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Middle EastSeptember 29 2022

UAE sends positive signals in matching UK enforcement

The United Arab Emirates is consolidating its standing on the international stage as it leans towards reciprocity of enforcing judgements from the UK. James King reports.
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UAE sends positive signals in matching UK enforcementImage: Getty Images

Courts in the United Arab Emirates (UAE) can now enforce judgements from English courts, following a ground-breaking directive issued by the Gulf state’s Ministry of Justice (MoJ) on September 13. The change impacts all non-criminal civil, financial and marital cases, and marks a major step forwards in terms of establishing higher judicial certainty between the two jurisdictions.

It is a further signal of the UAE’s internationalist credentials, as the country looks to align with global standards and increase co-operation with partners across a range of domains.

The directive issued by the MoJ stems from an English High Court decision to enforce a Dubai Court of Cassation judgement during the case of Lenkor Energy Trading DMCC v Puri (2020). The Court of Appeal subsequently upheld the decision, which concerned a bounced cheque, determining that the Dubai court had jurisdiction and that its judgement was both final and conclusive. As a result, the UAE MoJ directed the attention of UAE courts to the outcome, while underscoring the principle of reciprocity, in a published communication.

A watershed moment

“I think in terms of the macro picture, it is a very positive development because it shows the internationalism of the UAE. It is a landmark development for the country,” says Raza Mithani, managing partner at UAE-headquartered Conselis Law, a specialist disputes and investigations firm. 

The implications of the change could be far reaching. Until the directive was issued, the absence of a treaty between the two countries, covering the mutual recognition of civil judgements, had hindered the enforcement of decisions in both directions. This resulted in, among other things, English court civil judgements against defendants resident in the UAE being rejected by domestic courts on the grounds that reciprocity requirements had not been met. 

in terms of the macro picture, it is a very positive development because it shows the internationalism of the UAE

Raza Mithani

“From a practical perspective, it is important because there are parties in the past who have obtained judgements in the English courts, which they have wanted to enforce in Dubai and that has been difficult,” says Mr Mithani. “Now, for instance, banks can take these judgements and potentially enforce them directly in the onshore Dubai courts.”

The MoJ’s directive could encourage the use of English court jurisdiction clauses between parties in cases where assets or businesses are located in the UAE. Nevertheless, there is no legal basis to the MoJ’s communication and UAE courts are not bound by the document. Most legal analysts expect reciprocity between the two jurisdictions’ courts to increase over time, however. 

Looking ahead, this reciprocity could give rise to unforeseen complexities, particularly in the context of both the English and UAE courts’ agreements with other jurisdictions. Many of these points will take time to iron out.

“It raises interesting questions. Could you take an English judgement, enforce it in the UAE, and use that as a stepping stone to enforcement in one of the other [Gulf Co-operation Council] countries, through existing regional conventions?” asks Mr Mithani. 

Matching the broader trend

The MoJ’s directive comes at a time when the UAE is enhancing co-operation with international partners, particularly in the context of its judicial arrangements. In September 2022, a Dubai court ordered a British national, accused of coordinating a $1.7bn tax fraud scheme in Denmark, to pay $1.25bn to the Danish tax authority. This followed a March 2022 agreement between the two countries that boosted legal and judicial co-operation, particularly with regard to criminal matters.

“Again, it shows that the Dubai courts are willing, in appropriate cases, to entertain claims from overseas creditors, including fiscal creditors, against individuals in the emirate,” says Mr Mithani. 

The UAE has also been looking to improve its reputation with international partners in the wake of its addition to the Financial Action Task Force’s “grey list”. The list requires its constituent countries to be subject to additional anti-money laundering and countering the financing of terrorism (AML/CFT) monitoring. Among other weaknesses in the UAE’s AML/CFT regime, the Paris-based agency has noted a dearth of money laundering prosecutions.

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