Enforcement of arbitral awards: Processes and Pitfalls

Domestic Awards

A domestic award is one which specifies the seat or legal place of arbitration as the UAE. For parties who wish for their award to be a domestic UAE award, there are two options for the seat (i) choose a seat in one of the Emirates, or (ii) specify the seat as the Dubai International Financial Centre ("DIFC"). The choice will have a significant impact on the process for enforcement of the award in the UAE.

Domestic Enforcement of a UAE arbitration award seated in the UAE but not the DIFC.

In order to enforce a domestic award, it must first be ratified by the UAE Courts [1]. In order to ratify the award, the Award Creditor must issue a claim form, accompanied by supporting documents, applying for the ratification of the award by the Court of First Instance ("CFI"). The Award Debtor may apply to have the award annulled, and can do this before or after receipt of the application for ratification. As a result, the Award Debtor will almost invariably file an application for have the award annulled.

The Court will then proceed to hear each parties' respective arguments by way of submissions and hearings and, thereafter, provide its judgment.

Once the Court provides its decision, the losing party has an automatic right to appeal in relation to both facts and the law provided that the appeal is made within 30 days of the judgment [2]. Due to the ease with which an appeal can be made, the party which loses before the CFI will invariably make an application to the Courts of Appeal.

The UAE law provides an automatic right for either party to appeal a Court of Appeal judgment within 30 days of the date of the judgment on issues of law only. Permission to appeal is not required except for in certain circumstances, including where the amount in dispute is undefined or under AED 200,000.  As a result, the losing party will often appeal to the Court of Cassation as a further tactical measure in order to delay the enforcement of a domestic award. In this regard, it is also worth noting that the right to challenge an arbitral award is a mandatory provision of UAE law and any attempt to contract out of this, whether in the contract between the parties or during the arbitral process, will not be valid.

The grounds upon which the UAE Courts may rely to nullify an award are [3]: 

• there was no agreement to arbitrate between the parties;
• the agreement to arbitrate between the parties was invalid;
• the agreement to arbitrate was not made by someone with the capacity to agree to arbitration;
• the arbitrator(s) exceed the limits of the agreement to arbitrate;
• the arbitrator(s) were not properly appointed in accordance with the law;
• if the arbitrator(s) who rendered the award acted in the absence of the full tribunal;
• if the award is given under an agreement to arbitrate which does not relate to the dispute;
• if the award is given by an arbitrator who does not meet the legal requirements; and
• if "there is something invalid in the ruling or in the procedures affecting the ruling".

It is the ambiguity in the last bullet point which gives the greatest cause for concern and widens the scope for arguments against ratification and has historically given rise to cases where arbitral awards have been annulled for seemingly insignificant flaws.

Thankfully, the overwhelming feedback from practitioners is that the situation with regard to enforcement of domestic awards in the UAE has improved significantly in recent years and is continuing to improve.

Domestic Enforcement of a UAE arbitration award seated in the DIFC

The first step in this process is to apply to the DIFC Courts to recognise the award.  The grounds upon which the DIFC Courts may refuse to recognise the aware are limited to [4]:

• a party to the arbitration agreement was under some incapacity;
• the arbitration agreement is not valid under the law to which it was subject or, if no law is stated, the law of the state or jurisdiction where the award was made;
• the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or the proceedings or was otherwise unable to present its case;
• the award deals with a dispute not contemplated by or not falling within that which was contained within the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration, provided it is not possible to separate those matters which have gone beyond those submitted to arbitration from those which have been so submitted;
• the composition of the Tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, in the absence of such agreement, not in accordance with the law of the state or jurisdiction where the arbitration took place;
• the award has not yet become binding on the parties or has been set aside or suspended by a court of the state or jurisdiction which, or under the law of which, the award was made;
• the DIFC Court considers that the subject matter of the dispute would not have been capable of settlement by arbitration under the laws of the DIFC; or
• the DIFC Court considers that the enforcement of the award would be contrary to the public policy of the UAE.

These grounds are based on and largely mirror the grounds set out at Article V of the New York Convention.

Awards recognised by the DIFC may be enforced in non-DIFC or 'onshore' Dubai, pursuant to Dubai Law No 12 of 2004 (the "Judicial Authority Law") [5]. Dubai law provides that the Dubai Courts do not have jurisdiction to review the merits of a DIFC Judgment or order prior to its enforcement.  As a result, any award recognised by the DIFC Courts should be enforced by the Courts of Dubai without the merits being revisited. Once the Courts of Dubai have enforced the DIFC Judgment, the Judgment can be enforced in the execution courts of the other Emirates in accordance with UAE Federal Law and the Riyadh Convention.

