The UAE has established itself as a significant base for cross-border business and international investment, a role which has expanded dramatically since Burford carried out its first judgment enforcement action in the region in 2018.

In particular, Dubai is continuing to attract global commercial and financial activity. In addition, the influx of ultra-high-net-worth individuals, capital, and assets into the UAE in recent years is attributable to a unique blend of international disputes, easing UAE visa requirements, and strategic reforms.

As a result, judgment creditors are increasingly attempting to enforce foreign judgment UAE to pursue recovery against assets held within the jurisdiction. However, the onshore Dubai courts have had a historic reputation for being erratic and opaque from the international enforcement perspective.

Our own experiences funding enforcement actions, combined with our ongoing conversations with local law firms, and analysis of judicial data, show that such views amount to either misunderstandings or straying so far from presenting an accurate picture of the current state of the system.

Key Considerations for Recognizing Foreign Judgments in Dubai

From the cases discussed above and our experience in funding litigation in Dubai, several observations are relevant to cross-border debt UAE matters.

First, Dubai courts always insisted on full and explicit compliance with the five criteria for recognition above. They will enforce these stringent standards strictly.

Further, parties must ensure that the foreign-language judgment and all accompanying documents have been attested to, certified translated to Arabic, and legalized through official government channels. These procedural requirements always extend the time and costs of the recognition process.

In addition to the procedural issues to be resolved, appeals in Dubai are a matter of right. Practically all defendants appeal, in many cases on tenuous grounds, to the Court of Appeal and the Court of Cassation without needing to first receive permission.

This dynamic usually means additional delays with increasing legal costs, especially in complex cross-border debt UAE proceedings.

Court of Appeal Judgments, Interim Relief, and Asset Attachments in Dubai

Notwithstanding, and subject to the court ordering a stay of execution, the judgment by the Court of Appeal will be enforced as long as it is confirmed by the Court of Appeal, regardless of whether a further appeal to the Court of Cassation is pending.

This will be important for parties seeking to execute a foreign judgment UAE in a time-sensitive way.

Notably, the onshore Dubai courts have the power to grant interim relief before a judgment is enforceable. That is, precautionary attachment orders (which are similar to freezing orders but are in rem rather than in personam).

These attachments can attach to some of the judgment debtor’s assets in the UAE, which can include real estate, shares, bank accounts, and movables. The court can grant such orders on an ex parte basis, and they are enforceable and binding on third parties.

How to Enforce Foreign Judgment UAE: Recognition Criteria and the Role of Reciprocity

To enforce foreign judgment UAE based on the reciprocity requirement, the foreign judgment must meet certain conditions established in the UAE Civil Procedure Law and which have been consistently applied in the local case law. These conditions, which are similar to international norms, are as follows:

• Jurisdiction of UAE Courts: The UAE courts must not have exclusive jurisdiction over the original dispute. 
• Jurisdiction of the Foreign Court: The foreign court must have exercised non-exclusive jurisdiction and/or must have issued the judgment in accordance with the foreign court’s laws and procedures.
  
• Final and Enforcement: The foreign judgment must be considered as res judicata in the issuing jurisdiction, and the applicant will usually be required to file a certificate confirming the same.
• Due process: The defendant must have received proper service and a fair opportunity to appear and be represented.
• No Conflict with UAE Law: The judgment must not conflict with any prior UAE judgment or order, and must not infringe upon public policy of the UAE or the principles of Shari’a.

Establishing Reciprocity: A Key Step in Enforcing Foreign Judgments UAE

In addition to the above core requirements, the applicant must also prove the existence of reciprocity, but specifically, in situations not governed by a bilateral or multilateral treaty.

Reciprocity is particularly important in the context of debt collection Dubai enforcement, as they may be required to enforce it in a cross-border situation.

In a perfect world, the judgment creditor would cite previous instances where the foreign jurisdiction recognized judgments granted by the Dubai Courts.

While that is not strictly necessary, generally it is sufficient to establish that the foreign court would, under the same circumstances, recognize a Dubai judgment following the principle of reciprocity that allows them to enforce a foreign judgment UAE.

Conclusion

Dubai and the UAE are developing into credible hubs of international business. Hence, many people are looking to enforce foreign judgments UAE to recover their money from the other side of the globe, often in cross-border debt matters. 

The Dubai courts have created a defined process, which is more certain today than ever before, prior to consideration for the enforcement of a judgment obtained in another jurisdiction.

These courts will examine whether the case was dealt with in compliance with the required process, whether the decision is final, and whether the decision adheres to local laws and Shari’a law.

There are strict requirements as to how the documents have been certified and translated, which can often take time and money, and at the consequent stage, one has the right to appeal the decisions with the Court of Appeal, which can also be a lengthy and expensive procedure. 

However, once the issue has been considered by the Court of Appeal, the judgment can typically be enforced, even if there are additional appeals ongoing. 

The court can also take urgent steps to protect the debtor’s assets, eg, real property, bank accounts, and so on, pending completion of the proceedings in full, to avoid a situation where they are taken away, sanitized, or otherwise put beyond the reach of the creditor. 

Finally, and perhaps most importantly, if you can demonstrate that the other country that was the jurisdiction for the judgment would enforce an award made in Dubai, the issue of reciprocity becomes powerful, especially important in debt collection Dubai and cross-border matters. 

For sophisticated enforcement advice and assistance, clients frequently engage Khairallah Law Firm as their experts. They are popular among the Best Lawyers in Dubai as they have a good depth of experience in cross-border enforcement and debt issues.

Having said that, contact Khairallah Advocates & Legal Consultants and benefit from our free 30-min legal consultation.

*Disclaimer: our blogs, law updates, and FAQ’s are freely distributed for educational purposes and to showcase recent updates and regulations in the UAE’s framework.

If you have any questions and need assistance, contact us at our number or book an appointment online