Opinion:
An improved outlook for English judgment creditors in the onshore UAE courts?

There is no treaty, or alternative formal reciprocal arrangement, between the UK and the UAE regarding enforcement of judgments, which has often resulted in the onshore UAE courts using that as a bar to enforcement of foreign judgments.

Whilst only addressed to the Dubai courts, the letter calls for the enforcement of judgments of the English courts in all onshore UAE courts going forward on the principles of reciprocity. This follows the recent decision of the English Court of Appeal in Lenkor Energy Trading DMCC v Puri [2021], which dismissed a Dubai judgment debtor’s appeal against successful enforcement proceedings in England of the AED123m debt on the ground that it would be contrary to public policy to enforce the judgment because the underlying contract was tainted by illegality.

Opinion

In addition to the DIFC Courts having general jurisdiction under Dubai law and the DIFC Courts law to enforce foreign court judgments, since 2013 the DIFC Court and the English Commercial Court have had in place a non-binding procedure for mutual enforcement of monetary judgments in the other’s court: “Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s [now King’s] Bench Division, England and Wales”.

A claim must still be filed in the DIFC Court, and a procedure followed, before a judgment capable of enforcement is given. Even then, enforcement may be restricted to the geographical region of the DIFC if the assets or other subject matter of execution are within the physical jurisdiction of the free zone. Nevertheless, English judgment creditors in the DIFC Court are overall optimistic of enforcement.

It is hoped that this optimism will now translate to the onshore UAE Courts. The underlying judgment in Lenkor was made in an onshore UAE Court, and the UAE MOJ’s recent letter refers expressly to that judgment, and to the MOJ’s consideration that the principle of reciprocity between English courts and UAE courts has been confirmed.

As London remains a centre for international disputes, and international parties entering into commercial transactions and financing in the UAE continue to favour English law in their agreements, the improved outlook for English judgment creditors looking to enforce in the onshore UAE courts is welcome news.

We have specialist lawyers who can support with the enforcement of foreign judgments including court orders, judgments and arbitration awards and work regularly with clients in the Middle East. Please contact Russell J Strong if you need advice.