Foreign Awards

Onshore Enforcement

Prior to 2006 any arbitral award that did not comply with the UAE Civil Procedure Code was deemed unenforceable in the UAE. In 2006, however, the UAE signed the New York Convention and the Federal approach to the recognition and enforcement of foreign arbitration awards has developed over the subsequent years.

Initially the UAE Courts were reluctant to embrace the New York Convention and instead relied on the strict provisions of the UAE Civil Procedure Code in relation to foreign arbitral awards, meaning that Award Debtors were able to successfully rely on the sort of technical defences which the application of the New York Convention would have prohibited.

The position today which ought to be adopted is that provided a foreign arbitral award is valid under the terms of the New York Convention, it need not be fully compliant with the requirements the Civil Procedure Code in order to be enforced in the UAE. Such was confirmed in the cases of Macsteel International and Reyami [6]. However, as the UAE Courts do not adopt a binding system of precedent, there remains a risk that a foreign award may not be enforced for a ground which, strictly speaking, is not available under the New York Convention. For example, in the 2013 decision in CCI [7] , the Dubai Court of Cassation held that enforcement of a foreign arbitral award may be refused for lack of jurisdiction where an award debtor is not resident or domiciled in the UAE, or where the case does not concern an obligation performed in the UAE. Further, the Dubai Court of Appeal earlier this year refused to recognise an English arbitral award on the grounds it was not satisfied the UK was a signatory to the New York Convention. Thankfully, this decision was reversed by the Court of Cassation [8] in August 2016.

The UAE has also entered into a number of treaties (such as the Riyadh and GCC Conventions) and, where the arbitral award is issued in a jurisdiction that is not a party to the New York Convention, consideration should be given to whether a treaty is in place between that jurisdiction and the UAE to assist with enforcement.

The DIFC

In the DIFC, the process for the recognition and enforcement of a foreign arbitral award is relatively straightforward and follows that set out above for enforcement of a DIFC award.

A number of recent high profile decisions in the DIFC Courts [9] have opened the doors to enforcement of foreign arbitration awards and judgments in the 'onshore' Dubai Courts.

A number of test cases over the last three years have seen foreign arbitration Award Creditors relying on the reciprocal arrangements in place between the Dubai 'onshore' Courts and the DIFC Courts to enforce arbitration awards recognised by the DIFC Courts against onshore assets in Dubai. A recent Court of Appeal decision in DNB Bank ASA -v- Gulf Eyadah [10] has now confirmed that foreign judgments recognised by the DIFC Courts may be enforced against onshore assets in Dubai using the DIFC as the conduit or 'gateway' jurisdiction.

Armed with a DIFC Court order recognising their arbitration award or foreign judgment, judgment creditors may now proceed to a Dubai execution judge for enforcement. However, the question remains how the Dubai execution courts will approach those judgments. Justice Sir Anthony Coleman gave his unequivocal view in the Egan Eggert case [11]:

“The effect of Article 7 [of JAL] is therefore that once an order for recognition and enforcement in respect of property in non-DIFC Dubai lands on the executive judge’s table, he or she is bound to enforce it, provided the pre-conditions specified in Article 7(2)(a) and (b) are satisfied...What the executive judge is not permitted to do is to review the merits of the award or order."

Accordingly, in theory at least, once the DIFC Courts have made an order recognising a foreign award or judgment, that order, like a judgment issued in the DIFC Courts, can be taken onshore to an execution judge of the Dubai Courts.

As a result of these developments, international litigants are expected to become increasingly interested in seeking recognition and enforcement of foreign awards and judgments in the DIFC Courts before taking the resulting court order to the Dubai Courts for execution. This would (in theory at least) bypass any further consideration of the merits of the award or judgment by the Dubai Courts or any challenges brought by the debtor. It also opens the door for enforcement of foreign arbitration awards and judgments in the UAE and the wider GCC (under the various conventions between its member states).

Domestic Awards

Article 55 of Royal Decree 47 of 1997 promulgating the Law of Arbitration in Civil and Commercial Disputes Law, as amended (the "Arbitration Law") provides that (as translated):

"The awards passed by the arbitrators in accordance with the Arbitration Law shall have the force of res judicata and shall be enforceable pursuant to the provisions prescribed therein."

Although, therefore, no appeal lies against an award rendered in accordance with the Arbitration Law (Article 52), it can be nullified in accordance with the provisions of Article 53. As such, and as provided by Article 58 of the Arbitration Law, no application for the enforcement of an arbitral award will be accepted until the time period in which to seek a nullification has lapsed (90 days after the award has been issued).

