Partner - Head of Litigation UAE, Ibrahim & Partners
On 3 October 2022, the UAE enacted Federal Decree-Law No.42, which will come into effect as of 2 January 2023. The new UAE Civil Procedures Law (the “New Law”) has revoked Federal Law no.11 of 1992 of the Civil Procedures and all its amendments/executive regulations (the “Old Law”).
The New Law includes some major amendments that substantially affect the procedures in civil/commercial courts, aiming to alter the litigation process to become a more effective and rapid process.
Below is a summary of the key changes of the New Law:
As per the New Law, the official language of UAE Courts is still Arabic language. However, the New Law provided an exception where cases can be held in the English language under certain/special conditions as follows:
We anticipate that there will be new resolutions/decrees in each respective Emirates that regulate this general condition.
The New Law has granted Abu Dhabi’s Courts exclusive jurisdiction over all Cases where a ministry or any federal entity is a party to the case. In other words, in case any private company or individual wants to sue any governmental entity, the Abu Dhabi court would have exclusive jurisdiction to rule in this case.
The common process of appointing an expert by the Court during the case proceedings has now changed. The New Law provided that during the case management stage, the supervising judge may request the assistance of one of the local or international experts to prepare or review the reports submitted to the Court as part of the case. The Court will discuss the outcome of such reports with the appointed expert and have the right to instruct them to amend or add further points to their reports.
It is not yet clear from the New law who will bear the associated cost of the appointment of the local/international expert. However, we still expect that there will be separate regulations issued by the Vice-President of the Federal Judicial Council to clarify such ambiguity and others too.
Similar to Cassation Court, Courts of Appeal will have the right to review the Appeal challenges in the Council Chambers upon referral from the Case Management Department, without the need for the counsel’s attendance or submission of any oral/written pleadings.
The Appeal Courts will have the authority to either issue a verdict/substantiated decision or schedule hearings for the Appeal on the merits.
One of the significant amendments of the New Law is that appealing before the Court of Cassation shall now be within 30 days, instead of 60 days, from the issuance date of the Appeal judgment. This is another amendment toward a more rapid and effective mechanism to conclude the litigation process with a final executable judgment holding a res-judicata power.
As of 2 January 2022, the Court of Cassation may rescind their decisions, which were issued in the Council Chambers, or final verdicts. Courts of Cassation may rescind judgments at their sole discretion or based on a request submitted by one of the parties.
Article 190 of the New Law stated that the Court of Cassation may rescind its own decisions/judgments in one of the following situations:
The rescindment request shall be submitted to the relevant Court (Federal Supreme Court or Court of Cassation) with a deposit of AED 20,000-/, which will be reviewed by a committee that consists of five (5) judges.
We note that this is one of the very extreme amendments proposed by the new law which, if not governed wisely, may cause instability to the principle of final judgment res-judicata and render enforcement of judgments at very high risk.
Similar to the Old Law, the New Law granted those who have First Instance Judgements in their favor the right to proceed with preventive procedures such as provisional attachment.
Nevertheless, the New Law provided a new time restriction to the provisional attachment imposed by one of the parties prior to the conclusion of the appeal stage. The party who has a provisional attachment in their favor is now obliged to commence executing the appeal judgment within a timespan of Thirty (30) days of its issuance. Otherwise, the imposed provisional attachment shall be void by law.
According to the New Law, the party that is being executed in an execution case has a grace period of seven (7) days (instead of 15 days in the Old Law) from the date of a successful notification in order to amicably clear the debt to avoid any provisional attachment procedures.
Similar to the Old Law, the New Law, granted creditors, who obtain an executive writ, the right to file a lawsuit against the garnishee in case they submit insufficient reports or conceal documents. Creditors, in their case against the garnishee, may claim the total amount withheld by the garnishee. A very simple example that when creditors correspond with banks (through the court execution system) to inquire about the funds of the debtor, in order to proceed with the execution. Should the bank provide insufficient information, then it will liable for the same execution amount jointly with the debtor.
Nevertheless, the New Law provided that such a claim shall not be accepted after the lapse of three (3) years from the date of the report decision.
In summary, the New Law aims to modify the litigation process to become more robust, rapid, and efficient. Some of the new amendments still require trial time before we can ascertain that they satisfy their purpose. We also expect further executive regulation to be issued in the first quarter of 2023, which will provide a more comprehensive explanation of the execution procedures of many of the new amendments.
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