UAE Law and Practice Contributed by: Arsalan Tariq, Nil Acar and Ahmed Kamran, BSA LAW
The DIFC courts have an independent legal frame- work that permits the recognition and enforcement of foreign court judgments under Article 24 of DIFC Law No 10 of 2004 and Article 7 (4) of Dubai Law No 12 of 2004 (the “Judicial Authority Law”). Where the under- lying matter has a sufficient connection to the DIFC, such as assets or parties located within the jurisdic- tion, the DIFC courts may ratify a foreign judgment without re-examining the merits. However, recent decisions by the Joint Judicial Tribunal have narrowed the ability to use the DIFC courts as a “conduit juris- diction” for enforcement where no such connection exists, reinforcing the general principle that foreign judgments concerning assets outside the DIFC should be enforced through the Dubai onshore courts. Similarly, the ADGM courts operate under a common law system and have adopted a legal framework that allows for the recognition and enforcement of foreign judgments with minimal formality. Under ADGM Courts Regulations 2015, the ADGM courts may enforce judg- ments from foreign jurisdictions without rehearing the case, provided the judgment is final, conclusive and not contrary to ADGM public policy. The ADGM has also entered into mutual recognition agreements with various jurisdictions and benefits from the Abu Dhabi Judicial Department’s co-operation protocol, which facilitates the onward enforcement of ADGM judg- ments in Abu Dhabi onshore courts. Like the DIFC, however, the use of ADGM as a conduit jurisdiction may face practical limitations unless a genuine con- nection to the ADGM exists. Arbitral Awards The UAE is a signatory to the New York Convention (1958) and has domesticated its provisions through Federal Law No 6 of 2018 on Arbitration, providing a clear pathway for enforcing foreign arbitral awards without re-examining the merits. The award must be final, issued by a properly constituted tribunal, and not in conflict with UAE public policy or morality. In addi- tion to the New York Convention, the UAE is also party to several regional and bilateral treaties, such as the Riyadh Arab Convention (1983) and the GCC Conven- tion (1996), which can offer alternative legal bases for recognition and enforcement of arbitral awards, par- ticularly in disputes involving regional counterparties. In practice, arbitral awards tend to be enforced more
efficiently than foreign court judgments, especially when the arbitration is seated in a jurisdiction with a strong rule of law tradition and procedural compat- ibility with UAE standards. In practice, arbitral awards tend to be enforced more efficiently than foreign court judgments, especially when the arbitration is seated in a jurisdiction with a strong rule of law and procedural compatibility with UAE standards. However, UAE courts retain discre- tion to refuse enforcement if the award or foreign court judgment violates public policy or morality. The concept of public policy in the UAE has historically been interpreted broadly and may include matters such as compliance with Sharia principles (in relevant contexts), procedural fairness, or the validity of inter- est provisions. While recent judicial trends indicate a narrowing interpretation of this defence, aligned with international best practices, public policy remains a potential hurdle and is often raised by parties resist- ing enforcement. The risk of non-enforcement on this basis is higher where the award arises from a dispute involving government entities, sensitive sectors or issues governed by substantive UAE laws. 6.4 A Foreign Lender’s Ability to Enforce Its Rights There is no legal restriction on foreign lenders enforc- ing their rights under a loan or security agreement in the UAE. However, in practice, certain procedural and regulatory considerations may affect enforcement such as Arabic translation requirements, the need for local security agents, potential limitations arising from UAE public policy, and sovereign immunity concerns in transactions involving government-related entities.
7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes
The UAE’s insolvency framework is governed by Fed- eral Decree Law No 51 of 2023 on Financial Restruc- turing and Bankruptcy, which came into effect on 1 May 2024, replacing the previous Federal Decree Law No 9 of 2016. The new law introduces several important reforms aimed at modernising the UAE’s insolvency regime and enhancing creditor protec- tions. In parallel, the Specialised Bankruptcy Court
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