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Easier enforcement of judgments and arbitral awards in onshore Abu Dhabi

The Abu Dhabi Global Market (ADGM) and Abu Dhabi Judicial Department signed a memorandum of understanding on 11 February 2018, formalising agreed procedures for the reciprocal enforcement of ADGM and onshore Abu Dhabi Court judgments, decisions and orders, as well as arbitral awards ratified and recognised by those courts (the MoU). This development has the potential to transform the enforcement regime between the ADGM and onshore Abu Dhabi Courts, and brings it into line with that between the Dubai International Financial Centre (DIFC) and onshore Dubai Courts.

ADGM is a financial free zone in Abu Dhabi, similar to the DIFC in Dubai, with its own independent legal and judicial system. Under the MoU, a judgment, decision or order of the ADGM or onshore Abu Dhabi Courts will be directly enforceable in the other court through a streamlined execution process, without a re-examination of the merits. The same process applies to arbitral awards ratified or recognised by the ADGM or onshore Abu Dhabi Courts.
 
A direct route of enforcement for ADGM Court judgments and/or ADGM arbitral awards in the onshore Abu Dhabi Courts is a significant advantage when compared with the potentially lengthy and complex onshore recognition and enforcement The proceedings which would apply to foreign court judgments and foreign arbitral awards.
 
The MoU could potentially be used to enforce foreign court judgments and/or foreign arbitral awards in the onshore Abu Dhabi Courts, using the ADGM Courts as a “conduit jurisdiction”. However, the use of the DIFC Courts as a conduit jurisdiction has proved controversial in Dubai, with a dedicated Judicial Tribunal being formed to resolve issues of competing jurisdiction between the DIFC and onshore Dubai courts.
 
Further information
 
This article is part of the Allen & Overy Legal & Regulatory Risk Note, a quarterly publication. For more information please contact Karen Birch – karen.birch@allenovery.com, or tel +44 20 3088 3710.
 
Legal and Regulatory Risk Note
Middle East