The enforcement of arbitral awards and foreign provisions within three days in United Arab Emirates

February 17, 2020

Article 85 of the Regulations of the Civil Procedures Law issued by Cabinet Resolution No. 57 of 2018 (“Regulation”) regarding the regulations of Federal Law No. (11) of 1992 regarding civil procedures, enumerates the procedures that the applicant shall take to enforce foreign provisions, orders and bonds within the state. In addition, Article 86 of the same Regulation stipulates that Article 85 applies to the enforcement of foreign arbitration awards that are intended to be implemented within the state. Likewise, Article 87 of the same Regulation stipulates that the Execution Judge shall be granted the competence to issue an order to execute attested documents and reconciliation reports ratified by the courts of a foreign country, according to the same procedures and conditions for the enforcement of foreign rulings and orders stipulated in Article 85 of the Regulation. Moreover, in order to discern the difference between the UAE Federal Civil Procedure Law before its amendments and after the new amendments stated in the regulation, through which it facilitate execution procedures; we shall firstly present the method of implementing judgments, orders, foreign arbitration awards, attested documents and reconciliation reports, which has been ratified by the foreign state courts according to the UAE Federal Civil Procedure Code before amending it. The Procedures of obtaining the Executory judgment in the UAE Federal Civil Procedure Law before amending it: The UAE Federal Civil Procedure Law previously required the claimant to file a lawsuit, in which the claimant shall request to enforce the provisions, orders, foreign arbitration awards, attested documents and reconciliation reports, which has been ratified by a foreign country court. However, in the event that a judgment has been issued by a court of first instance in favor of the claimant; the latter cannot initiate the execution procedures until and unless the judgment is considered definitive/final, either by the completion of the appeal deadline dates, or by adjudication of the appeal with a final judgment. Furthermore, in accordance with the provisions of the UAE Federal Civil Procedure Law, the judgment issued by the appeal court can be challenged by filing a cassation case before the cassation court. The aforementioned procedures used to consume a lot of time before the judiciary system/courts in order to enable the prevailing party to commence the execution procedures of any provisions, orders, foreign arbitration awards, attested documents and reconciliation reports, which has been ratified by a foreign country court. Procedures for obtaining the Executory Judgment in accordance with the Regulation after amendments: Nonetheless, after applying the amendment included in Article 85 of the Regulation, it has become smoother and easier to enforce provisions, orders, foreign arbitration awards, attested documents and reconciliation reports, which has been ratified by the courts in a foreign country. Accordingly, the applicant shall file an “order on a petition” case to the execution judge in accordance with the conditions stipulated in Article 16 of the Regulation, in which it stated that the “order on a petition” shall include the required data of filing a case. Subsequently, the execution judge shall issue the judgment within 3 days from the date of filing the “order on a […]

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Be aware: Defaulters in UAE may be pursued in India

February 17, 2020

In a historical development of India and UAE relationship, UAE Judgment will be recognized and enforceable in India based on reciprocity as per the Notification issued by the Government of India on 17 January 2020 (“Notification”). On 17 January 2020,  Government of India published in its official gazette Notification for recognition of the UAE as a ’Reciprocating Territory’ under  The Code of Civil Procedure of 1908 of India (5 of 1908) (“Indian CPC”) relative to the enforcement of UAE judgments by Indian Courts. Thus, a judgment passed by a ‘Superior Court’ of UAE can be directly enforced in India by filing a certified and legalized copy of the final and conclusive judgment. Background of the Notification India and UAE had entered into an Agreement on 25 October 1999 on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Commissions, Execution of Judgments and Arbitral Awards (“Agreement’). The Agreement so far only applied to service of summons, judicial documents or processes, recording of evidence by means of Letters of Request and / or commissions and execution of decrees and arbitral awards. On 29 May 2000, the instrument of ratification of the Agreement was exchanged and published in the Indian Gazette on 16 December 2000. However, until publication of the Notification in official gazette on 17 January 2020, India had only given effect to service of summons and other process under Section 29 (c) of the CPC. On 17 January 2020, the Ministry of Law and Justice of the Government of India issued a notification stating that: “In exercise of the powers conferred by Explanation 1 to Section 44A of the Code of Civil Procedure Code of 1908  (5 of 1908), the Central Government hereby declares , United Arab Emirates to be  a reciprocating territory for the purposes of the said section and the following Courts in United Arab Emirates shall be the superior Courts of that territory, namely:- Federal Courts: Federal Supreme Court Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah. Local Courts: Abu Dhabi Judicial Department; Dubai Courts; Ras Al Khaimah Judicial Department; Courts of Abu Dhabi Global Markets; Courts of Dubai International Financial Centre”. Reciprocity The Notification of 17 January 2020 is based on reciprocity. The judgment issued by foreign courts has no admissibility and hold no evidentiary value in Indian Courts, unless they are declared to be ‘Reciprocating Territories’ under Section 44 of Indian CPC. Section 44A of Indian CPC summarises the principle of reciprocity, i.e. execution in India of foreign decree passed by a foreign country (reciprocating) and the manner in which it is to be done. The said provision provides: “44A. Execution of Decrees passed by Courts in reciprocating territory— (1) Where a certified copy of a decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it has been passed by the District Court.  (2) Together with the certified copy of the decree, a certificate from such superior court shall […]

