Understanding the Execution Process in the UAE

A Comprehensive Guide to Enforcement of a Judgment

When it comes to the legal realm, the execution process in the UAE stands out as one of the most meticulous and comprehensive process. For those unfamiliar with this essential legal journey, it signifies the crucial stages after a court judgment, ensuring that all parties uphold their obligations. Upon reaching the Court of Appeal judgment or after the appeal period has elapsed following the initial court’s ruling, the decision becomes final. This enables the Judgment Creditor to progress towards executing the decision through an execution process.

The Execution Application: The Genesis of the Journey

The very initiation of the execution process in the UAE begins with the Execution Application. But what does it entail?

1. Judgment Issuance: After a case concludes, the court announces its decision, usually favoring one party. This verdict transforms into a written judgment, capturing the court’s directives, be it financial compensation or other resolutions.

2. Delivery of Judgment: The written decision reaches the unsuccessful party, starting a 30-day grace period. This period allows the recipient an opportunity to comply with the judgment willingly.

3. Enforcement Measures: If the obligated party does not comply within the 30-day window to comply with the judgment willingly, the next phase of the execution process in the UAE takes the stage. Here, an Execution notice reaches the defendant, offering a final 7-day payment window to comply the judgment under a formal notice through the summons procedure, which can prolong the enforcement timeline. The judgment is endorsed with an Execution Seal, which serves as the official instruction for enforcing the decision.

The Summons Procedure

Integral to the execution process in the UAE, is the summons procedure, a meticulous and multi-faceted mechanism ensuring that the defendant is formally served.

1. The Court’s Messenger: Often referred to as the “service agent” or “court bailiff”, these individual shoulders the onus of delivering the summons to the defendant. They are responsible for ensuring that the defendant receives formal notification of the legal actions taken against them prior to the judgment, or the formal demand for payment post-judgment on the judgment debtor.

2. Channels of serving the summons: The process isn’t a one-size-fits-all. Depending on the defendant’s accessibility and the information at hand, multiple channels might be employed:

  • Personal Delivery Attempts: Central to the Execution Process in the UAE is the court’s service agent, who diligently attempts to hand-deliver the summons directly to the defendant upon an application, usually at their listed address. It’s vital for claimants to furnish the court with their 10-digit Makani number, particularly during the filing stage, to guarantee precise delivery.
  • Electronic Notification: Embracing the digital age, the court may allow email notifications, provided the claimant can confirm the defendant’s association with the given email. Valid evidence would include past communications that the defendant initiated or their involvement in legal procedures using an officially registered email address.
  • Door Notices: If traditional methods falter, the court might approve the placement of the summons at the main entrance of the defendant’s residence or official premises. This approach is valid only if a nameplate or signage displaying the defendant’s name is visible. Lacking such an identifier, this strategy becomes void.
  • Incomplete Delivery and publication: When the summons isn’t successfully delivered after exhaustive efforts, it lengthens the Execution Process in the UAE. The court directs the judgment creditor to gather further information about the judgment debtor or to explore alternate methods for locating and serving them with the execution notice. However, if the defendants aren’t present at their registered address and the commercial property’s landlord has leased the premises to another entity, the bailiff refrains from serving the summons or affixing the summons to the door. In such instances, the importance of a newspaper publication becomes paramount. Thus, in scenarios where locating the defendant becomes a challenge, the court may resort to broadcasting the summons in an Arabic newspaper, ensuring the broadest possible reach.

Enforcing the Judgment: The Heart of the Execution Process

Upon the formal service of the Execution notice via the summons, the strength of the execution process in the UAE becomes evident. Should the defaulting party continue to be unresponsive after the Execution Application, various enforcement mechanisms are activated:

  • Seizure of Assets: An essential aspect of the process involves the courts’ authority to approve the seizure of assets and trade license and freeze the bank account of the judgment debtor. This carries tangible consequences for both businesses and individuals.
  • When a judgment remains unsatisfied, the court isn’t hesitant to immobilize key assets. Whether it’s freezing bank accounts or attaching critical trade licenses, these actions not only ensure that the rightful dues reach the winning party but also can bring the defaulting party’s operations to a jarring halt. For businesses, especially, the ramifications can be profound. When a trade license, often the lifeline of commercial operations, comes under the court’s radar, it can mean an immediate cessation of business activities. The once-bustling hub of commerce can eerily transition into a quiet standstill.
  • Arrest Orders: Navigating the execution process in the UAE involves understanding various judicial tools, one of which is the arrest order in civil contexts. When court-decreed payments are delayed or evaded by the debtor, the aggrieved party or the judgment creditor can escalate the matter by seeking an arrest order. The foundation of these civil arrest orders finds its roots in Article 327 of the UAE Federal Decree Law No. 42 of 2022, specifying the protocols of the Civil Procedures Law.

