On 9 September 2013, a memorandum of guidance was signed by the DIFC Courts and the New South Wales State Supreme Court for the reciprocal enforcement of each Court’s money judgments. On 28 March 2014, the DIFC Courts entered into a further memorandum of guidance with the Federal Court of Australia (“Memorandum”).

The Federal Court of Australia has jurisdiction to hear cases in relation to admiralty, bankruptcy, competition, consumer protection, corporations and intellectual property, amongst other areas. Similar to the Memorandum of Guidance between the DIFC Courts and the New South Wales State Supreme Court, the Memorandum does not have any binding effect. It is, however, significant because there is no treaty between the UAE and Australia for the reciprocal enforcement of judgments. The Memorandum therefore provides guidance as to both the criteria and procedure for the recognition and enforcement of money judgments of the Federal Court of Australia in the DIFC Courts and vice versa.

The DIFC Courts and Federal Court of Australia both apply the common law approach to the enforcement of foreign judgments. This approach requires that (a) the court which rendered the judgment must have had jurisdiction to determine the subject matter of the dispute; (b) the parties to the original court proceedings and the enforcement proceedings must be the same; (c) the judgment must be final and conclusive (even though it may be subject to appeal); and (d) the judgment must be a money judgment (judgments ordering fines, taxes or penalties do not constitute money judgments). If these criteria are satisfied, there are very limited grounds on which a judgment may be challenged, and the court (either the DIFC or the Federal Court of Australia, as the case may be) will not re-examine the merits of any judgment which is sought to be registered. A copy of the Memorandum can be found here.

The signing of this second Memorandum of Guidance between the DIFC Courts and Australian Courts is noteworthy. The governments of the UAE and Australia continue to take steps to strengthen the trading relationship between the two countries. Close co-operation between the courts of the UAE and Australia is therefore key to supporting commerce between the two countries. The agreements recorded in the memoranda also add another layer of certainty for investors engaged in business between the UAE and Australia, providing some reassurance and guidance about the procedures for enforcing money judgments in the respective jurisdictions. However, it should be noted that the terms recorded in the Memoranda of Guidance between the DIFC Courts and the Australian Courts do not apply to the enforcement of money judgments in the local UAE courts. For more information on the criteria for enforcing Australian judgements in the local UAE courts, see section 4.1 of the article entitled "The Enforcement of Foreign Judgments in the UAE and DIFC Courts" written by Saloni Kantaria and recently published in the Arab Law Quarterly. A copy of the paper can be found here.