In the dynamic legal landscape of Dubai, understanding the nuances of precautionary or interim orders and the execution of judgments is crucial for legal practitioners and stakeholders alike. As we enter 2024, this guide is an essential resource, offering an in-depth analysis of these critical legal mechanisms within the Dubai Courts.
From the initial stages of obtaining precautionary orders to the complexities involved in enforcing final judgments, this article provides a detailed exploration of each step in the process.
This article will thoroughly explain how Dubai’s legal system navigates these pivotal aspects, ensuring informed decision-making and effective legal strategy in this jurisdiction.
Interim Remedies
Precautionary attachment/seizure of bank accounts
A creditor can seek an order of precautionary attachment, i.e., temporary seizure of the debtor’s assets, such as bank accounts, if the debtor doesn’t have a permanent residence in UAE.
The creditor fears that the debtor may flee the country or smuggle/conceal his money or that there is a risk associated with debt security.
Precautionary travel ban
A creditor may request the Court for a travel ban even before bringing a substantive claim when:
- There is an intense apprehension that the debtor may flee the country without paying the debt.
- The debt exceeds AED 10,000.
- The debt is of a certain amount. If the debt amount is not certain, then the Judge is empowered to estimate it temporarily, provided that the claim is based on written evidence and a guarantee is submitted by the creditor to cover the damages.
The courts are, however, generally reluctant to issue a precautionary travel ban. The travel ban is lifted once the outstanding amount is deposited with the Court.
Precautionary attachment of bank guarantees or bonds
This is usually relevant in construction projects, where the contractor has provided a performance guarantee to the developer.
Before commencing court proceedings or arbitration proceedings (if a contract contains an arbitration clause), the contractor may request the Court to order the banks not to accept a request to encash the guarantees until the legal proceedings dealing with the substantive dispute are completed.
Court Orders During Execution Proceedings for Implementing Final Judgments
Once a Court has issued a final Judgment, the next step is enforcement. To enforce or execute a Court Judgment, a Judgment creditor must approach the Execution Division of Courts and apply for its enforcement.
Suppose the Judgment debtor makes no payment during the execution proceedings. In that case, the Execution Court has the power to take specific measures, such as attachment or seizure of bank accounts, properties, and vehicles, to execute the Judgment.
The Execution Courts are also empowered to issue a travel ban or an arrest warrant. Below, we have given an overview of the different measures an execution court is empowered to take and the practical considerations to keep in mind.
Attachment or seizure of bank accounts
If the Judgment debtor fails to make the payment after receiving a notice to pay from the Execution Court, the Judgment creditor can request the court to attach the Judgment debtor’s bank account to recover the outstanding Judgment amount.
If the debtor’s bank account details are unknown, the creditor can request the Execution Court to instruct the Central Bank to conduct a search regarding the bank accounts held by the debtor.
However, it can take some time for the Central Bank to provide the information. For this reason, the execution proceedings can become unusually lengthy and prolonged.
Therefore, the best practice is to obtain the debtor’s bank account details before going into litigation to ensure speedy execution of any Judgment later on.
Attachment of properties
Apart from a bank account, the Execution Court can also order attachment of the Judgment debtor’s real property.
If the creditor is unaware of the real properties the debtor owns, then the Creditor can request the Execution Court first to instruct the Dubai Land Department (DLD) to search in this regard.
Usually, it takes a few weeks for DLD to respond. After DLD provides the information, the Creditor may request the Execution Court to attach the properties accordingly.
Attachment of vehicles
Similarly, in case of attachment of vehicles, the Judgment creditor can request the Execution Court to instruct the Road and Transport Authority to search for the vehicles owned by the Judgment debtor.
After getting the information, the Creditor may request the Execution Court to attach the vehicles accordingly. After that, the police can seize the cars, which can be auctioned to recover the Judgment amount.
Travel ban
If the Judgment debtor fails to pay the amount, the court may issue a travel ban against the person or against the Manager (if the Judgment debtor is a company).
