Enforcement efforts receive a significant boost in the United Arab Emirates
By Mateen Beg
A pair of recent legal developments involving the United Arab Emirates should significantly enhance the ability of parties seeking to enforce judgments from this important Middle Eastern business hub.
First, India and the UAE have signed, ratified and published treaties in which both countries have agreed to enforce judgments from each other’s courts. Similarly, in a closely watched case, The High Court of Justice in London has ruled that a judgment from Dubai is enforceable in the courts of England and Wales.
For Omni Bridgeway and its clients, the changes are a welcome development to facilitate the path of recoveries from judgments both emanating from the UAE or arriving in the country from Indian or English courts.
Three treaties with India
On Jan. 17, the Indian Ministry of Law and Justice published official notice of the ratification of three treaties between the country and the UAE. One concerns mutual legal assistance on criminal matters. Another allows extradition between the two countries and the third is the “Agreement between the United Arab Emirates on Juridicial and Judicial Cooperation in Civil and Commercial Matters.”
Given the demographics of the UAE, with its large expatriate population from India, the treaties could be game changers in terms of enforcement. Any parties that have willfully defaulted on a judgment who have absconded to India from the UAE, will no longer be able to avoid enforcement actions in the local Indian courts.
As legal commentators have noted, this agreement should allow claimants to bypass India’s complicated civil procedures for enforcing foreign judgments, a process which includes a review of the merits. Now, companies, lenders, and enforcement specialists like Omni Bridgeway will have a route to track down the subject of a major UAE recovery effort and rely upon the provisions of the treaties to reciprocally enforce civil judgments.
The civil and commercial cooperation treaty is the result of a 20-year effort by the UAE to enforce its court’s judgments in India. The treaty was first ratified by UAE officials in 2000.
A key ruling in London
In the other significant UAE-related enforcement development this year, the High Court in London held on January 23rd that a judgment of the Dubai First Instance Court should be recognised on the basis that it was final and conclusive of a court of competent jurisdiction.
In so doing, the court rejected the defendant's submission that recognition of the judgment would be contrary to English public policy. The public policy defence is only applied if the enforcement of the foreign judgment would offend English public policy. Since it did not in this case, a summary judgment was ordered.
“The case against [the defendant] in Dubai was resolved according to the rules which the laws of Dubai apply to Dubai companies and to individuals who write cheques on Dubai accounts,” wrote Master Richard Davison in the High Court decision. “[The defendant] operated in Dubai, and he knew that in writing the cheques he was subject to Dubai law. … [T]here is nothing repugnant to English public policy in recognising a judgment based upon [Dubai law].”
The decision in Lenkor Energy Trading DMCC v Puri,  EWHC 75 (QB), represents a major step forward for enforcement recognition between the UAE and U.K. At present, there is no treaty dealing with mutual recognition and enforcement between the two countries. As a result, enforcing UAE judgments in England and vice versa has been particularly challenging.
From Omni Bridgeway’s perspective, the U.K. decision should make it easier to “export” judgments to the UAE and will have a significant impact on inward-facing enforcement prospects in the country.
Omni Bridgeway’s team of enforcement experts and asset tracers track defaulters and their assets around the globe. A successful result for their clients can hinge on getting a judgment recognised in a jurisdiction where the defaulting party may have significant assets. The more open the country is to foreign judgments, the more likely a recovery in that jurisdiction will occur.
Coincidentally, Omni Bridgeway’s Middle East office is based in Dubai, and is the home base of the company’s partnership with the World Bank’s International Finance Corporation. That project, MENA DARP, is aimed at distressed asset recovery and dispute resolution funding in the Middle East, North Africa, and Central Asia regions.
The project allows banks to partially sell or monetise non-performing loans, and to leverage Omni Bridgeway’s expertise in global asset tracing, funding and management of legal enforcement proceedings. To qualify for the MENA DARP program, the value of the non-performing loan must be greater than $2 million.