DIFC COURTS: A GATEWAY FOR ENFORCING FOREIGN JUDGEMENTS IN DUBAI

Posted May 23, 2016

The Dubai International Finance Centre (“DIFC”) court has recently issued a decision which could allow the holder of a foreign judgement to seek enforcement in Dubai.

In the case of DNB Bank ASA v. Gulf Eyadah Corporation (CA 007/2015), the claimant sought to enforce an English court judgment against two companies in Dubai using the DIFC courts. The DIFC Court of Appeal ruled that it had wide powers to enforce foreign judgements, even where the matter had no connection to the DIFC. In this case, the foreign judgment was recognised by the DIFC court as a judgement of the DIFC court. The DIFC courts have entered into a Protocol of Enforcement with the “onshore” Dubai courts (“Protocol”). Briefly, the Protocol provides that a judgement of a DIFC court will be recognised by the “onshore” Dubai courts without further review of the merits of the case. This being the case it is possible to seek enforcement of a judgement which is recognised by the DIFC courts, by relying on the Protocol. It will be appreciated that this procedure significantly impacts on the ability to practically obtain the fruits of a foreign judgement.

In reaching this decision, the DIFC court also relied on the Memorandum of Guidance as to Enforcement between the DIFC courts and the Commercial Court, Queen’s Bench Division, England and Wales (“English MOG”), which sets out the parties’ understanding of the procedures for the enforcement of each party’s money judgments in the other party’s courts. The DIFC court observed that although the English MOG is not binding on the DIFC court, it acts as a starting point to guide the DIFC court in the recognition and enforcement of a judgment issued by the Commercial Court. The DIFC Court of Appeal also implicitly observed that the English MOG merely reiterates common law requirements for enforcement of any foreign judgement.

It should be noted that the DIFC courts have entered into Memorandums of Guidance, similar to the English MOG, for enforcement of money judgements with the Supreme Court of Korea, the Supreme Court of Kazakhstan, the United States District Court for the Southern District of New York, the Supreme Court of Singapore, the High Court of Kenya (Commercial & Admiralty Division), the Federal Court of Australia, and the Supreme Court of New South Wales.

If this case succeeds at the Dubai courts, it would demonstrate that a foreign judgement can be enforced via the DIFC court as a “conduit” jurisdiction, using the reciprocal enforcement mechanism between the DIFC courts and the Dubai courts. It will therefore be exceedingly difficult for a debtor with assets in Dubai, to frustrate a judgement creditor who is holding a foreign judgement. This is a positive development as it will enhance international trade by giving certainty for enforcement of foreign judgements. In particular, the position of a party holding a judgement of a court which has entered into a Memorandum of Guidance with the DIFC courts will be further enhanced.