A route to enforcement in Dubai and the wider UAE?
14 May 2013
On 23 January 2013, the Dubai International Financial Centre (DIFC) Courts and the English Commercial Court produced a Memorandum of Guidance (the Memorandum) on the reciprocal enforcement of judgments between the English Commercial Court and the DIFC Courts.
The Memorandum is not a law or a treaty and has no legal binding effect. However, the Memorandum provides a useful summary of how money judgments, ie judgments requiring the payment of a sum of money, can be enforced between the DIFC Courts and the English Commercial Court.
There has been some speculation within the legal community in the UAE that the Memorandum could provide a route for the enforcement of English court judgments outside the DIFC in Dubai and the wider UAE. In our view, this is premature. Amongst other things:
- The Memorandum is silent on this and there is no precedent for it .
- The Memorandum is not a law or a treaty and has no binding legal effect.
- In circumstances where a party sought to commence a common law claim in the DIFC Courts to enforce a money judgment from the English courts against assets located outside the DIFC but within Dubai or the wider UAE, it is not clear that the DIFC Courts would have, or accept, jurisdiction to entertain such a claim.
- How this would be viewed by the Dubai courts is also unclear. This is potentially important because it remains possible for a judgment debtor to challenge the "onshore" execution process (which would follow any successful enforcement action in the DIFC Courts).