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Landlord and tenant’s agreement on the jurisdiction of the DIFC Courts with respect to the rental of real estate in Dubai contravenes public order

February 12, 2020

  The legal knowledge relating to real estate rent issues in Dubai is an important necessity that all landlords and tenants should be aware of. Especially when it is so easy for landlords and tenants to make mistake in concluding lease contracts. This article will focus particularly on the place of jurisdiction in the event of a dispute. It is necessary to distinguish between the jurisdiction of the Dubai Rental Disputes Center (Center) by considering the disputes arising between landlords and tenants in the emirate or in the free zones and the jurisdiction of the Dubai International Financial Center (DIFC) courts with real estate located in the spatial scope of the DIFC, we clarify this as follows: Article 1: Jurisdiction of the Rental Dispute Center: The Rental Disputes Center in Dubai specializes in all rental disputes in all areas in the Emirate except for disputes within areas that have special committees or competent courts. Article (3) of Law No. (26) of 2007 on regulating relationships between landlords and tenants in the Emirate of Dubai states that the law shall be applicable to leased properties in Dubai, including open and agricultural lands. This excludes hotels and free accommodation provided by natural or judicial persons to their employees. Article (6) of Decree No. (26) of 2013 Concerning the Rental Disputes Centre in the Emirate of Dubai states that: The Centre will have the exclusive jurisdiction to: 1) Determine all Rent Disputes that arise between landlords and tenants of real property situated in Dubai or in free zones, including counterclaims arising therefrom, as well as determine applications for interim or urgent relief filed by any of the parties to a lease contract; 2) Determine appeals from the decisions and judgments that are subject to appeal in accordance with the provisions of this Decree and the regulations and resolutions issued in pursuance thereof; and 3) Enforce the decisions and judgments issued by the Centre in the Rent Disputes that fall within its jurisdiction. The Centre will have no jurisdiction to hear the following Rent Disputes: 1) Rent Disputes that arise within the free zones which have tribunals or special courts having jurisdiction to determine the Rent Disputes that arise within their boundaries; 2) Rent Disputes that arise from a lease finance contract; and 3) Disputes that arise from long-term lease contracts covered by the above mentioned. The above mentioned points clarify that public order contravenes any agreement between the landlords and tenants on the jurisdiction of the DIFC courts to deal with rent disputes outside the scope of the DIFC. Article 2: Jurisdiction of DIFC Courts: The UAE legislator has exclusively defined in the Real Property Law the jurisdiction of the DIFC to hear all real estate disputes that are within the spatial scope of the DIFC. In other words, all real estate located within the spatial and geographical scope of the Dubai International Financial Centre shall have jurisdiction in that case exclusively to the courts of the DIFC. Whereas, by reviewing the Real Estate Property Law No. 10 of 2018 of the DIFC, we find that the issue of jurisdiction has been resolved […]

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Clarifications on the Protection Decree Concerning Domestic Violence

