The DIFC Courts were set up in the Dubai International Financial Centre (“DIFC”) in 2004. They are an independent judicial system drawing on the expertise of common law judiciary and common law procedural rules. The DIFC Courts have exclusive jurisdiction over all civil and commercial disputes within the DIFC financial district of Dubai. They also have jurisdiction in instances where the jurisdiction is conferred upon them by the agreement of the parties.
A Memorandum of Guidance (“MoG”) between the DIFC Courts and the English Commercial Court, was signed on Wednesday 23 January 2013. The MoG evidences further strengthening of legal and trade relations between Dubai and the UK.
The purpose of the MoG is to set out the understanding of the procedures for the enforcement of each court’s monetary judgments. However, the MoG has no binding legal effect and is described as non-exhaustive. The intention of the MoG is to promote a mutual understanding of the laws and judicial process of the respective courts in an effort to improve public perception and understanding.
There is currently no treaty in place pursuant to which either court’s judgments may be enforced by the other. The approach of the DIFC Courts to the enforcement of Commercial Court judgments is based on the English common law, which provides that in events where a foreign court of competent jurisdiction has determined that a liquidated sum is due from one person to another, a legal obligation arises on the debtor to pay the same.
Requirements for enforcement
In order for a judgment to give rise to a debt claim in either the Commercial Court or the DIFC Courts:
- the original judgment must be final and conclusive and will be considered as such in instances where it is subject to an appeal; and
- the original court must have had jurisdiction, either according to English or DIFC rules on the conflict of laws, to determine the subject matter of the dispute.
Neither court will:
- enforce certain types of judgment from the other (e.g. judgments ordering the payment of taxes, fines and penalties); or
- re-examine the merits of a judgment of the other.
A judgment of either the DIFC or Commercial courts will be enforced on the basis that the defendant has a legal obligation, recognised by the applicable court, to satisfy the judgment of the original court.
Enforcing a DIFC judgment outside of DIFC
In June 2009, the Dubai Courts and the DIFC Courts issued a Protocol of Enforcement to clarify enforcement procedures between the two courts and across the jurisdictions of the DIFC and Dubai as well as the United Arab Emirates.
The Protocol established that where enforcement of a judgment, award or order of the DIFC Courts falls outside of the DIFC Courts’ jurisdiction the following must occur:
- the judgment, award or order must be final and appropriate for enforcement;
- the judgment must be translated into English or Arabic where applicable by a legal translator ratified by the DIFC Courts’ registry;
- a letter from the relevant court registry to the court in which enforcement is sought requesting enforcement of the judgment, award or order, award or order must accompany the judgment, award or order;
- the documents must be submitted to the nominated Execution Judge from time to time in the relevant court in which enforcement is sought. The Dubai Courts’ Execution Judge will apply the UAE Civil Procedures Law and has no jurisdiction to review the merits of a judgment, award or order of the DIFC Courts; and
- the applicable enforcement fee shall be paid by the applicant to the Dubai Courts.
Where a DIFC Courts’ judgment is to be enforced outside of Dubai in another emirate, enforcement will proceed in accordance with the relevant civil procedure rules and procedures that apply with respect to the enforcement of Dubai Court judgments in other emirates (e.g. Abu Dhabi, Ras Al-Khaimah, etc).
Importantly, a DIFC Court judgment is given the same status and enforced in the same manner as a Dubai Court judgment and vice versa. This is particularly important when considering issues relating to enforcement of judgments outside the UAE (e.g. the Gulf Cooperation Council states), where bi-lateral and other treaties exist in aid of the enforcement of judgments between GCC countries (e.g. Riyadh Convention 1983).