Case Brief: Challenges in Enforcing Foreign Judgments

Case Brief: Challenges in Enforcing Foreign Judgments

MAS LAW successfully obtains an execution order for the enforcement of a United States Court judgment overcoming the hurdle of reciprocity.

The challenge of evidencing reciprocity is one that is most commonly faced by parties seeking to enforce foreign judgments before the UAE Courts. In particular, reciprocity can cause problems for judgment creditors due to the position that it must be evidenced by a treaty or bilateral agreement, a position many execution judges hold. Despite such challenges, and lack of a bilateral agreement or treaty on enforcement of judgments between the USA and the UAE, MAS Law was able to successfully obtain an execution order from the Dubai Courts for the enforcement of a Texas Court judgment.

Enforcing foreign judgments in the UAE

The conditions and procedure for the enforcement of a foreign judgment before the UAE onshore courts is governed by Articles 222 to 224 in conjunction with Article 44 of Federal Decree Law no. 42/2022 On the Promulgation of the Civil Procedure Law (the “Civil Procedure Code”).

A party seeking to enforce a foreign judgment must file an execution petition before the execution judge of the competent court. The execution judge is thereafter required to issue their order within five (5) days from the date of the petition’s submission, with such order being appealable pursuant to the relevant channels of appeal.

In order for the foreign judgment to be admissible for execution, however, the following conditions prescribed under Article 222(2) of the Civil Procedure Code must be fulfilled:

  • (a) The courts of the UAE are not exclusively competent in the dispute in which the judgment or order was rendered and the foreign courts that issued it are competent in accordance with the rules of international jurisdiction established by their law.
  • (b) The judgment or order is delivered by a court in accordance with the law of the country in which it was issued and duly ratified.
  • (c) The litigants in the case in which the foreign judgment was delivered were summoned and were duly represented.
  • (d) The judgment or order has the force of res judicata in accordance with the law of the court which issued it, provided that the judgment has acquired the force of res judicata or provided for in the same judgment.
  • (e) The judgment does not conflict with a judgment or order rendered by a court of the UAE and does not contain anything contrary to public order or morals.

In addition to the above conditions, the party filing the application must evidence to the execution judge’s satisfaction the existence of reciprocity of judgements between the relevant foreign court and the UAE courts. That is, parties are required to show that a UAE court judgment would be similarly enforced in the foreign state issuing the judgment.

Challenges to enforcement: reciprocity
The requirement for reciprocity under UAE law can be evidenced via conventions or bilateral treaties signed between the UAE and foreign countries. The UAE is party to a number of treaties and bilateral agreements addressing the enforceability of foreign judgments, including the 1996 Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notifications and agreements with China, France, India and Kazakhstan respectively.

However, in the absence of such a treaty or agreement between the UAE and the foreign state, the reciprocity requirement can often be difficult to satisfy. Particularly in practice, it may be difficult to demonstrate to the execution judge’s satisfaction that an equivalent UAE judgment would be enforced in the foreign jurisdiction. MAS Law recently faced, and overcame, such an issue in seeking to enforce a US Court judgment before the Dubai Courts.

Case brief

Our client, an American corporation, sought the enforcement of a USD 12 million final judgment issued by the Courts of Texas against a UAE freezone entity.

On filing the initial execution petition to enforce the judgment, the execution judge dismissed the petition on the basis that no bilateral agreement or treaty between the UAE and the USA was submitted. The aforesaid, as per the judge’s rationale, was required in order to evidence and satisfy the reciprocity requirement between the UAE and the USA.

While subsequent meetings with the execution judge were held to reiterate the fact that reciprocity can be evidenced in a number of ways and the provision of treaty is not a mandatory requirement, as explicitly noted in a Dubai Court of Cassation judgment, the execution judge upheld his decision to dismiss the petition.

On refiling the execution petition, MAS Law was able to successfully obtain an order for enforcement of the foreign judgment. This was achieved by not only putting forward the above argument, but by also providing evidence to the execution judge of an Abu Dhabi Court judgment which was enforced by the New York Courts.

The US Courts judgment, as successfully argued by MAS Law, evidenced the satisfaction of the reciprocity requirement between the USA and the UAE. Accordingly, the execution judge accepted the petition, recognized the Texas Court judgement and issued an execution writ for its enforcement.

“We are very pleased to have secured this successful outcome for our client.” commented the firm’s dispute resolution partner Abdelmajeed Zwairi, “While it was previously difficult to enforce US court judgments before the UAE Courts, these developments and case precedents may pave the way for future judgments being more readily enforced as they evidence the satisfaction of reciprocity between the two countries”.

The MAS Law team was led by partner Abdelmajeed Zwairi and senior associate Hosam Ahmed.