UAE Judgement & Enforcement in India

The Indian Ministry of Law and Justice declared on 17th January 2020, the UAE to be a ‘reciprocating territory’ in an effort of section 44 of India’s Civil Procedure Code (CPC), 1908. The move has been hailed as an important milestone in recognition and enforcement but at the same time, noted for its lack of retrospective effect.

Previous efforts by the UAE and India to enter into a Memorandum of Understanding (MoU) in order to facilitate reciprocal enforcement, and in particular UAE judgments in Indian courts, failed after meetings between UAE and Indian authorities in January 2017. The arrangement was expected at that time to take effect on 1st January 2018 but did not materialize due to procedural and jurisdictional issues.

The Indian Ministry of Law and Justice announced the decision to make the UAE a ‘reciprocating territory’ following an agreement between India and the UAE on trade, investment, tourism, and cultural relations during the visit of Sheikh Mohammed Bin Zayed Al Nahyan as Crown Prince of Abu Dhabi to India in January 2019.

The declaration by the Indian Ministry of Law and Justice came into effect on 17th January 2020 after it was published in the Official Gazette of India. It appears that no other formalities/queries were required by either jurisdiction to be completed before the decision took effect, although there may yet be some issues to be clarified in the future.

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Background to the reciprocal enforcement of judgments

The Indian Ministry of Law and Justice declaration follows a similar move made by the UAE, which on 9th March 2019 declared India to be a ‘reciprocating territory ‘in matters concerning court judgments under Article 1(2) of Federal Decree-Law No. 13 of 2009 (Federal Decree Law No.13).

The UAE has designated India as a ‘reciprocating territory’ following the Mumbai Special Court (International Cooperation) Act, 2018 and its implementing regulations made under Section 44 of the CPC 1908. The decision by the UAE to make India a reciprocating territory follows amendments made to the Indian CPC 1908 in January 2019 under Section 44. Those amendments provided for reciprocal enforcement of foreign judgments and arbitration awards (excluding those originating from jurisdictions which do not subscribe to commonly established principles of international law).

Although the changes in the CPC 1908 in India were welcomed as a significant development, no plans were put in place at that time for its ratification of the MoU entered into between the UAE and India in January 2017. The parties did not arrange a date for the commencement of that arrangement, which would have facilitated reciprocal enforcement, despite 2016 meetings on mutual legal assistance held by both countries.

The Indian Supreme Court’s judgment in Love Singh Nijhawan v. State of Haryana, delivered on 21st September 2018, further complicated matters after it was made clear that there were no provisions in the CPC 1908 which would have authorized Indian courts to enforce UAE court judgments. The Court held that all foreign judgments had to be re-examined/reviewed before they could be enforced in India under Section 41 of CPC 1908. The Indian Ministry of Law and Justice had proposed bringing this decision to the attention of UAE authorities before they declared on its reciprocating territory status, but it appears no such steps were taken and that there was some reluctance amongst UAE authorities in regards to the Court’s judgment and re-examination, which may have contributed to the Indian authorities not taking any further steps to implement the arrangement at that time.

Under Section 44 of CPC 1908, a foreign judgment or arbitration award is enforceable against a resident in India only if the following conditions are met:

The Convention encourages the choice of the jurisdiction in which to submit action or request for a provisional ruling by mutual agreement between parties, rather than permitting the party bringing the initial claim to unilaterally determine this discretion. Under Article 9(1) of the Hague Convention, if both jurisdictions are signatories to the Convention, then it will require that all proceedings related to the action or request be submitted only before the court in one of those jurisdictions. As well as this, Article 9(2) requires that concurrent proceedings must have stayed if an application is made by a party with the right of access to both courts unless certain prescribed conditions are satisfied.

Guidelines on the application of the Hague Convention were issued by Indian courts in February 2019, which are aimed at lessening any potential issues that could arise as a result of its introduction into India’s legal landscape. The Indian Ministry of Law and Justice declared on 17th January 2020, the United Arab Emirates to be a ‘reciprocating territory’ in an effort of section 44 of India’s CPC 1908. This places UAE court judgments on par with judgments originating from courts in specific other jurisdictions such as the United Kingdom, Singapore, and Hong Kong.

This advancement/evolution has been well communicated/received since it takes off a critical technical obstacle in the enforcement of UAE court judgments in India and brings into effect a significant reciprocal arrangement.

In countries such as India, where the enactment of an office to deal with requests for mutual legal assistance or extradition is not mandatory, it may be difficult to enforce foreign judgments. In this case, especially, reciprocity has been made much easier by the declaration of the UAE as a reciprocating territory. This new development, however, has moved Indian courts towards automatic enforceability rather than an inquiry into whether or not there is reciprocity between India and the UAE.

The declaration of reciprocating territories by the UAE and India has now made it possible for any judgment originating from one country to be enforced in another without re-examination/reviewing its underlying cause. It is also important to note that this development is separate from section 44 designation of a particular country as a ‘reciprocal state’ under CPC 1908. The latter is merely an honorary designation, which only requires the central government of India to publish a list of countries or territories from where reciprocating states issue judgments or awards that are entitled to reciprocal enforcement in India without further scrutiny/assessment by Indian courts. The declaration of reciprocity, on the other hand, is intended to facilitate the recognition and enforcement of foreign judgments originating from countries found ‘reciprocating’. This would be done by Indian courts carrying out an assessment, or making a determination that the foreign judgment falls within the scope of reciprocity.

Reciprocity is now established as one of the prerequisites for the enforcement of foreign judgments in India. Another criterion that must be met is to establish reciprocity between India and the UAE, which has been possible by the declaration (effectively a reciprocal arrangement) of the UAE as a reciprocating territory.

This advancement/evolution has been well communicated/received since it takes off a critical technical obstacle in the enforcement of UAE court judgments in India and brings into effect a significant reciprocal arrangement. It shall be interesting to see how this unfolds in practice, and whether or not these recent developments in Indian judicial policy towards UAE judgments will lead to the more widespread reciprocal declaration of foreign judgments.