REPEAL OF UAE CIVIL PROCEDURES LAW ENCOURAGES FOREIGN INVESTORS TO EMBRACE LOCAL COURTS SYSTEM

2023 heralds the introduction of a wide range of new legislation in the UAE, including sweeping changes to laws affecting non-Muslim marriages, the introduction of a social security programme protecting public and private sector worker’s unemployment rights and the arrival in Q2 of corporate tax on income above AED 375,000.

Amidst the flurry of media interest focussed on legal changes closer to home, the radical repeal and replacement of Federal Law No. 11 of 1992 regarding Civil Procedures Law and its implementing regulations by Federal Decree Law No. 42 of 2022 (the “2023 BPL”) as of 2 January 2023 has received a more discreet audience.

However, the ramifications of the key legislative changes introduced by the 2023 BPL are likely to boost confidence in foreign investors who have traditionally perceived the UAE courts as a challenge from a procedural and enforcement perspective and highlight the continuing commitment of the UAE to align its judicial system with best international practices.

Below is a summary of the key legislative changes which have a positive impact on cost and timing expediency for foreign investors:

English language replaces Arabic as the language of the UAE courts
Historically, all documentation submitted to the onshore UAE courts has been required either to be in the Arabic language or in its original language accompanied by a sworn legal translation into Arabic. This presented a number of timing and cost challenges for litigants in the UAE courts, not to mention the possibility for substantive legal issues to be “lost in translation” due to nuances between the different languages and was an additional factor for foreign investors to favour the DIFC and ADGM courts despite consequential enforcement intricacies.

The 2023 CPL boldly eradicates these issues by requiring that all procedural aspects of dispute resolution and documentation submitted to, and judgments handed down by, the UAE courts shall, with effect from 2 January 2023, be in the English language, albeit with the caveat that certain cases are still subject to the discretion of the President of the Federal Judicial Council or the President of the Local Judiciary.

Extra-jurisdictional service of process
In the absence of a reciprocal treaty between the UAE and the relevant jurisdiction for service of legal process, extra-jurisdictional service was, prior to the introduction of the 2023 CPL, complicated by cumbersome and often costly notarisation and legalisation requirements, often necessitating the instruction of third party service providers in both jurisdictions.

The 2023 CPL has significantly simplified the service of legal process by the introduction of a new procedure whereby extra-jurisdictional service is deemed to be effected 21 working days from the date of notification by the Ministry of Foreign Affairs to the relevant authority in the recipient jurisdiction. There is no longer a requirement for the relevant authority to confirm receipt of notification in order for service to be considered effective.

New Court of Appeal Review Procedure
The 2023 CPL has empowered the Court of Appeal to review appeals via a new procedure which gives the Court of Appeal 20 working days either to issue its decision for rejecting an appeal or to set a hearing date for the appeal.

This new procedure has a two-fold aim of easing the administrative burden on the Court of Appeal, allowing it to filter appeals and dismiss those which it considers to be vexatious or without merit and encouraging appellants to consider the merits of an appeal carefully before potentially incurring unnecessary legal costs and court time.

Reduction of Court of Cassation Appeal Time
The 2023 CPL has introduced an additional initiative to save court time and mitigate against the filing of vexatious appeals by halving the time limit to lodge an appeal with the Court of Cassation from 60 to 30 days for cases filed/judgments issued after 2 January 2023.

Please contact Natalie Boyd for further information on the contents of this article.