Our recent blog discussing the role of the New York Convention in the recognition of “foreign” arbitral awards addressed the UK’s highest court’s treatment of the issues. In another recent decision, a court in the UAE addressed the issue of recognition and enforcement of “foreign” judicial judgments (rather than arbitral awards). We can’t find an English translation of the decision, but we have the decision in Arabic, and the reports of the decision (e.g., Mondaq, 12 Nov. 2010) suggest that the decision warrants consideration.

There is a common belief that judicial attitudes to enforcement of “foreign” judicial judgments is significantly different from enforcement of “foreign” arbitral awards.  In fact what might be accounting for at least some of the the differences seen in enforcement of arbitral awards vs court-entered judgments is attitudes towards the U.S. and reciprocity.  What follows is noteworthy because the U.S. was not involved.

The Creditor in the case secured a judicial (rather than an arbitral) award against the Debtor, a UAE company, from a court of first instance in France. The judgment was upheld by the French Court of Appeal and Cassation (the highest court for such purposes in France). The Creditor then tried to enforce the judgment in the UAE.

The UAE Court, the Federal Cassation Court, interpreted and applied Article 173(1) of the UAE Civil Procedure Law, which lists six broad and general grounds for avoiding enforcement of a “foreign” judgment.  Grounds for avoidance include if the “judgment objected to is based on a breach of the law or incorrect application or interpretation of the law”, or if the judgment “was issued contrary to the rules of jurisdiction”, or if the “judgment pronounces on matters not requested by the adversaries or on more than they had requested”.

Notwithstanding these broad principles, the UAE court held:

  1. The procedures to be followed by the creditor must be in accordance with the laws of the state where the action is brought, the proceedings are conducted, and the judgment is rendered. The only exception noted was where the application of those procedures was contrary to public policy of any other state where the proceedings are to be cited as evidence.
  2. Judicial decisions of one jurisdiction would be recognized and may be declared enforceable if, among other things, the decision is final and binding in the state of origin; if the party against whom enforcement is sought was duly summoned in the first jurisdiction; no other proceedings are then pending between the parties; and that the procedure securing the enforcement shall be that of the UAE but that the UAE court should not consider the merits of the decision.
  3. In language of note, the UAE court stated that territorial sovereignty, interdependence, and globalization have necessitated the recognition and enforcement of “foreign” decisions by States. Without such recognition, an interested party would have to bring proceedings in each country where his claim is to be asserted which action would be onerous, resulting in additional time and costs and “could result in multiple conflicting decisions”.
  4. The court also observed that “reciprocity” was also a basis for the recognition of such judgments even in the absence of an international agreement or convention.

The UAE court upheld the French judgment.