Recognition and Enforcement of Russian Court Decisions in the UAE: Challenges and Opportunities
With the active relocation of Russian citizens and businesses to the United Arab Emirates (UAE), as well as the country’s growing popularity as a hub for international investments, the recognition and enforcement of Russian court and arbitration decisions in the UAE has become increasingly relevant. The UAE has traditionally been considered a challenging jurisdiction for such purposes, as local courts have often taken a conservative stance, prioritizing the interests of the country’s residents. However, with the establishment of specialized financial zones such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), where courts operate under a common law framework, the situation has started to change. Nevertheless, the issue of recognizing and enforcing foreign decisions in the UAE remains unresolved, requiring careful consideration by creditors.
Features of the UAE Jurisdiction
A Unique Feature of the UAE Jurisdiction: Multiple Judicial Systems. The UAE jurisdiction is characterized by the presence of multiple judicial systems, which provides creditors with two main options for action:
- File a claim in the UAE federal courts – the process is governed by local procedural legislation.
- Submit an application to the DIFC or ADGM courts – the process will be regulated by common law principles.
Each of these options has its own features, advantages, and limitations.
I. UAE Federal Courts
- Conditions for Enforcing a Russian Court Judgment:
The judge responsible for enforcement proceedings will, within five days, verify that:
- The dispute did not fall under the exclusive jurisdiction of the UAE courts.
- The judgment was issued in accordance with applicable law and properly authenticated.
- The foreign court had jurisdiction under its national rules.
- All parties to the dispute were properly notified and represented in the proceedings.
- The judgment has become final and enforceable in the country where it was issued.
- The judgment does not contradict public policy, moral standards, or other decisions issued in the country where it was rendered.
- Challenges in Recognizing Foreign Decisions
One of the key challenges in the past was that if the defendant was a resident of the UAE, local courts considered themselves to have exclusive jurisdiction over the dispute, making it impossible to recognize and enforce foreign decisions. This is evidenced by a number of judicial precedents where, even in the presence of an arbitration clause in favor of a foreign court, the UAE courts refused to recognize decisions, citing their jurisdiction. However, in recent years, this issue has been partially resolved, and such refusals have become rare.
- The Requirement of Reciprocity
Nevertheless, this problem has been replaced by another, related to the requirement of reciprocity. According to UAE legislation, foreign court decisions can be recognized and enforced in the country provided that the state that issued the decision also recognizes UAE court decisions. This requirement has often been an obstacle for creditors, especially when dealing with countries with which the UAE does not have international agreements on the mutual recognition of court decisions. In the case of Russia, no such agreement exists, which complicates the process of recognizing Russian court decisions.
- Flexibility in Judicial Practice
At the same time, some experts note that the requirement of reciprocity is not absolute and can be interpreted flexibly by the courts. For example, in some cases, UAE courts have recognized foreign decisions even in the absence of proof of reciprocity, particularly if it served the interests of justice. However, judicial practice in this area remains inconsistent, and no unified approach to establishing the principle of reciprocity has been developed.
II. Alternative Jurisdictions
The courts of DIFC and ADGM operate under common law principles, making them attractive to parties seeking to enforce judgments within the UAE.
Unlike the UAE’s civil courts, these jurisdictions do not require the principle of reciprocity. This is particularly important for creditors from countries with similar legal systems, as it simplifies the procedure for recognizing and enforcing foreign judgments.
Additionally, the courts of DIFC and ADGM have established themselves as reliable and efficient platforms for dispute resolution, further enhancing trust in their decisions.
Advantages of DIFC and ADGM Courts for Recognition and Enforcement of Foreign Judgments:
- Common Law Principles:
Both courts operate based on the principles of common law, making them attractive to parties from countries with similar legal systems. - No Reciprocity Requirement:
Unlike the UAE’s civil courts, DIFC and ADGM do not require proof of reciprocity, simplifying the process of recognizing foreign judgments. - Reliability and Efficiency:
The courts of DIFC and ADGM have established themselves as reliable and efficient platforms for dispute resolution, enhancing trust in their decisions. - International Standards:
These jurisdictions adhere to international standards, making them appealing to international companies and creditors. - Streamlined Enforcement Process:
The enforcement procedures in DIFC and ADGM are more transparent and less time-consuming compared to the UAE’s civil courts.
Thus, despite certain improvements in legislation and judicial practice, the recognition and enforcement of foreign court and arbitration judgments in the UAE remains a complex process. Creditors must carefully prepare their evidence, including proof of reciprocity, and consider the specifics of the chosen judicial system. At the same time, the availability of alternative jurisdictions, such as DIFC and ADGM, provides additional opportunities to protect their interests and increases the chances of successful enforcement of judgments.