The ADGM courts adopt memorandum of understanding on enforcement of awards with UAE MoJ

In another push to expand the area of free movement of onshore and offshore ratified awards, the Abu Dhabi Global Market (ADGM) courts have recently entered into a memorandum of understanding with the Ministry of Justice of the United Arab Emirates (see Memorandum of Understanding between Ministry of Justice United Arab Emirates and Abu Dhabi Global Market Courts Concerning the Reciprocal Enforcement of Judgments, dated 4 November 2019). Following its adoption on 4 November 2019, the MoU entered into force with immediate effect (see clause 19).

It follows the adoption of the related MoU on judicial co-operation between the UAE Ministry of Justice and the ADGM courts (see Memorandum of Understanding between Ministry of Justice and Abu Dhabi Global Market Courts concerning cooperation in legal and judicial matters, dated 15 May 2016), which has for one of its main objectives the pursuit of the reciprocal recognition and enforcement of arbitral awards between the federal and the ADGM courts and vice versa (see clause 3(4) read together with clauses 3(3) and 2(5) of this latter).

The MoU is closely aligned with and, as such, modeled on the wording of two previous memoranda that were adopted with corresponding objectives in mind: the MoU between the ADGM courts and the Abu Dhabi Judicial Department of 16 April 2016 on the one hand (see here for my previous reporting) and the MoU between the ADGM courts and the Ras Al Khaimah courts of 5 May 2019 on the other (see here for my previous reporting). Both deal with the onshore/offshore recognition and enforcement of judicial instruments, including ratified awards, between the respectively designated courts, proscribing any review on the merits of the instrument of which recognition and enforcement is being sought before the enforcing court. Taken together, these MoUs strive for the judicial integration between onshore and offshore by establishing a UAE-wide regime of mutual recognition and enforcement of judicial instruments, including ratified awards.

Importantly, the MoU extends to the federal UAE courts, that is, those courts that form part of the federal UAE court system, in other words the courts of the Emirates of Sharjah, Ajman, Umm Al Quwain and Fujairah (see clause 2). This means that, taking account of the number of onshore courts that have now entered into an MoU with the ADGM courts for creating a pan-UAE area of free movement, only the Dubai courts, including their free zone brethren, the Dubai International Financial Centre (DIFC) courts, stay marginalised. It also means that the Dubai courts will have to rely on the terms of UAE Federal Law No. 11 of 1973 (regulating judicial relations between the UAE courts) for want of a better suited and more avant garde instrument to assist in the enforcement of an onshore Dubai or offshore DIFC award in the ADGM, or vice versa.

The reference in the title of the MoU to “reciprocal” recognition and enforcement is a misnomer of sorts. This is owing to the ambition of the MoU to create a regime for mutual recognition and enforcement that dispenses with a substantive review by the enforcing court of the instrument presented for enforcement, in other words, that requires enforcement “without re-examining the substance of the dispute on which [the instrument] has been issued” (see clause 2). In this sense, the MoU expressly prohibits a re-examination on the merits by the other court of awards ratified by the federal courts (see clause 10), or of awards ratified by the ADGM courts (see clause 15), as the case may be.

This approach is also confirmed by the definition of arbitral awards under the MoU, according to which “[a] ratified or recognised arbitral award by the Federal Courts or the ADGM Courts has the same force as a judgment of either of the courts and therefore does not require any further ratification or recognition by the other court” (see clause 5(a)(ii)), thus proscribing any form of double exequatur. Following the regime introduced by the previous two MoUs, in order to qualify for mutual recognition and enforcement without a second look by the enforcing court, the ratified arbitral award presented for enforcement must be accompanied by an official translation into the working language of the enforcing court, that is, English in the case of the ADGM (clause 7(b)) and Arabic in the case of the federal courts (clause 12(b)). The ratified arbitral award presented for enforcement also must bear the following executory formula (clauses 7(a) and 12(a)):

“The authorities and competent bodies must proceed to execute this instrument and to carry out the requirements thereof, and they must give assistance in the execution thereof even by force if so requested.”

In order to ensure the seamless operation of the MoU in practice, each of the federal and the ADGM courts is required to assign officers to assist award creditors whose ratified awards have been referred to the respectively other court for enforcement (clause 16(a)(ii)), and to ensure that there is no duplication in court actions between the on- and offshore courts (clause 16(a)(i)).

Taken in the round, this latest MoU promotes the establishment of a pan-UAE regime of mutual recognition and enforcement of ratified awards between the onshore UAE and the offshore ADGM courts. Once perfected, this regime will lead to the full judicial integration of the civil law courts in mainland UAE and the ADGM free zone courts. From a comparative law perspective, the adoption of these MoUs unleash integrational forces that will consolidate the systemic interaction between the civil and common law traditions in everyday legal practice, and in particular in the enforcement of domestic onshore and offshore awards.

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