The creditor needs to submit the Emirates ID or Passport Copy of the debtor (or manager of the company in case the Judgment debtor is a company) to apply for a travel ban.
If the creditor does not have these documents, then the creditor needs to request the Execution Court to request the relevant authorities, e.g., Dubai Economic Department, etc, to provide a copy of the same if in their possession.
This process can also take a long time, so it is essential to obtain this information beforehand.
Arrest warrant
Previously, if the Judgment debtor failed to pay in Dubai, an Execution Court could issue an arrest warrant against him.
However, the Dubai Court of Cassation Committee has recently instructed the Dubai Courts not to order arrests unless the Judgment creditor can prove the Judgment debtor is not paying the Judgment amount despite having the funds.
In any event, the Courts will cancel the arrest orders if an instalment plan for the payment of the Judgment amount is proposed by the Judgment debtor and accepted by the Court.
It should further be noted that the Courts will not issue an arrest or detention order in the following cases:
- If the debtor is under 18 or over 70.
- If the debtor has a child under 15 years of age and their spouse is deceased or imprisoned for any reason.
- If it is proved by medical evidence that the debtor is ill with a chronic disease.
Conclusion
Navigating the intricacies of execution cases requires more than just knowledge. It demands experience, expertise, and a deep understanding of the local legal landscape. We at SK Legal provide the following services:
- Comprehensive legal consultancy: Whether you are dealing with civil or commercial disputes, our team is equipped to provide you with the best legal advice.
- Support during negotiations: Our legal advisory services extend to assisting clients during crucial negotiations, ensuring their interests are always protected.
- Collaboration with other law firms: We understand the nuances of local jurisdictions. We collaborate with licensed local law firms to oversee court cases, especially in Dubai and Sharjah courts.
For personalized assistance and advice, contact us at info@sklegalfirm.com.
Frequently Asked Questions (FAQs) About the Precautionary or Interim Orders and Execution of Judgments in Dubai Courts
What is the procedure for enforcing a Judgment in Dubai?
A Judgment can be enforced after it has become final by initiating the relevant proceedings in the Execution Division of the Dubai Courts.
After that, the Judgment debtor is notified about the execution procedure and is given 7 days to pay the Judgment amount. If the Judgment debtor fails to pay within 7 days, the Judgment creditor can request the Court to take the abovementioned measures.
What is a payment order?
A creditor can apply for a payment order where the debt sought to be recovered is a fixed sum of money, and the creditor has a written acknowledgement. It is a quick and efficient procedure for recovering money.
Before applying for the payment order, a creditor must issue a 5-day written notice to the debtor to pay the outstanding amount. If the debtor fails to pay within 5 days, the creditor can file an ex-parte application in the Court for a payment order.
Is a bounced cheque considered a writ of execution?
A bounced cheque (due to insufficient funds) is considered a writ of execution. Therefore, if a cheque is returned due to insufficient funds, the payee can approach the execution division of UAE Courts and request an order for payment straightaway.
Can a DIFC Court Judgment be enforced through Dubai Courts if the Judgment Debtor is based out of DIFC?
A DIFC Court Judgment can be enforced through the Dubai Courts if the following conditions are met:
- The Judgment has become final and executory.
- The Judgment has been certified by the DIFC Courts for execution
- The Judgment has been legally translated into Arabic.
The party seeking enforcement must first obtain an execution letter from the DIFC Courts. After that, the party has to submit an application for enforcement to the execution Judge at the Dubai Courts, accompanied by the execution letter and an Arabic translation of the Judgment. On receipt of the application, the Dubai Courts must enforce the Judgment under the Federal Civil Procedures Law.
Can a foreign Judgment be enforced in the UAE?
UAE has bilateral treaties with various countries regarding reciprocation of Judgment enforcement. Foreign court Judgments of any reciprocating territory can be enforced in the UAE courts if the following conditions are met:
- UAE Courts don’t have exclusive jurisdiction over the dispute;
- The Judgment doesn’t conflict with a UAE court judgment, public order, or morals of the UAE.
