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A Reinstatement of the UAE Judicial Proceedings: Key Changes to the UAE’s Civil Procedures Code

10.09.2019

Mahmoud El-Sayed

Mahmoud El-Sayed Senior Associate

In December 2018, the UAE Cabinet approved Resolution number 57 of 2018 (the “Executive Regulations”) which issued the executive regulations to the UAE’s Federal Civil Procedures Law number 11 of 1992 (the “CPC”). We highlight below some of the key amendments in the CPC which are aimed at modernizing the UAE courts’ procedures to align them with contemporary technological advances and economic circumstances and to promote more efficient, flexible structures that facilitate administration of justice in the UAE.

First and foremost, at the stage of service of case summons to litigants, the Executive Regulations has encompassed the modern means of communications envisaged by the Electronic Transactions laws. Under the CPC, the only method of serving case summons was through the court bailiff, by email or by fax. The Executive Regulations provides that pending the judge’s approval, litigants are now able to notify their opponents themselves through recorded voice or video calls, mobile SMS and similar means. We expect that this amendment will greatly benefit foreign companies and persons who wish to bring a case against a UAE establishment or resident.

The Executive Regulations have expanded the scope of matters that can be adjudged as preliminary matters before the merits are considered. In particular, the functions of the Case Management Office have been clarified, who will now supervise the claim filing process and exchange of documents and the court will only consider the matters when sufficient evidence is presented to form the court’s opinion. Further, if litigants submit statements to the Case Management Office containing a plea contesting the court’s jurisdiction to consider the case, the Case Management Office has the competence to transfer the case to the newly established “consultation room” to adjudicate on such plea before considering the merits of the case. We expect that this will ensure that preliminary matters are dealt with expeditiously.

The Executive Regulations have expanded the range of cases that will be dealt with by a newly created Summary Chambers, which will adjudicate on these cases in a single hearing. The Summary Chambers will be used to deal with claims that meet the following criteria:

A.    Civil, commercial and labour monetary claims where the claim amount does not exceed AED 100,000.

B.    Cases related to verification of signature authenticity, whatever their value.

C.    Cases relating to a claim for wages, salaries and the like where the claimed amount does not exceed AED200,000.

A judgment issued by the Summary Chambers on any of the cases falling under A-C can be appealed to the first instance court within 15 days from date of issuance of the judgment. However, it should be noted that judgments issued by the Summary Chambers are final and not subject to appeal if the value of the claim does not exceed AED 20,000 for labour disputes and AED 50,000 for all other claims.

We expect that the Summary Chambers’ procedures will be particularly beneficial to low value labour disputes and small business owner’s claims.

The Executive Regulations have clarified the legislative framework governing debt recovery, providing creditors with greater possibilities to enforce their debts. While the payment order option was recognized under the CPC, it was barely used because it was limited to contractual claims under financial instruments and commercial papers. Under the Executive Regulations, payment orders can now be sought where the claim is based on commercial agreement. Further, the creditor can now claim, by way an application for payment order, the interests together with the original debt. A creditor is required to first make a demand of payment to the debtor before submitting an application for a payment order. If the demand for payment is not satisfied, the creditor shall submit a petition to the court, and a judge can issue a payment order at his sole discretion. Therefore, creditors are no longer required to file a substantive claim to prove that a debt is due. Once the judge issues a payment order, it should then be taken to the Execution Court.

Further, the Executive Regulations enhance the process for enforcement of foreign judgments and foreign arbitral awards. Under the new legislative regime, an application to enforce and recognize a foreign judgment and foreign arbitral award can be made via a petition to the execution judge, which means that the enforcement process which meets the criteria will be determined on an expedited basis. This is a step forward from the old regime which required such application to take the form of a substantive case.

The Executive Regulations is a positive development that streamlines the litigation procedures and expedites the determination of small claims. In particular, the amendments in the Executive Regulations in relation to debt recovery and enforcement of foreign judgments should boost business confidence and encourage creditors to rely on a more cost and time efficient judicial system. Since the Executive Regulations provides a comprehensive legal framework which seems to have reinstated many articles in the CPC, it remains to be seen how the Executive Regulations will co-exist and operate with the core framework of the CPC.

Article authors:

Mahmoud El-Sayed