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Ensuring Swift Justice: The Evolving Landscape of Foreign Award Enforcement in UAE
Ensuring Swift Justice: The Evolving Landscape of Foreign Award Enforcement in UAE
Introduction:
In recent years, the United Arab Emirates (UAE) has witnessed significant progress in enforcing foreign awards within its jurisdiction. This article explores the legislative changes, court procedures, and grounds for refusal that define the current landscape of foreign award enforcement in the UAE.
Legislative Evolution: Streamlining the Enforcement Process:
The enforcement process for foreign awards underwent a pivotal change in 2018 with the Implementing Regulations of the Federal Civil Procedures Law No. 11/1992 issuance. This introduced a more efficient procedure, allowing applications for enforcement to be submitted directly to the execution judge, who was mandated to deliver a decision within three days. Subsequently, the Federal Civil Procedures Law No. 42/2022 repealed the old law but maintained the streamlined enforcement process, with the execution judge required to decide within five days. Two key conditions were established under Article 223 for the enforcement of foreign awards:
- The dispute should be arbitrable under UAE laws.
- The award should be enforceable in the country of its seat.
Harmony with International Standards: The New York Convention
The conditions outlined in Article 223 align with the principles of the New York Convention, to which the UAE became a member in 2006. The Convention allows competent courts to refuse enforcement if the subject matter of the dispute is not arbitrable under local laws and if the award is not enforceable in the country of its seat. While the New York Convention permits refusal only at the request of the party against whom enforcement is invoked, Article 223 empowers UAE courts to raise this ground independently.
Addressing Convention Conflicts: A Question of Precedence:
A potential conflict arises as Article 223 introduces a ground for refusal not explicitly covered by the New York Convention. However, Article 225 of the New CPL emphasizes that international treaties, including the New York Convention, precede enforcement-related provisions. Thus, the UAE's commitment to the Convention remains intact.
Grounds for Refusal:
The UAE courts, in their approach to enforcement, consistently adhere to the New York Convention, primarily utilizing Article V as the basis for refusal. Reciprocity, a requirement some member states enforce, is not applied by the UAE, fostering a more open environment for foreign awards. However, rare instances exist where the UAE courts declare a lack of jurisdiction for enforcement, specifically when the award debtor is not domiciled in the UAE and the dispute's origin has no connection to the country.
Critical Considerations: Signing of the Award and Representative Authority
Two critical grounds for refusal involve the signing of the award and the authority of the representative of a judicial person. The New York Convention, under Article V.2(b), cites public policy as a ground for refusal, with UAE courts interpreting the signing requirement expansively, necessitating signatures on both the last page and crucial sections of the award. Additionally, the authority of the representative in agreeing to arbitration is scrutinized, with courts demanding valid authorization for enforcement.
Evolving Jurisprudence:
Recent decisions reflect a shift in the UAE courts' stance towards arbitration, demonstrating a commitment to upholding arbitral awards rather than seeking reasons for refusal. The introduction of the Arbitration Law in 2018 further solidified the UAE's aspiration to be an arbitration-friendly jurisdiction.
Conclusion:
The UAE's journey towards becoming an arbitration hub is marked by legislative advancements and a proactive judicial approach. The streamlining of enforcement procedures and the commitment to international conventions signal a robust and consistent commitment to foreign award enforcement. As the UAE continues to make strides in international arbitration, practitioners are advised to stay vigilant, anticipating further positive developments in the enforcement landscape.
- The Convention allows competent courts to refuse enforcement if the subject matter of the dispute is not arbitrable under local laws and if the award is not enforceable in the country of its seat.
- Recent decisions reflect a shift in the UAE courts' stance towards arbitration, demonstrating a commitment to upholding arbitral awards rather than seeking reasons for refusal.
- The streamlining of enforcement procedures and the commitment to international conventions signal a robust and consistent commitment to foreign award enforcement.
