Historically, there have been challenges in enforcing UAE Court judgments in England, and in enforcing English Court judgments in the UAE, most notably because there is no treaty dealing with mutual recognition and enforcement between the UK and the UAE. However, a recent case in the English Courts, namely Lenkor Energy Trading DMCC v Puri [2020] EWHC 75 (QB) (Lenkor) may signal matters are changing.
Here, the English High Court enforced a Dubai Court judgment, on the basis that it was the final and conclusive judgment of a court of competent jurisdiction. Despite public policy arguments being raised by the Defendant relating to illegality, piercing the corporate veil and penalties, such arguments were dismissed by the English court in their entirety. The Court found that the fact "that an English Court might have approached matters differently is irrelevant. It was a Dubai court applying the law of Dubai." The public policy defence is only applied if the enforcement of the foreign judgment would offend English public policy, and here it did not and so summary judgment was ordered.
This English judgment will likely have significant impact on inward enforcement prospects here in the UAE, where enforcement of English judgments has been difficult because of the lack of treaty and the lack of reciprocity.
The civil procedure for the enforcement of foreign judgments in the onshore UAE Courts is set out in Article 85 of the Cabinet Resolution No. 57 of 2018 concerning the Executive Regulations (the Executive Regulations) of Federal Law No 11 of 1992 (as amended, the Civil Procedure Code). Previously this fell under Article 235 of the Civil Procedure Code which is now repealed.
These Executive Regulations removed the bar to enforcement, in which UAE Courts could refuse enforcement of judgments in cases which they deemed that they had jurisdiction over the substantive dispute. Now UAE Courts may only refuse recognition on the basis of jurisdiction if they have "exclusive jurisdiction" over the subject dispute (Article 85(2)(a)).
However, reciprocity remained essential and was regularly used as a bar to enforcement. Article 85(1) of the Executive Regulations states that orders issued in a foreign state may only be enforced in the UAE under the same conditions laid down in the jurisdiction issuing the order. Accordingly, the UAE courts will only recognise and enforce an order where reciprocity exists between the UAE and the issuing jurisdiction.
Generally, reciprocity is easiest to prove in cases where there is a mutual recognition and enforcement treaty in place. This is not the case for the UK, but now it is possible to demonstrate reciprocity to the UAE Courts on account of Lenkor.
We are already aware of anecdotal evidence of English judgments now being enforced in the Dubai Courts as a result of the judgment. We anticipate that enforcement of English judgments will now become more common, albeit other grounds to block enforcement may subsist.
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