Wednesday, 13 March 2013

Enforcing DIFC Judgments in England and Vice-Versa

On 23 Jan 2013 Mr Justice Cooke, the judge in charge of the English Commercial Court, and Mr. Michael Hwang SC, Chief Justice of the DIFC Courts, signed a Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales copies of which are on the English Judiciary and DIFC Courts websites.

The DIFC Courts
Paragraph 5 of the memorandum describes the DIFC Courts as follows:
"The DIFC Courts form part of the legal system of the United Arab Emirates, albeit that this memorandum only states the position as it applies to the DIFC Courts. They deal with civil and commercial disputes which are connected to the Dubai International Financial Centre or in respect of which the parties have agreed that the DIFC Courts should have jurisdiction. The DIFC Courts consist of a Small Claims Tribunal (SCT), a Court of First Instance and a Court of Appeal. They were established by Dubai Laws 9 and 12 of 2004 and operate as a common law court, applying the highest international standards of legal procedure. The Courts’ judiciary is selected from common law jurisdictions around the world and from Dubai and enjoy the highest international renown."
I have already written quite extensively about the DIFC Courts. Readers are referred in particular to my article "DIFC Courts" 7 Jan 2011 on JD Supra and my posts "The Legal Order of the United Arab Emirates" 12 Nov 2011, "DIFC Court: Corinth Pipeworks SA v Barclays Bank Plc" 20 March 2011, "DIFC Courts' Jurisdiction: Corinth Pipeworks Appeal Allowed" 25 Feb 2012, "DIFC Courts Spread Their Wings" 7 Dec 2011 and "DIFC Choice of Jurisdiction Clauses" 28 Dec 2012 in this blog. 

The Commercial Court
Paragraph 4 describes the Commercial Court as
"a specialist court within the Queen’s Bench Division of the High Court of England and Wales. It deals with complex cases arising out of business and financial disputes, both national and international, which fall within its jurisdiction. It was established as a separate court within the Queen’s Bench Division by section 3 of the Administration of Justice Act 1970 (now section 6(1)(b) of the Senior Courts Act 1981), although a specialist Commercial List had operated since 1895 for the hearing of commercial cases, to which specifically designated judges with commercial experience were assigned. The Court is internationally recognised for its experience and expertise in commercial dispute resolution."
Readers who wish to know more about the Commercial Court and its practice are referred to the 9th edition of The Admiralty & Commercial Courts Guide.

Status of the Memorandum
The memorandum is not a treaty or legislation.and it makes clear that there is no treaty between the governments of the United Kingdom and the United Arab Emirates whereby British judgments may be enforced in the UAE or Emirates' judgments in the UK.    The memorandum has no legal effect, it is not binding on the judges of either party, it does not supersede any existing laws, judicial decisions or court rules, it is not intended to be exhaustive or to create or alter any existing legal rights or relations.   Its purpose is simply to set out the parties’ understanding of the procedures for the enforcement of money judgments of one party in the courts of the other.

How to enforce Judgments
In both legal systems, judgments of the other party may be enforced as a debt in accordance with the following principles.   It is important to stress that these principles are not confined to the parties' judgments.   They apply equally to the judgments of any foreign court where there is no treaty for the enforcement of judgments between the UK (or as the case may be UAE) and the foreign jurisdiction.

Where a foreign court of competent jurisdiction has determined that a certain sum is due from one person to another, a legal obligation arises on the debtor to pay that sum.  The judgment must be final and conclusive, though it may be subject to appeal.   A foreign court is considered to have competent jurisdiction where the judgment was against a person:
(a)   who was present within its jurisdiction when the action began;
(b)   started proceedings or counterclaimed in the foreign court;
(c)   submitted to the jurisdiction of the foreign court; or
(d)   agreed to submit to the jurisdiction of the foreign court before proceedings began.
There are, however, some foreign debts that cannot be enforced in this way such as taxes, fines and other penalties.

Procedure for enforcing a DIFC Judgment in England
Paragraph 21 of the memorandum provides that n order to enforce a judgment of the DIFC Courts in the Commercial Court, a party must issue a claim form in the Commercial Court, providing a concise statement of the nature of the claim and claiming the amount of the judgment debt. A certified copy of the judgment should be exhibited to the claim form.  A certified copy of a DIFC Court judgment may be obtained by making a without notice application to the DIFC Courts exhibiting a copy of the judgment which is to be certified. The certified copy will be endorsed by a certificate that it is a true copy, signed by a judge or registrar and sealed with the seal of the DIFC Courts.   In most cases a judgment creditor will be entitled to summary judgment under CPR Part 24 unless the debtor can persuade the court that the judgment was obtained by fraud, it was contrary to public policy; or the proceedings were conducted in a manner which the Commercial Court regards as contrary to the principles of natural justice.

Procedure for Enforcing an English Judgment in the DIFC
The DIFC procedure is very similar to that of the Commercial Court.   The Rules and forms of the DIFC Courts are very similar to the those of the English courts.   In particular, Part 24 of the of the Rules of the DIFC Courts  which provides for immediate judgment is similar to CPR Part 24.

Further Information
On 11 Feb 2013 I was invited to join 4-5 Gray's Inn Square which is one of the leading sets of the English bar with expertise not only in intellectual property but also arbitration and alternative dispute resolution, chancery, commercial, construction. tax and other areas of work that fall within the jurisdiction of the DIFC courts.   This connection should enable me to expand my practice in the Gulf and to facilitate a more comprehensive service to clients in that region.   Should anyone wish to discuss this article or any other legal matter connected with the Gulf he or she should call Stephen Broom on +44 (0)20 7404 5252 or use my contact form.   He or she can also follow me on Facebook, Linkedintwitter or Xing..