The 1999 Treaty
In 1999, the UAE and India entered into a bilateral treaty for judicial cooperation and mutual recognition and enforcement of judgments (the 1999 Treaty).1 The 1999 Treaty was an agreement to make legal processes, such as the service of judicial documents and summons and enforcement of civil court judgments, more streamlined between the two countries.
Despite the 1999 Treaty, the streamlined processes agreed were never fully implemented. Parties seeking to enforce their UAE court judgment in India often were required to commence fresh proceedings and obtain a new civil judgment from the Indian courts. UAE judgment creditors found the process of enforcement in India time-consuming and expensive. These difficulties led to debtors considering India a ‘safe haven’ for their assets and left many UAE creditors frustrated and out of pocket.
The 2020 Declaration
Under the Indian Civil Procedure Code,2 foreign judgments from courts of reciprocating territories can be directly enforceable as if they are Indian court judgments. The 2020 Declaration declares the UAE a “reciprocating territory”, and the UAE courts3 “superior courts” for the purposes of the Indian Civil Procedure Code. This now means that a UAE court judgment can be immediately enforced in the Indian courts without the need to obtain a new civil judgment from the Indian courts. In short, the 2020 Declaration implements the streamlined enforcement processes agreed by the UAE and India in the 1999 Treaty.
What does this mean for the enforcement of Indian judgments in the UAE?
Similarly, under the UAE Civil Procedure Code,4 foreign court judgments can be enforced by parties in the UAE courts if the originating foreign court also enforces UAE court judgments (i.e., there is “reciprocation of judgment enforcement”). Given the 2020 Declaration, and the fact Indian courts should now enforce UAE court judgments under the streamlined processes, parties can now provide evidence to the UAE courts that there is “reciprocation of judgment enforcement”, meaning that the parties should be permitted to enforce Indian court judgments in the UAE via the UAE enforcement courts.
Why is this important to the UAE and India and the business community?
The trade ties between the UAE and India are significant, with the two nations setting a trade target of US$100 billion for 2020. India is also the second largest trade partner of the UAE.5 Given the scale of trade between the two nations, the implementation of effective and efficient cross-border enforcement mechanisms will no doubt improve business confidence and lead to ever-greater trade ties in business and in law.
This significant development will also be welcome news for UAE creditors and banks who have been historically frustrated by debtors who have sought to hide themselves and their assets in India. The 2020 Declaration also acts retrospectively, so any judgment creditor who has not yet sought to enforce their UAE court judgment in India may now have a better chance of successfully doing so. It will be interesting to see how this development is practically implemented by the Indian courts and, in turn, by the UAE courts.
- Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Judicial Commissions, Execution of Judgments and Arbitral Awards, 25 October 1999.
- See section 44A of the Indian Civil Procedure Code, 1908.
- “UAE courts” includes the UAE Supreme Court, UAE federal courts, courts of the Emirates, the DIFC Courts and the ADGM Courts.
- See Cabinet Decision No. 57 of 2019 on the UAE Civil Procedure Code, 1992.
- khaleejtimes.com
Client Alert 2020-027
