Recognition of UAE decrees in India – Dawn of a New Era

Gautam BhatikarPartner, Phoenix Legal

Earlier this month i.e. on 17 January 2020, India has finally issued gazette notification declaring United Arab Emirates (UAE) as a “reciprocating territory” for the purposes of section 44-A of the Code of Civil Procedure, 1908 “CPC / the Code” in short section 44-A of the CPC deals with execution of decrees passed by Courts in reciprocating territory. Under the said notification dated 17 January 2020 India has identified the superior courts in UAE as follows:

Federal Courts:

  1. Federal Supreme Court
  2. Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah.

Local Courts:

  1. Abu Dhabi Judicial Department;
  2. Dubai Courts;
  3. Ras Al Khaimah Judicial Department;
  4. Courts of Abu Dhabi Global Markets;
  5. Courts of Dubai International Financial Centre.

On 25 October 1999, India and UAE had entered into an Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Commissions, Execution of Judgements and Arbitral Awards. The Agreement applied to service of summons, judicial documents or processes, recording of evidence by means of Letters of Request and/or commissions and execution of decrees and arbitral awards. The instrument of ratification of the Agreement was exchanged on 29 May 2000 and published in the Indian Gazette on 16 December 2000. However, till the gazette notification of 17 January 2020, India had only given effect to under Sec 29 (c) of the CPC i.e. service of a summons and other processes.

An updated list of territories under section 44-A of the CPC notified as ‘Reciprocating Territories’ of India by the Central Government of India as on 20 January 2020:

  • United Kingdom
  • Aden
  • Fiji
  • Republic of Singapore
  • Federation of Malaya
  • Trinidad and Tobago
  • New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa
  • Hong Kong
  • Papua and New Guinea
  • Bangladesh
  • United Arab Emirates

With issuance of the gazette notification declaring UAE as a “reciprocating territory”, a decree passed by a ‘superior court’ of UAE among other ‘superior courts’ located in any of the reciprocating territories, as notified, can be directly executed in India by filing a certified copy of the said decree before the Court with appropriate Jurisdiction in India. Upon filing a certified copy of the decree from a ‘Superior Court’ of UAE or otherwise, the concerned Court in India will treat the decree as if it was passed by itself. A decree for the purpose of this section would mean any decree/judgment of a superior court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of fines or other penalties.

Thus, under Indian Law, for the execution of decrees passed by a superior court of a reciprocating territory, the said decree can be executed directly by an application under the provisions of section 47 r/w Order XXI Rule 22 of the CPC. Thus, reciprocating territories enjoy greater privilege regarding the execution of decrees of their superior Courts in India than by decrees of non-reciprocating territories.

Challenges faced prior to the notification:

For enforcing a foreign judgment/decree from a ‘Non-Reciprocating Territory’ of India, a fresh suit in an Indian Court with appropriate Jurisdiction had to be instituted. Further, such judgments/decrees only had evidentiary and/or persuasive value from the perspective of India Judiciary. Further, such suits would have to be filed for enforcement within three years from the date when they were passed or the original cause of action. Thus, enforcement of decrees from a ‘Non-Reciprocating Territory’ was a time consuming and costly affair for prosecuting a fresh round of litigation, having already passed the stages of securing a “final” or “conclusive” Judgment / Decree against the judgment debtor/s.

To conclude, as UAE enters the list a “reciprocating territory”, with India, this is a game-changer, particularly for the financial institutions, in the execution of civil judgements/decrees, passed in the last 12 years, who have recoveries to make against Indian judgement debtors. Henceforth, this will also act as a deterrent to those who flee to India after taking loans from banks in the UAE. In the past, decree holders from UAE found it extremely difficult and time-consuming to recover sums under decrees if the debtor had fled to India. This step by the Indian Government will provide a sigh of relief for decree holders having decrees passed in their favour in the last 12 years, subject to conditions being satisfied under section 13 of the Code. Decree holders in matters particularly related to recoveries can now execute the judgements through a much simpler process. The matter will no longer be re-examined on merits by way of a suit. This step will not only strengthen the bilateral judicial relationship between UAE and India but also play a vital role in growing the commercial relationship between the two nations.