Tim Elliott
Welcome to Lawgical, the UAE’s first and still the only regular legal podcast. My name is Tim Elliott, and as always, Lawgical comes to you from the Dubai-based legal firm Yamalova & Plewka. Here is the managing partner, Ludmila Yamalova. Nice to see you.
Ludmila Yamalova
Good to see you too, Tim. Thanks for being here.
Tim Elliott
This episode of Lawgical is special. It’s fresh, hot off the press, and I mean that literally. Ludmila, your practice has recently made history in the UAE with the enforcement of a foreign judgment. That’s what we’re talking about today, along with the significant role LYLaw played in this historic achievement.
First, let’s set the stage. Could you outline the basics of this case and define the term “foreign judgment” for everyone?
Ludmila Yamalova
In simple terms, a foreign judgment is a decision issued by a court in one country that is enforced or attempted to be enforced in another country. For example, let’s use the case we’ll discuss today. It’s a judgment from the United States—a US court ruling that was not enforced in the US but was enforced in the UAE.
Why is this important? It’s crucial in today’s globalized world. People are highly mobile and transient, often touching multiple jurisdictions without being permanently or even regularly connected to any one of them. For instance, you might go to the US, make an investment, but not live or work there. If a dispute arises involving that investment and a judgment is issued against you, what happens if you don’t have assets in the US to satisfy the judgment?
This is where enforcement of foreign judgments becomes significant. Too often, people incur obligations in one country and then run away to another to avoid those obligations.
Tim Elliott
That makes sense. But historically, what kinds of foreign judgments have been enforced more commonly?
Ludmila Yamalova
Foreign judgments have typically been enforced in two main contexts:
- Personal Status Cases – For example, alimony or child support judgments. These judgments have often been enforced through expedited methods like embassies or foreign offices, especially when the interests of children are at stake.
- Criminal Cases – These include serious crimes like murder or fraud. Criminal judgments often lead to extradition requests. For instance, if someone commits tax evasion in Sweden and flees to the UAE, the Swedish authorities might pursue extradition.
Civil judgments, however, are a different story. These involve monetary disputes like breach of contract, non-payment of debt, or compensation for damages. Historically, civil judgments have not been as readily enforced across jurisdictions because they lack the urgency of personal status or criminal cases.
Tim Elliott
Why is it harder to enforce civil judgments?
Ludmila Yamalova
It often comes down to sovereignty. Courts don’t like being told what to do by courts in other countries, especially when legal systems and public morals differ. For example, something legal in one country might be illegal in another, making enforcement challenging.
Additionally, whether a judgment is enforced can depend on treaties or the principle of comity, which is mutual recognition of judgments between countries. Some countries sign specific treaties to facilitate enforcement, while others rely on this broader principle of mutual recognition.
Tim Elliott
What if a judgment violates the public morals or laws of the country where enforcement is sought?
Ludmila Yamalova
That’s often a dealbreaker. For instance, let’s say you have a valid judgment in the Netherlands related to a legal cannabis business, but you try to enforce it in the UAE, where cannabis is illegal. UAE courts would likely reject the enforcement, as it contradicts public morals and local laws.
Tim Elliott
Given this complexity, how did LYLaw make history with the first US civil judgment enforced in the UAE?
Ludmila Yamalova
This case involved a US judgment for approximately USD 1 million. It arose from a property dispute and related claims in the US, where the court had proper jurisdiction. The defendant, a European national residing in the UAE, had no significant assets in the US.
When we first attempted to enforce the judgment almost 10 years ago, UAE laws made it difficult. At the time, enforcement was essentially a non-starter because the UAE required a treaty with the issuing country, and no treaty existed between the UAE and the US.
Fast forward to 2021. The UAE introduced significant legislative changes, including updates to Article 85 of the UAE Civil Procedure Law, which governs the enforcement of foreign judgments. Importantly, this article does not require a treaty for enforcement. Armed with this change, we filed an order on petition to enforce the US judgment.
Tim Elliott
And how did that process unfold?
Ludmila Yamalova
Initially, the Court of First Instance rejected our petition, citing the lack of a treaty. We appealed, arguing that Article 85 does not require a treaty and that all other criteria—such as proper jurisdiction, service of process, and non-violation of public morals—were met.
The Court of Appeals agreed with us, marking the first time a US civil judgment was enforced in the UAE without a treaty. The defendant then appealed to the Court of Cassation, which upheld the Court of Appeals’ decision.
Tim Elliott
What does this mean in practical terms?
Ludmila Yamalova
It means the UAE now recognizes and enforces US civil judgments, provided they meet legal criteria and don’t violate public morals. This precedent will likely make it easier for others to enforce similar judgments in the future.
Tim Elliott
But how do you ensure the judgment is enforced if the defendant decides to leave the UAE?
Ludmila Yamalova
UAE courts allow precautionary measures like freezing assets or issuing travel bans while enforcement proceedings are ongoing. For instance, in this case, we successfully requested a travel ban to prevent the defendant from leaving the country until the judgment is resolved.
Tim Elliott
This is a significant moment for the UAE’s legal system. What’s your advice for others looking to enforce foreign judgments here?
Ludmila Yamalova
Stay updated on legal developments, use creative legal arguments, and leverage the UAE’s evolving judicial framework. Avoid relying on outdated precedents, as the legal system here is progressing rapidly.
Tim Elliott
This has been an incredible discussion, Ludmila. Thank you for your insights.
Ludmila Yamalova
Thank you, Tim.
Tim Elliott
That wraps up another edition of Lawgical. Find us on Facebook, Instagram, TikTok, LinkedIn, or at lylawyers.com. If you’d like your legal question answered in an episode or need expert legal advice, click Contact at lylawyers.com.