The process to be followed is as set out in the Arbitration Law, as follows.

• Pursuant to Article 47 of the Arbitration Law, the Award Creditor in the arbitration is required to deposit the Arabic version of the award (either the original or a copy as translated) at the Court of Appeal's registry (if the arbitration has an "international trade" element to it) who will issue a receipt.
• As set out at Article 56 of the Arbitration Law, the receipt will then be appended to a further copy of the award (and a certified translation if not in the Arabic language), duly signed by the Award Creditor, and submitted to the President of the Court of Appeal along with a copy of the arbitration agreement (again with a certified Arabic translation, if required) requiring that the award be recognised and enforced in Oman.
• On the basis that the award:
  • does not conflict with a judgment previously rendered by the Omani Courts upon the subject matter of the dispute;
  • is not contrary to public order in the Sultanate of Oman; and
  • it was properly notified to the opposing party (Article 58 of the Arbitration Law),

it will be recognised as an Omani Judgment and, upon a further application to the Enforcement Division of the Primary Court, enforced as a final and non-appealable judgment pursuant to the provisions of the Commercial and Civil Procedural Law promulgated by RD 29 of 2002, as amended.

This is usually a simple "rubber stamping" exercise, (once the Enforcement Division has notified the debtor of the application and a seven day objection period has lapsed) although it is a very important one as, once approved, the Central Bank of Oman will be immediately notified to freeze all bank accounts of the debtor and, if this does not result in full enforcement of the award, a travel ban will usually be issued by the Royal Oman Police leading, if the judgment (award) is still not satisfied, to potential imprisonment of the debtor.

Concerning the exemption of being "contrary to public order", no legislative definition exists but guidance has been provided by the courts. In a judgment issued on 8 December 1993, the Court of Appeal described the concept of public order as (as translated):

"...those laws which go to public order are those whereby it is intended to accomplish a public interest – political, social or economic – which goes to the higher order of society and which transcends the interest of individuals. All individuals must respect such interest and the accomplishing of it, and they may not negate it by agreements entered into between them, even where such agreements accomplish interest for them, because private interests cannot prevail over the public interest."

Foreign Awards

The Arbitration Law has been in place for almost twenty years and Oman ratified the New York Convention back in 1999. The ratification included a reservation by Oman that the convention will only apply in relation to the recognition and enforcement of awards made in the territory of another signatory country.

Where an award is rendered by a signatory country, it will be enforceable in Oman provided that the grounds for refusal under Article V of the New York Convention are not present. A judgment confirming the same will need to be rendered in the Omani Enforcement Court.

The Sultanate has also signed a number of bilateral investment treaties providing recourse to arbitration under the International Centre for the Settlement of Investment Disputes, including with the UK, Austria, China, Egypt, France, India, Iran and Lebanon.

All in all, Oman is a relatively straightforward jurisdiction when it comes to the enforcement of foreign arbitral awards: the numerous treaties entered into by the Sultanate and its ratification of the GCC and New York Conventions provide clear enforcement guidelines for a significant number of jurisdictions. Further, in the absence of an Omani centre for arbitration, for many years arbitrations governed by the Arbitration Law were heard in neighbouring jurisdictions, making enforcement of awards issued outside of Oman, though in conformity with its laws, common practice.

In January 2016, the Oman Chamber of Commerce and Industry announced the establishment of Oman's first centre for commercial arbitration (the "Arbitration Centre"). The Arbitration Centre will offer investor security without the need to refer disputes further afield and will likely improve the ease in which arbitral awards may be enforced in the Sultanate.

Use of the Arbitration Centre is also likely to save costs and current investors in Oman may wish to amend current contractual dispute resolution provisions to select the Arbitration Centre as a dispute resolution venue.

Domestic Awards

Generally speaking, the procedure for enforcement of a domestic arbitration award in Qatar follows the same steps as enforcement of a domestic award in the UAE.

The Award Creditor needs to file a claim before the Qatar Courts and the claim will then proceed through the Qatar Courts system like any other claim. However, there are some key requirements that parties need to be aware of. The first is that pursuant to Articles 190 and 207(1) of the Qatar Law 13 of 1990 (the "Qatar Civil Procedure Law") there must be an arbitration agreement which names the arbitrators and there must be an arbitration deed. Obviously, it makes sense, where the arbitration agreement in the contract does not specify the identities of arbitrators (which it rarely will) to address both of these issues in an arbitration deed, which may also take the form of the terms of reference, at the outset of any arbitral proceedings. Failure to do so is almost certain to prove fatal to any enforcement action.