A significant judicial intervention, an arrest order isn’t doled out casually. A judge weighs multiple considerations before granting it. Primary concerns include probing whether the defendant is:

  • Shifting assets discreetly to sidestep their financial commitments or
  • Indicating attempts to depart the UAE. It’s essential to highlight that today, acquiring a travel ban isn’t as routine as in the past. The barriers are higher, making this aspect a significant determinant.

Following judicial approval for the arrest order, the onus shifts to the judgment creditor. They liaise with the UAE’s Criminal Investigation Department (CID), furnishing them any available insights about the judgment debtor. The CID then meticulously gathers all necessary intel, culminating in the apprehension of the defaulting party.

In conclusion

The execution process in the UAE signifies more than mere enforcement of judgments; it embodies the nation’s unwavering dedication to justice, ensuring every party receives what they rightfully deserve. Like any legal protocol, it’s intricate, nuanced, and necessitates in-depth comprehension. By understanding this system, one can deftly traverse the UAE’s legal intricacies with confidence.

Regrettably, many a time, judgment creditors are confronted with the reality that the judgment debtor might not possess sufficient assets for enforcement or might be untraceable, having either shut down operations, the same shareholders rebranded under another entity, or shifted its ownership to elusive shareholders. Despite the court’s meticulous efforts, tangible assets suitable for enforcement might be non-existent, leading the Judgment Creditor to question the efficacy of the UAE judicial system.

The enforcement mechanism entails lodging an application to seize assets, and in many cases, even after the Central Bank’s directive to attach a bank account, it remains devoid of funds. Similarly, despite court’s directives to seize vehicles, they might be non-existent. Such challenges can be disheartening for the Judgment Creditor, especially when it appears too late for redressal.

The function of legal counsel and the UAE’s judicial system is predominantly procedural in nature. While they diligently adhere to the execution process in the UAE and file necessary applications, their purview doesn’t extend to investigating elusive judgment debtors akin to detective work.

Therefore, judgment creditors might resort to engaging registered search agencies specializing in locating assets to recover amounts owed to them. These agencies, skilled in tracking down assets. Typically, the focus of enforcement actions zeroes in on the assets and liabilities of the business itself, rather than its individual shareholders. This differentiation is grounded in the principle that a company maintains its own distinct legal persona, separate from those who hold its shares.

However, there are challenges:

  • Limited Information: These agencies rely on publicly available data or databases they have access to. If the judgment debtor has been meticulous about not leaving a financial footprint or has taken steps to shield their assets, the search becomes significantly harder.
  • International Boundaries: If assets are held overseas or in jurisdictions with strict privacy laws, it complicates the asset tracing process. International cooperation might be needed, and not all countries may be receptive.
  • Time-Consuming: The asset tracing process can be lengthy, especially if assets have been moved around or hidden in complex financial structures.
  • Costly: Engaging specialized agencies and the potential legal processes involved can be expensive. The costs might sometimes outweigh the benefits, especially if the debt amount is not substantial.
  • False Leads: There’s always a risk of chasing down false leads or coming across assets that aren’t legally attachable due to various reasons, including local laws or the nature of the asset itself.

In light of these challenges, while registered search agencies provide valuable services, there’s no guarantee of successful recovery under execution process in the UAE. To avoid such predicaments, companies should prioritize extensive risk evaluations before formalizing any business engagements. Knowledge about potential collaborators and their financial robustness can offer invaluable insights. Implementing such foresight can significantly curtail the likelihood of grappling with an unenforceable judgment.

Author’s Bio:

Nikhat Sardar Khan, a distinguished legal expert with extensive experience in the UAE’s legal landscape, currently heads the Department of Litigation, ADR and Corporate at Hilal & Associates Advocates & Legal Consultants. Her expertise encompasses complex litigation and dispute resolution in commercial matters, banking, finance, corporate practice, and more. As a qualified arbitrator and experienced mediator, she holds certifications from prestigious institutions like the Chartered Institute of Arbitrators (FCIArb) and The Royal Institution of Chartered Surveyors (RICS). Her legal acumen, honed over decades of practice in both India and the UAE, positions her as a formidable figure in the field of law.

Nikhat Sardar Khan (FCIArb)(RICS)
Head of DIFC Litigation, Corporate & Arbitration- UAE,
MENA and India.
Arbitrator | Mediator | DIFC Practitioner
Email: nikhat@hilalassociates.com

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