27 Jun 2022
The execution procedure under the judiciary of UAE is complex, mainly due to each emirate having its own jurisdiction when the matter is related to that emirate of UAE. Three emirates have their own jurisdiction different from the federal court of UAE that is Abu Dhabi, Dubai, Ras Al Khaimah. Furthermore, Abu Dhabi and Dubai have recognized their financial free zone within their region which comprises the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Markets (ADGM). Therefore, the judgment by the execution court will be depending on the region where the verdict was passed either with the emirates or federal court of UAE, or DIFC or ADGM regulated courts.
Under the Federal Law, Number 11 of 1992 on the Civil Procedure Code and section 3 of Cabinet Resolution Number 57 of 2018 Concerning the Executive Guidelines of the Civil Procedure Code states that execution against the debtor cannot be made unless the final verdict is made. Moreover, the virtue of Article 192 of the execution rules states that the courts of emirates and federal court of UAE shall be following the laws set in civil procedure in the UAE. Some of the rules comprised in execution guidelines are a duty of execution judge and the enforcement generals as per Articles 69 to 74, under Article 75 to 76 the procedure of the writ of execution, under Article 77 to 88 for Immediate enforcement, and lastly under Article 97 to 102 the procedure set forth.
The procure for DIFC AND ADGM laws is different from the federal courts. DIFC Law No. 10 of 2004 governs the judgment passed by the DIFC court in Dubai and ADGM Court Procedure Rules 2016 governs the judgments passed by the ADGM in Abu Dhabi. The financial free zones are limited to pass their judgment on the foreign judgment. However, as per Article 241) (a) the court of DIFC under its jurisdiction can sanction the judgment resulting from the foreign judgment and chapter 10 of the ADGM court guideline can enforce the foreign judgment. It is important to note that the judgment of the court of the first instance becomes enforceable only when both the party fails to appeal within set 30 days. If the appeal is made, then the judgment will not be resulting and therefore, execution will not be enforced.
The Procedure of Execution in the Different Emirates
When the execution of judgment is passed in the same emirate, the party in whose favor the judgment ruled will need to follow additional steps to make an order for execution from the execution court under the guidelines set forth by civil law procedures. Generally, the execution procedures begin by the execution judge passing the summons of executing judgment on the losing party as per Article 75. Some guidelines need to be followed to be attached to the summonses. As per Article 97 of the execution guidelines the request to make the necessary payment and if there are other requirements within the 15 days to follow which is served upon the judgment to the losing party. Once the 15 days’ notice has been expired and there is no response from the losing party, the claimant can make a formal request to the court to identify the asset in possession of the losing party which will be through Attachment and sale of the borrower’s property, Attachment of shares and ties, Attachment and sale of property, Custody of the defaulting borrower. The decision with regards to the execution enforcement depends on the judge unless and until it has been passed to another judge in a different emirate as per Article 70(2).
There are methods by which the process can be faster as per Article 77 to 84 where immediate execution of judgment can be done by the will of the judge. Nevertheless, the losing party can request to hold the execution if there is any serious damage resulting from the immediate execution guidelines as per the Article 83 to 84. The judgment passed can be challenged in certain situations which are listed in Article 72(2) and 72 (3). Moreover, under the judicial relation between the emirates of UAE, the judgment passed by one emirate can be enforced by another by the execution judge. The documents required are Writ of execution, power of attorney (POA) to legal assistance provided, Notarized and legalized Complete application.
The execution procedures in financial-free zones follow the common law procedures. That is, when the resulting verdict is passed, it becomes effective from that moment and there are no additional steps to enforce the executive order which is usually the case with emirates with regards to civil procedures. The procedures set forth for the DIFC execution order are under Article 42 which states that the enforcement of DIFC will be applicable within DIFC under the guidelines of RDC. In ADGM the winning party needs to apply with required documents, usually practice direction along with the related memorandum of understanding of court of appeal in accordance to rule 302 of ADGM. All documents will need to be presented in Arabic except for one submitted in DIFC and ADGM.
Methods of Execution and Available Remedies with Different Jurisdiction
Before the judgment is passed, the courts of emirates actions are limited to precaution carried out with regards to the attachment of specific assets. Specific performance and sanction order are among the limitation that is not granted by the emirates court. On the other hand, financial free zone courts provide many interims orders not limited to custody orders, orders relating to performance against assets. To secure the debt, the claimant can apply for execution measures in case the application of the executive order is on hold as per Article 85.
To avoid unnecessary delay in payment on the execution of the judgment, the winning party can be entitled to the interest from the date of judgment as per Article 76 of Federal Law Number 18 of 1993 with a set interest rate of 12%. Nevertheless, interest on interest is not granted. Since courts of emirates are not entitled to charge the interest, they can apply the foreign interest following the rules of its jurisdiction. this applicability is usually seen with DIFC courts, where an interest with foreign jurisdiction is enforced before the judgment is made but once the judgment is passed the interest will be per DIFC law. In ADGM under section 173(4) of court guidelines the interest charged will be decided on the sum of money payable which shall be due from judgment till the registration is done. For the emirates court, the money will be converted into UAE AED. Nevertheless, there won't be the exchange of currency when the judgment Is in DIFC or ADGM.
Arbitration Awards and Legal Guidelines
Three jurisdictions that deal with arbitration awards in UAE are the emirates courts, the financial free zone of DIFC, and ADGM. Therefore, the arbitrational award will be decided in terms of the jurisdiction it takes place. As per Article 52 to 57 of the UAE Federal Law Number 6 of 2018 states that the arbitration awards will be decided with the regulation of emirates jurisdiction and for the financial free zones it will be as per the Article 42 to 44 when arbitration award is within DIFC and part 4 of the ADGM regulation when the arbitration awards are in ADGM. Whereas execution of foreign seated awards is governed under Article 85 of execution regulation. The relevant information that is necessary to include are name, identification proof, profession, work location, and contact evidence of the judgment debtor, If the winning party has no residence in the UAE, the current place of stay must be provided with a legal representative in UAE and the same with the defendant, information about the court where enforcement is initiated, the date management decided for the claim to be made, further information regarding the claim made, and lastly the sign of lawyer representing the claimant.