February 12, 2020

Morally and cognitively, developed societies strive to eliminate all kinds of crimes and excluding them from the circle of interactions between all groups of society, especially the family. The family is the fundamental core of all peoples; it may be basis of growth and progress and may be the basis of decline and devastation. Therefore, the issuance of special legislation to protect the family is a very essential matter stemming from the deterrence and protection dualism. Accordingly, on 29 August 2019, the President of the United Arab Emirates issued Federal Law No. (10) of the Year 2019 concerning Protection Against Domestic Violence (hereinafter, the “Law”). The Law will come into effect from the date to be determined by the UAE Council of Ministers’ decision. The Law contains 13 articles that includes the Law’s objetives, the concept of violence,  penalties, and settlements. The provisions of the Law shall apply to domestic violence crimes committed by a family member against another member of his family, whether he is from the immediate or branch or relatives by lineage or marriage to the fourth degree, or from persons covered by alternative family custody. This Law has been issued to protect the family and deter all harmful practices against the family that affects the physical state, integrity and mental health of the family, women, and children. Violence is not only physical The Law not only criminalizes physical violence, but also has set out three other categories that have been added to physical violence, namely: psychological, sexual and economic abuse. The link between these three types is the consequence and effect of violent action, which results in moral, physical, material or sexual harm. Any of these causes a person to feel unsafe and insecure and his/ her psychological and mental state exposed to constant danger. The Role of the Public Prosecution The Law gave the Public Prosecution the power to issue a protection order on its own or based on the victim’s request to deter violent action and protect the victim’s body, well-being and economic status. The Law has provided protection measures to be issued by the Public Prosecution when needed such as preventing approach or entry to the places designated for victim’s protection or any places mentioned in the protection order that has specified for a minimum of thirty days and a maximum of sixty days. Penalty or Conciliation The provisions of the Law covers the principle of punishment for the commission of the criminal offense and the principle of tolerance and reconciliation to allow family members to restore their relationship. The penalty in this Law ranged from imprisonment for a period of three to six months and a fine between 1,000 and 10,000 AED, if the offender violated the protection order issued by the Public Prosecution, or if it commits any of the criminal acts stipulated in the decree. The Law also referred to the provisions of UAE Penal Code of 1987, and doubled the penalty if the offender repeated an act of family violence within one year. As for conciliation, the Law referred to the provisions of the Criminal Procedure Law No. 35 […]

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Law No. (2) of 2019 Amending Some Provisions of Law No. (21) of 2015 Concerning Judicial Fees in Dubai Courts

February 12, 2020

  His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister, in his capacity as Ruler of Dubai, has issued an amendment to Law No. 21 of 2015 regarding the new fees of the Dubai Courts. The amendment replaced the provisions of Articles (8), (14) and (35) with provisions relating to non-payment of fees, the estimated value of the case, and the relative fees for implementation. The revisions include: Not subject to fees: According to the amended Article (8), certain categories, such as, claims, appeals and applications are not subject to the fees initially prescribed by the original law. As such, claims, appeals or applications filed by federal or local governmental authorities in any of the emirates of the country, or claims related to endowments, donations and wills for charitable works, and charitable associations, or claims filed by shareholders against the Board of Directors of a public shareholding company or its executive management –  whenever the percentage of the company’s claimants’ share does not exceed (10%) of its total shares, are not subject to fees. Furthermore, the fees prescribed by the original law shall not be subject to appeals against alimony judgments, deposit by Trustee in Bankruptcy, bidder’s deposit of the price of the property, and what the federal and local governmental authorities deposit on behalf of the concerned parties. Applications for publicity or proof of Islam, ratification of a social welfare application, and requests for death and heredity are also not subject to fees. Estimated Value According to the amended Article (14), claims filed before the courts of first instance, civil suits of a criminal case and claims arising out of commercial business of more than 500,000 dirhams, excluding personal status lawsuits, shall be charged a fee of (6%) of the claim value. The amount of this fee shall be from a minimum of AED500 but not more than AED20,000 if the claim value does not exceed AED500,000; AED30,000  if the claim value ranges between AED500,001 to AED1,000,000; and AED40,000 if the claim value is over AED1,000,000. The same article stipulates that the lawsuits arising from commercial business brought before the courts of first instance which are worth AED500,000 or less shall be charged 6% of the claim value provided that the amount of this fee shall not be less than AED500 and not more than AED20,000, and this fee of (6%) of the claim value shall be collected from the claimant upon registering the claim. The amount of this fee shall not be less than AED 500 and not more than AED5000. This amendment is in favor of claimants who filed a commercial lawsuit with a claim of less than AED500,000, to pay court fees upon filing a suit with a maximum of AED5,000 instead of AED20,000, as provided for under the original law prior to this amendment. In addition, it has been stipulated in this Article that this fee paid by the claimant shall be added to the expenses of the adjudged lawsuit and shall be collected from the convicted person by a final judgment. This is equivalent to 6% of the value of the […]

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Tourism Boost: The New Five-Year Multiple-Entry Tourist Visa

