enforcement) Act 1933, then the judgment was ratified by official authorities.

Fourth: The Claimant filed an Order on Writ-of-Enforcement Petition with Dubai Court of First Instance (DCFI(5)) in pursuit of Article (85) of the Regulations on the Amended CPC(6) of 2020, which states:

1.  Judgments and orders issued in a foreign state may only be enforced in the jurisdiction under the same conditions as those prescribed in the law of the foreign state for the enforcement of judgments and orders issued in the jurisdiction.
2.  The application for enforcement, including the particulars specified in Article (16) of this Regulation shall be made on a petition and submitted by the persons concerned to the enforcement judge. The judge shall issue his order within three days at most from the date whereon such petition be submitted, after verifying the following:

• The UAE courts are not exclusively competent in the dispute wherein the judgment or order was issued, and the foreign courts that issued it are competent by virtue of the rules of international jurisdiction prescribed in their law.
• The judgment or order is delivered by a court by virtue of the law of the jurisdiction wherein it was issued and duly ratified.
• The litigants in the case wherein the foreign judgment was delivered were summoned and duly represented.
• The judgment or order has the force of res judicata by virtue of the law of the court which issued it.
• The judgment does not contravene a judgment or order issued by a UAE court and does not contain anything in prejudice to public order or morals.

3. The enforcement judge may complete the documents supporting the petition before issuing his decision.

Fifth: On 30/03/2022, the DCFI issued a decision stating, “having taken cognizance of the papers and documents, comprising the judgment, it was decided to decline to issue the order.” So, our Law Firm, “Bin Nakhira & Partners,” submitted on behalf of the Claimant an appeal against the decision to DCA under No. 14/2022 Order on Commercial Petition Appeal.

Grounds of our Appeal:

1.  Article (85) of the regulation of the amended CPC of 2020 allows the judgments and orders issued in a foreign state, in the jurisdiction be enforced only with the same conditions set out in the law of such state for the enforcement of judgments and orders issued in the jurisdiction, meaning that the legislator did not require a judicial cooperation treaty to exist between the jurisdiction issuing the foreign judgment and the UAE – as was the case in the previous law – but reciprocity principle was permitted. In fact, the new amendment permitted the enforcement of foreign judgments in the jurisdiction by virtue of reciprocity principle, and set a single restriction for non-enforcement: “The UAE courts are not competent exclusively in the dispute wherein the judgment was issued,” which is verified in the present procedures, as the Appellant is a company registered in London, UK, and the contract concluded between it and the Appellees stipulated that English law shall apply.
2.  A recent judgment in the English courts, in case of Lenkor Energy Trading DMCC v Puri [2020] EWHC 75 (QB) (Lenkor) wherein English high courts enforced a Dubai Court judgment, notwithstanding the public policy arguments raised by the Defendant that such arguments were denied by the English court, and the court decided that “It was a Dubai court applying the law of Dubai and that enforcement of the foreign judgment would not offend English public policy.” It is a final and conclusive judgment. It is known that the English courts take up the case law, the law that is based on the judicial decisions from previous cases, which is binding on the lower degree courts and EWHC.
3.  The enforcement judge’s decision to decline to issue the order was groundless, even though the law permitted in Article (59/2) of CPC Regulations, to issue the order on petition without stating the grounds, but there are two matters that must be differentiated as follows:

•  The legislator distinguished between the Order on Petition, and the Order on Writ-of-Enforcement Petition, as he permitted to contest against the latter by way of appeal only without grievance, and the appeal requires that the appealed decision be reasoned so that the Court of Appeal can impose its oversight on the ruling.
• The import of Article (59/2) of CPC Regulations states that the legislator permitted the judge not to state the grounds in the event he decided to issue the order, and as for the decline of the order, justice requires that it be justified so that the petitioner of the order finds the grounds for the decline.

1.  It is established from the papers that the petition, subject of appealed judgment, came in compliance by virtue of what was stipulated in Article (85) of the Regulations, as:
   • The UAE courts are not exclusively competent to deal with the immunity wherein the judgment or order was issued, and foreign courts are competent by virtue of the rules of international jurisdiction established in their law.
   • The judgment or order is issued by a court and duly ratified.
   • The litigants in the case wherein the foreign judgment was delivered were summoned and duly represented.
   • The judgment or order has the force of res judicata by virtue of the law of the court which issued it.
   • The judgment does not contravene a judgment or order issued by a UAE court and does not contain anything in prejudice to public order or morals.

Which entails rescinding the decision of the enforcement judge as the Appellant satisfied all the requirements stipulated by the law.

Court of Appeal Ruling:

On 21/09/2022, DCA decided to render the appeal admissible in form, and on the merits, to rescind the appealed decision and to again apply the writ of enforcement to the judgment issued by BPCEW (Case No. 2019/000213LM) and to oblige the Appellees to pay the charges and attorneys’ fees.

Conclusion:

It is known that there is no bilateral treaty between the UAE and the UK for the enforcement of foreign judgments, although there was a treaty on judicial assistance in civil and commercial matters in 2006, but such treaty referred regarding the enforcement of judgments to what is in force in the national laws of both jurisdictions.

Whereas the English courts took the initiative to enforce the judgments issued by the Dubai Courts, as per what is mentioned in the aforementioned Lenkor case, but rather responded to the public policy arguments raised by the Defendant by rejecting, and decided: “It was a Dubai court applying the law of Dubai and that enforcement of the foreign judgment would not offend English public policy.” Similarly, the enforcement of English courts judgments in the UAE would not offend the public order in the jurisdiction, as long as the court verifies that the conditions stipulated by the UAE legislator in Article (85) of CPC regulation are satisfied, whereas the legislator did not require a judicial cooperation treaty to exist between the jurisdiction issuing the foreign judgment and the UAE – as was the case in the previous law – and he permitted the enforcement of foreign judgments in the jurisdiction by virtue of reciprocity principle, the honorable DCA’s ruling to enforce the judgment issued by LCC and invoked by EWHC consolidates reciprocity principle the enforcement of which was initiated by the English Court, and opens the door to broader horizons of cooperation between the UK and the UAE in the area of judgment enforcement and judicial cooperation.