RETROSPECTIVITY OF RECIPROCITY – UAE FOCUS.
enforcement of UAE decrees in India
(This article explores the retrospectivity of the notification issued by the Central Government, under Section 44A CPC, with respect to UAE in light, of the recent judgement of the Kerala High Court)
The enforcement of a foreign judgement is based on the concept of reciprocity. The dictionary meaning of the term ‘reciprocity’ is “the practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another”
A District Court shall enforce a foreign decree from the superior court of a reciprocating territory, as if it is a decree passed by the Court[i]
Superior Courts of Reciprocating Territory
‘Reciprocating Territory’ means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory; and superior Courts, with reference to any such territory, means such Courts as may be specified in the said notification[ii]. Therefore, it is upon the Central Government to issue a notification declaring reciprocating territory, immediately following a bilateral agreement between the reciprocating territories.
Indian and United Arab Emirates on 25th October 1999 have entered into an agreement on juridical and judicial cooperation in civil and commercial matters for the service of summon, judicial documents, commissions, execution of judgement and arbitral awards[iii].
Reciprocity with UAE
The Central Government, following the agreement[iv] on 17th January 2020 issued a notification specifying the superior courts. According to the notification, the following courts in UAE are the superior Courts, whose judgments are enforceable in India.
- Federal Court-
- Federal Supreme Court;
- Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi; and
- Sharjah, Ajman, Umm Al Quwain and Fujairah.
- Local Courts-
- Abu Dhabi Judicial Department;
- Dubai Courts
- Ras Al Khaimah Judicial Department;
- Court of Abu Dhabi Global Markets; and
- Court of Dubai International Financial Center.
A question arose whether this notification[v] is prospective or retrospective. If the notification is prospective, all those judgements passed before the date of notification, are unenforceable. The Kerala High Court answered this question in Kadheeja Kalladi Puthanpurayil Vs. Mohammed Nazir Abdul Aziz[vi].
The Kerala High Court rules the notification declaratory and prospective
A judgement debtor challenged an order passed by a District Court in an application for execution of a Dubai Court Decree. The decree was passed before the issuance of the notification and the court held that the execution application, maintainable[vii]. A learned single judge of the Kerala High Court, however held that the execution application is not maintainable. However, the question whether a fresh execution petition filed after the date of the notification was left open for determination in an appropriate case[viii].
A Division Bench of the Kerala High Court, however reversed the decision of the Single Judge. It held that the notification is in the nature of a declaration that UAE is a reciprocating territory for the purpose of Section 44A of the Code of Civil Procedure. The reciprocity is relatable to the bilateral agreement entered into between India and UAE on 25.10.1999. The declaration is a matter covered by the agreement. Therefore all the decrees of the superior courts from UAE passed after 25.10.1999 are executable in India[ix].
Other Concerns against Enforcement
Except, the Court of Abu Dhabi Global Markets and Court of Dubai International Financial Center, all other courts in notification follow civil law system. While these named courts, follow the common law, and are compatible to the Indian system. The compatibility of the judgement, is relevant to make it conclusive, and enforceable[x].
Conclusion
In the nature of the volume of the debts to be recovered from this part of the world, a better understanding regarding the procedures of the courts having local jurisdiction over the location in which the assets are placed, may be important. The retrospectivity of the notification, upheld by the High Court, appears to be one big and bold step forward.
[i] Section 44A of the Code of Civil Procedure.
[ii] Explanation 1 to Section 44A of the Code of Civil Procedure 19808
[iii] https://legalaffairs.gov.in/agreement-between-republic-india-and-uae-0
[iv] supra
[v] supra
[vi] Khadheeja Khaladi Puthenpurayil Vs. Muhammed Nazir Abdul Azeez (31.03.2021 – KERHC) : MANU/KE/1509/2021
[vii] Original Petition OP(C)No. 950/2020 before the High Court of Kerala.
[viii] Judgement OP(C) No. 950/2020 dated 4th November 2020 passed by a leaned Single Judge of the Kerala High Court
[ix] Khadheeja Khaladi Puthenpurayil Vs. Muhammed Nazir Abdul Azeez (31.03.2021 – KERHC) : MANU/KE/1509/2021
[x] Section 13 of the Code of Civil Procedure.
