Out-Law Guide 4 min. read
17 May 2021, 11:54 am
The Dubai International Financial Centre (DIFC) Court takes a liberal and expansive approach to the enforcement of foreign judgments, including those handed down by the English courts.
The DIFC Court has general jurisdiction to enforce foreign court judgments under article 7(6) of Dubai Law No. 12/2014 (the Judicial Authority Law) and article 24(1)(a) of DIFC Law No. 10/2004 (the DIFC Court Law). Although there is no treaty between the UAE and UK facilitating enforcement of judgments between these countries in particular, the DIFC Court and the English Commercial Court have entered into a memorandum of guidance (8-page / 115KB PDF) setting out the procedure for mutual enforcement of monetary judgments in the others’ courts.
The DIFC Court also has a ‘conduit’ role to play in facilitating the enforcement of English court judgments before the onshore Dubai courts.
The memorandum of guidance between the DIFC and English courts has no binding legal effect, and does not supersede any existing or future laws, judicial decisions or court rules. It is intended to promote mutual understanding and cooperating between the two court systems, including their respective laws and judicial processes.
It applies to monetary judgments (those for a fixed or ascertainable sum of money); as well as to English interim injunctions and freezing orders rendered by the Commercial Court.
In order to be enforced in the DIFC Court, the Commercial Court judgment must be final and conclusive, and not subject to appeal. In addition, the Commercial Court must have properly assumed jurisdiction over the matter in accordance with the DIFC conflicts of law rules. The DIFC Court will consider that the Commercial Court assumed proper jurisdiction only where the person against who the judgment was given:
Where the above is satisfied, a Commercial Court judgment may still be challenged in the DIFC Court on limited grounds. These include if the judgment was obtained by fraud; is contrary to public policy; or if the proceedings were conducted in a manner which the DIFC Court regards as contrary to the principles of natural justice. However, the DIFC Court will not re-examine the merits of a Commercial Court judgment and it cannot be challenged on the grounds that it contains an error of fact or law.
The party seeking to enforcement the English judgment must file a claim form in the DIFC Court and provide a concise statement of the nature and particulars of the claim and remedy sought. A certified copy of the Commercial Court judgment must be exhibited to the claim form.
There is no requirement to obtain the permission of the DIFC Court before serving proceedings outside the DIFC, if relevant. However, the defendant can challenge the jurisdiction of the DIFC Court.
If the defendant does not respond, the claimant can obtain judgment in default under part 13 of the DIFC Court rules. If the defendant acknowledges service of the claim form, the claimant must file and serve the particulars of claim on the defendant. The particulars of claim must set out the reasons as to why the Commercial Court had original jurisdiction to hear the case.
In most cases, a claimant can apply for summary judgment without trial under part 24 of the DIFC Court rules unless the defendant can satisfy the DIFC Court that is has a real prospect of success in establishing at trial that the initial judgment was obtained by fraud, is contrary to public policy or the proceedings were conducted in a manner which the DIFC Court regards as contrary to the principles of natural justice.
If the claim is successful, the DIFC Court can enforce the judgment in the geographical region of the DIFC if the assets or other subject matter of execution are within the physical jurisdiction of the free zone. If enforcement of the DIFC Court judgment is sought in the onshore Dubai courts in relation to assets within onshore Dubai, there is a risk that the onshore court will decline to enforce the judgment.
In principle, under article 7(2) of the Judicial Authority Law, any recognised judgment of the DIFC Court should be enforceable in the onshore Dubai courts, without any reconsideration of the merits of the original case. This raises the possibility of using the DIFC Court as a ‘conduit’ jurisdiction to enforce foreign judgments in the onshore Dubai courts, potentially overriding the Dubai courts’ own jurisdiction.
To address this, a Joint Judicial Committee was established in June 2016 to resolve jurisdictional conflicts between the DIFC Court and the Dubai courts. The committee is made up of seven members, there of which are from the DIFC Court and four from the Dubai courts. In the event of a deadlock the chair, who is the head of the Dubai Court of Cassation, has the casting vote. The decisions of the Joint Judicial Committee are final and unappealable.
In the early stages following the committee’s formation, use of the DIFC Court as a conduit jurisdiction to enforce foreign judgments intended for execution in onshore Dubai intended to be severely restricted. However, more recently, the committee has indicated that it will not prevent the DIFC Court from being used as a conduit jurisdiction when there are no parallel proceedings in the onshore Dubai courts. In addition, if one party is shown to have conceded that the DIFC Court has jurisdiction, then this may justify a finding that there is no conflict. The committee has also begun to honour the existence of express jurisdiction agreements in favour of the DIFC Court.
Where a conflict exists, the Joint Judicial Committee has ruled that the onshore Dubai courts are the competent courts to determine the case because they have general jurisdiction under the procedural laws of the UAE. There has, however, been an express shift in recent emphasis away from references to the “general jurisdiction” of the onshore courts as an overriding factor.
Co-written by Sammy Nanneh of Pinsent Masons. This guide is based on a practice note first published by LexisNexis Middle East.