January 23, 2020

This month, the UAE Cabinet approved the issuance of a five-year, multiple entry tourist visa for all nationalities visiting the country. This move aims to enhance the UAE’s position as a top tourist destination and further strategically supports the Dubai Expo 2020 efforts. Holders of the five-year multiple entry tourist visa shall be allowed to stay in the UAE for a period of six (6) months on each visit . This is a welcome development for tourists, visitors and UAE residents who now have the option to apply for a tourist visa once and may re-enter on the same visa. Currently,  tourists can visit with a single entry for 30 days or multiple entry for 90, from the date of the entry. Such enhancement shall increase the number of business visitors, family visitors of residents and those who decide to visit the UAE on short notice from countries where potential visitors may have had to re-apply for a new tourist visa. The details behind the five-year, multiple entry tourist visa shall be introduced to the people within the next four months. While eligibility and terms and conditions are said to remain the same as those in place for other tourist visa types, the UAE’s Federal Authority for Identity and Citizenship has been tasked by the UAE Cabinet with implementing the new decision. The announcement was well-received by UAE’s business community who anticipate sustainable growth arising from a continuous inflow of tourists to the UAE who shall spend on the local economy from retail through hospitality thereby providing added lift to the real estate, transportation, tourism and entertainment sectors. We at Al Suwaidi & Company shall continue to monitor the developments, implementing rules and further details surrounding this important decision that will surely support the achievement of the UAE’s goal to welcome more tourists into the country for this year and further into this decade. If you have any questions related to this, please reach out to Vida Grace at  vida@alsuwaidi.ae

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Ensuring Validity of Arbitration Agreements in the UAE

January 21, 2020

Recognizing the importance and the growing preference for arbitration as a form of dispute resolution, UAE authorities promulgated Federal Law No. (6) of 2018, otherwise known as the UAE Arbitration Law. This law repealed Articles 203 to 218 of Federal Law No. (11) of 1992 or the UAE Code of Civil Procedures and further has provided better guidance for arbitration in the UAE. Unlike the more traditional forms of dispute resolution, Arbitration allows the parties to confer jurisdiction on settlement of their disputes to an arbitral tribunal, and in the process, take away the jurisdiction from the regular courts. As an extraordinary remedy, the choice of arbitration has not always been given efficacy in the past due to various reasons. The most notable of which are (1) the dispute concerns a matter of public policy, (2) the lack of capacity of the signatory, and (3) a defective arbitration agreement. It is also interesting to note that, in the past, not being able to plead the existence of an arbitration clause at the first hearing is treated by the Courts as waiver of the arbitration agreement. An arbitration agreement is defined in Article 1 of the UAE Arbitration Law as the agreement of the parties to refer a matter to arbitration, whether such agreement is made before or after the dispute arises [should this be in quotes?] It can be contained in a particular contract in respect of all or some disputes that may arise between the parties, by separate agreement, or through an explicit referral considering such clause as a part of the contract [what is an explicit referral?]. Since arbitration as a choice of dispute resolution is agreed by both parties consent, an arbitration agreement can be entered into even after a dispute arises and even if a claim is already before the courts. In order to give effect to the choice of arbitration as alternative dispute resolution, the following points should be considered in entering into an arbitration agreement: The dispute should be a matter where composition or settlement is allowed, and Article 4(2) of the UAE Arbitration Law stipulates that arbitration will not be permitted on matters that are non-conciliatory. Thus, issues concerning public policy cannot be submitted for arbitration. For example, employment issues and criminal matters are not arbitrable. The arbitration agreement should be entered into by a natural person only who enjoys the capacity to dispose of rights or the representative of a juristic person authorized to agree on arbitration. [what is a non-natural person? Perhaps clarify this] There are two aspects of capacity contemplated in this requirement of the law. First, the person signing must have the capacity to contract based on the law governing such person’s capacity. For example, in the UAE, the capacity to contract without need of guardian or court order for locals is when they reached the age of 21 (lunar years). Hence, an Emirati below the age of 21, by himself, does not have the capacity to sign an arbitration agreement. If the party entering into the arbitration agreement is from the United Kingdom, UK laws will determine whether […]

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Chambers Litigation 2019 Second Edition Guide.

January 12, 2020

Chambers and Partners Litigation Chapter 2019

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Economic Substance Regulation of UAE