The second is that the original copy of the arbitral award must be deposited with the clerks' office of the court of original jurisdiction (i.e. the Qatar Superior Civil Court or the Commercial Court of the Qatar Financial Centre) within 15 days of being issued (Article 203). Thereafter, any appeal must be submitted to the competent court within 15 days of deposit of the original award (Article 205). Further, no appeal will be permitted where the arbitrator(s) have acted as "amiables compositeurs", i.e. with the authority to modify the effect of non-mandatory principles of law or where the right to appeal has been expressly waived.

Article 207 of the Qatar Civil Procedure Law sets out the grounds upon which a party may rely in order to request the annulment of a domestic arbitral award as follows:

• if the award is rendered without an arbitration deed, or is based on a void and null deed or which has lapsed by time limitation or if the arbitrator has exceeded the limits of the deed, or has violated any of the rules of the public order or morals;
• if the subject matter of the dispute has not been specified in the arbitration deed or during the hearing, if it is not permissible to submit the subject matter of the arbitration to conciliation or if a party did not have legal capacity to act (Article 190 of the Qatar Civil Procedure Law);
• if the arbitrator was a minor, incapacitated or deprived of his civil rights due to a criminal punishment or bankruptcy (unless he or she has been rehabilitated) (Article 193 of the Qatar Civil Procedure Law);
• if the award is rendered by arbitrators not appointed according to the law, or if it is rendered by some of them without being so empowered in the absence of full tribunal; and
• if there is something invalid in the ruling or in the proceeding that has affected the award.

Historically the Qatar Courts have taken a very anti-arbitration stance when considering whether arbitration awards, domestic or foreign, are enforceable by applying the grounds to annul awards liberally.

The Qatar Financial Centre ("QFC") was established in 2005. The QFC has its own jurisdiction (similar to that of the DIFC) and laws governing QFC seated arbitrations. In 2006, the Qatar Chamber of Commerce and Industry established Qatar’s first arbitral institution, the Qatar International Centre for Conciliation and Arbitration ("QICCA").

Foreign Awards

Qatar ratified the New York Convention in 2002 and, as a result, the approach to enforcement of foreign awards should have been consistent since the convention was ratified. However, historically the Qatar Courts have consistently applied Articles 379 to 383 of the Civil Procedure Law to foreign arbitral awards rather than restricting the issue of enforcement to consideration of Article V of the New York Convention.  In the past the Qatar Courts have held that an award was not enforceable where the arbitration agreement failed to explicitly state that the award would be final and binding, and was therefore open to appeal [12]. On another occasion, the failure to render the award in the name of His Royal Highness the Emir of Qatar was considered sufficient to allow the Qatar Civil Court not to enforce and award (although that judgment was overturned on appeal) [13].

Any application to enforce a foreign arbitral award must be made to the Qatar Superior Civil Court and must be accompanied by a summons for the other party to appear at the hearing (Article 379 of the Qatar Civil Procedure Law). Leave to enforce may be granted, subject to the Court verifying that the tribunal had jurisdiction and complied with the relevant procedures and provided that the award does not contradict any prior judgment of the Qatar Courts, rules of public order or good morals of Qatar (Article 380 of the Qatar Civil Procedure Law).

More recently it would appear that the Qatar Courts are moving towards a more liberal view. In a recent Court of Cassation case [14] the highest court in Qatar found that a foreign seated award under the ICC Rules was subject to the New York Convention and was, therefore, enforceable even though it did not satisfy the provisions of the Qatar Civil Procedure Law. The Court ruled that the award was only subject to Qatari procedural law at the enforcement stage. Whilst there is no binding form of precedent in Qatar, this judgment followed on the heels of two Court of Cassation decisions in March 2014 [15] where the Court applied the New York Convention and reinstated an ICC award which had been rendered in Doha which had previously been held to be void because the award was not rendered in the name of the Emir of Qatar.

These decisions are a welcome development in the jurisdiction, yet their full ramifications and whether the Qatar Court of Cassation will continue to take a pro-enforcement approach remains to be seen. Given the Qatar Courts' historically stringent approach, it is advisable to suggest that parties follow the Qatar Civil Procedure Law with caution when conducting arbitrations which may be enforced n Qatar.

It is also important to note that a new arbitration law for Qatar is currently in draft form. When published, the new law is expected to improve the current status of arbitration in Qatar and, of encouragingly, at present the draft law provides that all awards rendered under the new law will be final and not susceptible to challenge pursuant to the Qatar Civil Procedure Law.