Enforcement of English Judgments in the UAE
Transport & Insurance Focus
Law Update: Issue 360 - Africa and Transport & Insurance
Adam GraySenior Counsel,Transport & Insurance
On 13 September 2022, the UAE Ministry of Justice sent a letter to the Dubai Courts in which it raised a request upon the latter to “take the relevant legal actions regarding any requests for enforcement of judgments and orders issued by the English Courts, in accordance with the laws in force in both countries, as a confirmation of the principle of reciprocity initiated by the English Courts”.
This request was made further to the enforcement by the Supreme Court of England & Wales of the Dubai Court judgment in Lenkor Energy Trading DMCC v Puri (2020) EWHC 75 (QB) (Lenkor). The UAE Ministry of Justice informed the Dubai Courts in its letter that it considered that the principle of reciprocity had been “achieved” by the UK Supreme Court and it consequently recommenced that the Dubai Courts reciprocate and at the next opportunity to recognise and enforce a judgment of the English Courts before the Dubai Courts. The Ministry of Justice made specific reference to the UAE Civil Procedure Code, in which the doctrine of reciprocity is set out as a ground for recognition and enforcement of foreign judgments.
At this point, however, it would be premature to say that it is now possible for English court judgments or orders to be recognised and enforced in Dubai, or in the other Emirates of the UAE. The Ministry of Justice’s letter was a mere request or recommendation, and it has no binding effect on the courts. However, it is likely to be persuasive and carry some weight. The legal community are now eagerly awaiting news of the first recognition and enforcement attempt by the holder of a final and unappealable English court judgment. It still needs to be tested and the letter does not constitute a change in UAE law and practice in and of itself. It merely represents a significant step in a new direction.
The current interpretation and application of the UAE Civil Procedure Law by the UAE courts is that it endows the UAE courts with jurisdiction despite the presence of a foreign law and jurisdiction clause.
There is particular interest in how the UAE courts will treat an English court judgment which could have ordinarily had its merits decided by a UAE court. The current interpretation and application of the UAE Civil Procedure Law by the UAE courts is that it endows the UAE courts with jurisdiction despite the presence of a foreign law and jurisdiction clause, where the subject of the dispute would have otherwise fallen within the jurisdiction of the UAE courts according to its laws. The UAE courts routinely seize jurisdiction of the substantive claim regardless of an extant English law and jurisdiction clause in the subject contract.
Additionally, it is unclear how foreign court orders granting interim or declaratory relief will be enforced in the UAE where no direct equivalent order exists under the civil law system. For example, a ‘World-Wide Freezing Order’ is typically wider in scope than its closest equivalent, a precautionary attachment. Will the UAE courts apply the closest available remedy, or seek to apply the full terms of the English court order? Equally, it remains to be seen whether the UAE courts make any distinction between ‘orders’ and ‘judgments. The Ministry of Justice’s letter references English “judgments and orders” but it does not elaborate on whether, for example, “interim final orders” is intended to be included within that meaning.
It is also quite possible that the UAE courts would require evidence of reciprocity, regardless of the Ministry of Justice’s letter confirming, in its opinion, that the principle of reciprocity has been achieved by the UK Supreme Court. Furthermore, it was a Dubai Court judgment that the English Courts enforced. The UAE comprises seven Emirates, some of which have independent judiciaries whilst others form part of a federal judicial system. Domestically, for example, Ras Al Khaimah, Abu Dhabi, and Dubai Courts will not be bound by each other’s judgments. It is not inconceivable then, that one Emirate may recognise and enforce an English judgment and another not. It remains to be seen whether the principle of reciprocity will be deemed applicable to Dubai Court judgments only, some or all judgments of the UAE courts.
From an international maritime law perspective, this is nothing short of a major development. As our readers will be aware, the UK is arguably the leading forum in which maritime disputes are heard, regardless of the origin of the parties to the maritime dispute. Such is the reach of English law within the sphere of maritime disputes, and it is unlikely to change any time soon. Equally true is that the UAE is an ever-growing maritime hub, with substantial cargo traffic running through its ports, a healthy community of shipping companies registered onshore and in its free-zones comprising shipowners, charterers, traders, freight-forwarders, importers, and exporters. The Emirate of Fujairah is also home to the region’s busiest bunkering outpost. The UAE is undoubtedly the maritime leader within the Middle East region.
Yet there is a sharp contrast between the English and UAE legal systems. The former is built on hundreds of years of common law precedent and boasts specialist maritime courts. The latter is a civil law system with its roots in French and Egyptian law. The UAE Federal Maritime Code dates back to 1981 (with a new code expected), there is no specialist maritime court, and its judges are from various MENA jurisdictions, each with their own nuanced understanding and application of the law. The result has been that there has been little cooperation historically between the two maritime powers and their respective laws and practices are not easily harmonised.
No other Gulf State has established reciprocity with the UK courts. If the UAE and UK press ahead and establish a practice of mutual enforcement of final judgments, the UAE courts, or perhaps more narrowly the Dubai courts, will open a corridor between two maritime nation-leaders, which will enhance judicial connectivity and increase accountability of the international maritime community. The UAE’s maritime players regularly include English law and jurisdiction clauses in their contracts and judgment debtors would no longer be able to avoid enforcement of English judgments in the UAE. English judgments would enjoy the same treatment and carry the same force in the UAE as foreign arbitration awards presently do under the New York Convention 1958. Claimants could seek security in the UAE in aid of English court proceedings without the challenge of enforcing against that security at the conclusion of the main proceedings. We often have enquiries from parties seeking to arrest a vessel in the UAE in aid of English court proceedings, however, our advice is that the claimant would not be assisted, even if the vessel arrest were obtained, because the UAE court would not recognise the final judgment and execute it against the secured vessel. Considering the Ministry of Justice’s letter in September 2022, this hitherto obstacle may soon be removed.
For further information,please contact Adam Gray.
Published in August 2023