January 8, 2020

INTRODUCTION AND BACKGROUND H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has promulgated the Resolution of the Cabinet of Ministers No. (31) for 2019 concerning Economic Substance Regulations (ESR/Regulations) on 30 April 2019. Pursuant to the Regulations,  a Ministerial Decision no. 215  of 2019 on the Issuance of Directives for the Implementation on the Provisions of Cabinet Decision no. 31 of 2019 Concerning Economic Substance Requirements was issued on 11 September 2019 as a guidance ( Guidance) on how the Economic Substance can be applied and how the Economic Substance Test may be met for the purpose of complying with the ESR . The Economic Substance Regulations shall apply to UAE onshore, Free Zone and offshore companies that operate and generate income from the “Relevant Activities”. WHAT IS ECONOMIC SUBSTANCE REGULATION (ESR)? Background of the ESR: On 1 December 1997, the European Union (EU) adopted a resolution on a code of conduct for business taxation with the objective to curb harmful tax competition.  Shortly thereafter, the Code of Conduct Group on Business Taxation (COCG) was set up to assess tax measures and regimes that may fall within the scope of the Code of Conduct on Business Taxation. On 5 December 2017, the COCG published the (first) EU list of non-cooperative jurisdictions for tax purposes, in cooperation with the Economic and Financial Affairs Council (ECOFIN). Recently, the world economy has been characterized by a shift from country-specific businesses to global enterprises operating both over the internet and at locations remote from where their physical customers are buying goods and services on online. This has presented opportunities for complex profit repatriation structures – reducing the tax burden in other words – and has fuelled concerns of unfair and unethical practice. As such, EU formalize and applies three listing criteria, which are aligned with international standards and reflect the good governance standards that the Member States comply with themselves: Transparency: Jurisdictions should comply with the international standards on exchange of information, automatic and on request. In addition, jurisdictions should sign the OECD’s (The Organization for Economic Cooperation and Development) multilateral convention or signed bilateral agreements with all EU Member States to facilitate such exchange. Fair Tax Competition: Jurisdictions should not have harmful tax regimes nor facilitate offshore structures which attract profits without real economic activity. BEPS Implementation: Jurisdictions should commit to implementing the OECD’s Base Erosion and Profit Shifting (BEPS) minimum standards, starting with Country-by-Country Reporting The common denominator for the Economic Substance systems is The Organization for Economic Cooperation and Development (OECD) Forum on Harmful Tax Practices (FHTP), which sets the global standard that requires companies to have substantial activities in a jurisdiction (known as “Economic Substance”). OECD is a unique forum where the governments of 36 member states with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development.  Over 125 jurisdictions around the world are members of the OECD BEPS Inclusive Framework. The FHTP is a sub-body of the Inclusive Framework and is responsible for assessing […]

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Insolvency law: The objectives and the mechanisms

December 17, 2019

Insolvency Law No. 9 of 2019 enters into force from January 2020, which is the year of economic and social betting on development and aspiration for a happier and more stable country. What is the role of the insolvency law in this context? Contrary to the federal bankruptcy law, the insolvency law includes civilians who are not merchants whose financial difficulties have prevented them from paying their debts and discharging their financial receivables – the insolvency law has set out clear and easy-to-apply rules for collecting bad debts and rehabilitating the financial position of the debtor, which increases the credibility of creditor banks in loaning individuals, and encourages. According to the third article of the insolvency law, which requires commencement of procedures, the debtor shall submit to the court an application without contesting anyone in it, to settle his/her financial obligations, provided that the required documents are attached to the application. Protective and penal measures Opening insolvency proceedings, does stop the claims? The law stipulated that during the insolvency and liquidation procedures, it is not permissible to initiate or pursue any lawsuits or take legal or judicial measures against the debtor, as the issuance of the decision to open the insolvency and liquidation procedures entails stopping the entitlement of legal or contractual benefits to the debtor, including the interest due, or compensation due for late payment, and the cessation of any judicial action against any person who granted a personal guarantee to the debtor, or transferred his/her money as a guarantee of the debtor’s obligations, pending the issuance of a judgment to liquidate the debtor’s money, within the limits of that guarantee. Penal procedures If the court decides to initiate procedures for settling financial obligations, or commences insolvency and liquidation procedures, it orders, on its own initiative or at the request of the debtor, to suspend any penal procedures if they arise from cases of issuing a check without balance for checks issued by the debtor before requesting the commencement of procedures settlement of financial obligations, or prior to the request to open insolvency procedures and liquidation of funds. Measures against the debtor and penalties against the creditor The law has been misled by the debtor, with the intent to harm the insolvency and liquidation procedures, in a way that prevents the secretary appointed by the court from performing his duties in accordance with the provisions of this law. In the event that it becomes apparent to the court after the debtor’s insolvency decision and the liquidation of his/her funds, that any debtor’s money has not been disclosed, then it may include that money in the debtor’s liquidated funds, then the court may take the necessary measures against the debtor if he/she commits any of the acts or the following actions: fleeing outside the country to avoid or postpone the payment of any of its debts, avoid, postpone, disable the insolvency procedures or liquidate his/her funds,  dispose of any of his/her funds with the aim of preventing the Secretary from possessing it or delaying possession thereof, as well as hiding or destroying any of his/her funds, documents or other relevant information […]

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