Execution Of United Arab Emirates Decrees In India

• Published date: 08 July 2020
• Subject Matter: Government, Public Sector, Inward/ Foreign Investment, Constitutional & Administrative Law
• Law Firm: RPV Legal
• Author: Mr Shashank Verma, Ronak Arora and Mahima Verma

The Ministry of Law and Justice, Government of India, notified United Arab Emirates ('UAE') as a 'Reciprocating Territory' under Section 44A of the Code of Civil Procedure 1908 ('CPC'), enabling execution/enforcement of a UAE judgment or a Decree in India.. The Notification dated 17.01.2020 ('Notification') issued by the Government has recognised certain federal and local courts of UAE as 'superior courts' for the purposes of Section 44A and the decree passed by such courts may now be directly executed in India.

BACKGROUND

UAE and India have been sharing good trade relations for a very long time. India is the third-largest investor in UAE ¹ and UAE is the 9th biggest investor in India in terms of Foreign Direct Investment.² In such a scenario, commercial disputes are often inevitable amongst the business parties involved in the overseas trade between India and UAE. To honour this flourishing business relation and for judicial cooperation in civil and commercial matters between the countries, on October 1999 India and UAE entered into an Agreement called 'Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Commissions Execution of Judgements and Arbitral Awards' ('Agreement')³.

Although the Agreement was to provide mutual legal assistance interalia, for execution of decrees, settlements and arbitral awards, the Government of India had not recognized UAE as a 'reciprocating territory' for the purpose of Section 44A of CPC- which is the governing law in India with regard to recognition and enforcement of decrees passed by foreign courts provides that any such Decree passed by a foreign court may be executed in India, as if it has been passed by Indian courts; provided, the Central Government of India notifies such country as a 'reciprocating territory'. Thus, despite the aforesaid Agreement, decree passed by the UAE Courts were not executable in India for not being from a reciprocating territory.

EXECUTION OF DECREES PASSED BY UAE COURTS

Prior to the Notification, in order to enforce a Decree passed by the UAE Courts, the Decree-Holder was required to file a fresh suit on the basis of the Decree (passed by the UAE court) before the Indian court of competent jurisdiction. The fresh suit could be based on the Foreign Decree or the original cause of action, or both.

However, by notifying UAE as a 'Reciprocating Territory' and by defining which courts of UAE shall be treated as 'superior courts' for the purpose of Section 44A of the CPC, a Decree Holder can straightway apply for execution of said Decree before the Indian courts.

Following courts have been declared as 'superior courts' by the Notification -

1. Federal Court-
   
   1. Federal Supreme Court;
   2. Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah;
2. Local Courts-
   
   1. Abu Dhabi Judicial Department;
   2. Dubai Courts;
   3. Ras Al Khaimah Judicial Department;
   4. Courts of Abu Dhabi Global Markets;
   5. Courts of Dubai International Financial Centre.

With this Notification, now any Decree passed by the 'superior courts' (mentioned above) of UAE are executable in India as if the Decree was pronounced by an Indian court of competent jurisdiction and the Decree Holder will not be required to institute a fresh suit in India for the same relief, as was the case in the Pre-Notification era. Nevertheless, the Decree Holder is required to file an Application for execution of the Decree in a court within the local limits of which the Judgment...