Promising enforcement in DIFC and onshore Dubai courts
In a recent case, the onshore Dubai Courts have granted an interim attachment over assets held onshore in Dubai, following a DIFC Court freezing order that was granted in support of the enforcement of an English High Court judgment. This is an interesting case for banks seeking to enforce foreign judgments against debtors holding assets onshore in Dubai (and the wider UAE).
The claimant obtained a judgment for financial relief in divorce proceedings in the English High Court. The claimant then sought to have that judgment enforced in the DIFC Courts, and applied for a DIFC Court freezing order in respect of assets held in onshore Dubai. In bringing the enforcement proceedings, the claimant expressly sought to invoke the DIFC Courts’ ‘conduit jurisdiction’ to make an order which could then be enforced in onshore Dubai. Subsequent to obtaining the DIFC Court freezing order, the claimant applied for, and was successful in, obtaining an interim attachment from the onshore Dubai Courts over the onshore assets.This case is another example of the DIFC Courts’ willingness to act as a conduit jurisdiction for enforcement of foreign judgments in the onshore Dubai Courts.
We have previously reported on the use of the DIFC Courts as a conduit jurisdiction, which has the potential to provide judgment creditors with significant benefits; effectively bypassing the usual route for enforcement of foreign court judgments or arbitral awards in the onshore Dubai Courts, which is often unpredictable and time consuming. The use of the DIFC Courts as a conduit jurisdiction has proved controversial in Dubai. See: allenovery.com/publications/en-gb/lrrfs/middleeastandafrica/Pages/The-conduit-jurisdiction-of-the-DIFC-Courts.aspx
We understand that the onshore Dubai Courts granted the interim attachment in recognition of, and to give effect to, the DIFC Court freezing order. Accordingly, the case would also appear to be an example of the DIFC Courts’ conduit jurisdiction working in practice. However, it is not clear whether, in granting that relief, the onshore Dubai Courts considered the English High Court judgment and/or recognised the conduit jurisdiction of the DIFC Courts.
Further, we understand that the case has since been referred to the Joint Judicial Committee to determine potential conflicts of jurisdiction between the Dubai and DIFC Courts, and that the DIFC Court proceedings have been stayed in the interim.