A Landmark Court of Cassation Ruling on the Enforcement of Foreign Judgments in the UAE: Clarifying Jurisdictional Requirements
Dispute Resolution / UAE
Amro HassanSenior Associate,Dispute Resolution
Dina AssarProfessional Support Lawyer,Dispute Resolution
Mohammed AlqahtaniTrainee Lawyer,Dispute Resolution
On 15 August 2024, the Dubai Court of Cassation issued a significant judgment that provides a clear framework for determining when a foreign judgment can be enforced. This judgment addresses a historically problematic requirement for the enforcement of foreign judgments in the UAE—specifically, the condition that UAE courts must not have jurisdiction over the dispute. In this regard, the court confirmed that enforcement can only be ordered after verifying that UAE courts do not have exclusive jurisdiction over the dispute for which the foreign judgment was issued. However, if jurisdiction is shared between UAE courts and foreign courts—such as in cases involving the defendant’s domicile—this does not prevent the enforcement of the foreign judgment (hereinafter referred to as the “Judgment”).
Dubai Court of Cassation judgment 339 of 2023 serves as both an assuring and clarifying practical implementation by the Dubai Court of Cassation of the Executive Regulations (of the Civil Procedure), particularly Articles 85(2)(a) of the Executive Regulations in relation to the enforcement of a judgment issued in a foreign state. The judgment confirms that the enforcement may be ordered, provided that the UAE courts do not have exclusive jurisdiction over the dispute and that all other conditions are met.
An applicant sought enforcement (exequatur) of a judgment issued by the Poznań Regional Court in Poland, which ordered the respondent to pay a specified sum to the applicant. The applicant filed a petition with the Execution Judge of the Dubai Court of First Instance, seeking exequatur for the enforcement of the Polish court's judgment in the UAE. The Execution Judge granted the exequatur, allowing the enforcement of the Polish judgment in the UAE.
The respondent appealed this decision to the Dubai Court of Appeal, seeking to set aside the exequatur order. The Court of Appeal's decision revoked the enforcement decision on the grounds that the Dubai Courts had international jurisdiction over the dispute due to the respondent's domicile in the UAE. The Court of Appeal’s ruling was apparently based on the provisions of the now-repealed Civil Procedures Law (Federal Law No. 11 of 1992) (the “Old Civil Procedures Law”), which did not require the UAE courts’ jurisdiction to be exclusive for enforcement of a foreign judgement to be denied.
Subsequently, the applicant filed an appeal before the Court of Cassation, arguing that the Court of Appeal had misinterpreted the law. The applicant contended that the respondent's domicile in the UAE did not preclude the enforcement of the Polish court's decision, as the dispute originated in Poland, where the respondent is a national, and the applicant was unaware of the respondent's UAE domicile. The Dubai Court of Cassation ultimately ruled in favour of the applicant, clarifying the jurisdictional issues and the conditions under which foreign judgments can be enforced in the UAE in light of the changes made to the Civil Procedures Law.
The judgment raises the critical question of when UAE courts should deny the enforcement of foreign judgments based on their jurisdiction over the underlying dispute considering the changes made to the Civil Procedures Law.
The Court of Cassation addressed the applicant’s argument that the Court of Appeal incorrectly set aside the order for exequatur. The applicant contended that, even though the Dubai courts had international jurisdiction due to the respondent's domicile in the UAE, this did not preclude legal action in the respondent's home jurisdiction, particularly since the decision to be enforced pertained to an event that occurred in Poland, and the applicant was unaware of the respondent's UAE domicile.
The Court of Cassation affirmed the importance of adhering to the clear and direct approach set forth in the statute. The court emphasized that when the law is explicit, it reflects legislative intent and should not be subject to reinterpretation and judges have a duty to apply the laws as written. Accordingly, the court asserted that, based on the express provisions of Articles 85(2)(a) of the Executive Regulations (promulgated by Cabinet Resolution No. 57 of 2018) of the Civil Procedure Law (“Executive Regulations”) (the applicable law in this case) enforcement of a judgment issued in a foreign state may be ordered, provided all other conditions are met, only if the UAE courts do not have exclusive jurisdiction in the dispute in which the judgment or order to be enforced has been issued. Therefore, the existence of concurrent jurisdiction, where both the UAE courts and the foreign court that issued the judgment have the power to hear the dispute, does not prevent the issuance of an order to enforce the foreign judgment.
The court further emphasized that the Executive Regulations settled the issue by clarifying that exequatur for a foreign judgment may only be denied if the UAE courts have exclusive jurisdiction to hear the dispute in which the judgment was issued. This requirement is provided and maintained in Article 222 of Federal Law No. 42 of 2022, which promulgates the latest Civil Procedure Law.
This judgment marks a significant judicial assurance of the shift from prior outdated precedents based on the Old Civil Procedures Law, where non-exclusive jurisdiction by UAE courts was sufficient to deny exequatur. However, the changes to the Civil Procedures Law clarify that merely establishing a basis for UAE jurisdiction (e.g. the respondent’s domicile in the UAE) does not preclude the enforcement of a foreign judgment and a judgment can only be denied if exclusive jurisdiction is held by the UAE courts.
The Court of Cassation pointed out that the Court of Appeal’s rationale, which relied on the respondent's residence to establish exclusive jurisdiction, misapplied the clear legislative amendments in this respect. Consequently, the Court of Cassation overturned the Court of Appeal's verdict and remanded the matter for a new decision.
The judgment demonstrates the application of legislative changes that may have gone unnoticed by legal practitioners and lower courts concerning the enforcement of foreign judgments in the UAE. By clarifying and reinforcing the updated conditions under which such judgments can be enforced, the Dubai Court of Cassation clarifies the distinction between exclusive and concurrent jurisdiction in the context of enforcing foreign judgments and has provided crucial guidance on when UAE courts should deny the enforcement of foreign judgments. The judgment ensures that only exclusive jurisdiction of the UAE courts can bar the enforcement of a foreign judgment, thereby allowing for concurrent jurisdiction without hindering enforcement.
For further information,please contact Amro Hassan, Dina Assar and Mohammed Alqahtani.
Published in December 2024
