UAE-India legal deal: Everything expats need to know

India's decision to declare UAE as a reciprocating territory for the Civil Procedure Code will deter debtors from absconding after committing fraud, said head of the Indian mission in Dubai to Khaleej Times on Monday, January 20.

On Saturday, January 18, the Indian Ministry of Law and Justice issued a gazette notification declaring the UAE as a reciprocating territory for the Code of Civil Procedure and identifying superior courts in the country, which in turn helps facilitating the execution of UAE civil court orders through Indian courts.

Following the ruling, legal experts and lawyers have welcomed the order issued on January 18, and have said the new rule gives a strong message to defaulters of loans.

'Finer details to become clear over time'

However, the finer details of how the rule will be put into practice are yet to be ascertained, said Consul General of India to Dubai Vipul. The Consul General said the new notification was the only remaining part to close the loop in a 1999 agreement between the UAE and India related to cooperation in civil and commercial matters.

"This is the last leg of the agreement on the Indian side and now the judgement of a UAE court can be executed through a district court in India," said Vipul. He added, "However, details of how it would be put into practice are yet to be seen and would become clear once people start putting the rule into use. The good thing is that you (the plaintiff) won't begin from zero in India."

The consul-general said issues also arise in matters of family settlements and divorce cases.

"For example, in a civil divorce case, if there is an ex-parte judgment in the UAE when the other party is not present, it is unclear if the order can still be executed in a district court in India. It also raises several other issues pertaining to family law, etc.," said Vipul.

'Step towards enhancing India - UAE cooperation'

"Overall, it is a good move. It shows the resolve of the Govt of India, and give a strong message to defaulters of loans that the government is not going to give them protection. This is also another step to enhance cooperation between UAE and India," said Ashish Mehta, founder and managing partner of Ashish Mehta and Associates.

Mehta said, "This new announcement is like old wine in a new bottle. It will boost confidence in the financial system; however, its effectiveness needs to be tested in the Indian courts." He said the ruling is particularly helpful towards banks that provide corporate loans. "Owners or shareholders of companies abandon their firms with large amounts of debt. Banks are not left with any or sufficient security to cover the debt," added Mehta.

He said, "Let all the details emerge. We can only wait to check how the Indian courts are going to judge this - effectiveness of successfully, promptly - in shortest possible time to enforce these judgements in courts." A loophole that absconders could use is contending that they were not given a chance to represent themselves before UAE courts, said Mehta.

Another lawyer based Simble Krishnaraj, a lawyer from India said, "The biggest benefit with this rule is that the plaintiff does not need to file another suit in India." However, there are several loopholes. She said, "If the accused files a petition to set aside an ex-parte order, then the the court has to hear the case from the start."

Everything you need to know about most recent UAE- India legal deal

Q: Can you explain the new rule in a nutshell?

A: Now, civil judgments of UAE courts are enforceable in India as the central government declared UAE to be a reciprocating territory under section 44A of CPC. This means that the decrees passed by the superior courts of UAE can be now enforced in India as if they have been passed by the local courts in India.
The government of India has declared the following in UAE as superior courts - Federal Supreme Court; Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah. The local courts are - Abu Dhabi Judicial Department; Dubai Courts; Ras Al Khaimah Judicial Department; Courts of Abu Dhabi Global Markets; and Courts of Dubai International Financial Center.

Q: Is the new rule going to established with immediate effect?

A: It was in effect earlier, however, now the various Superior Courts in the UAE have been specified by the Government of India.
To be accurate, in 1999 UAE and Indian entered into a treaty in civil and commercial matters for the service of summons, executions of judgements and arbitral awards. However, earlier cases filed for execution of judgement has been refused by Kerala High Court since the courts were not specified.

Q: Can UAE civil verdicts be executed through district courts in India? If yes, how? What procedure will the court follow?

A: Yes, it can be executed in district courts in India. The Request for legal assistance for the execution of a decree shall be made through the Ministry of Justice, UAE with the following documents duly authenticated by Ministry of Justice:
· An official copy of the decree.
· A certificate showing that the decree is final and executable unless the same is provided in the decree itself.
· A certificate from the court stating the extent, if any, to which the decree has been satisfied and/or adjusted.
· In case of a decree in absentia, an authenticated copy of the summons or any other document showing that The defendant was duly served with the summons.
· An official copy in a proper executable form, if the request is only for the execution of the decree.
· English translation of the decree

Q: What kind of verdicts can be, and will be executed? Media reports suggest civil and commercial cases that are financial in nature and divorce cases as well - please expand.

A: Yes, civil and commercial cases, as well as divorce cases, can be executed. Article XV 1 of UAE INDIA Treaty 1999 states: Each of the Contracting Parties shall, in accordance with its laws, recognise and/or execute decrees passed by the Courts of the other Contracting Party in civil, commercial and personal matters and by criminal courts in civil matters.

Q: Is the rule pertaining to only new cases? Or can older cases be pulled up as well?

A: Given that the treaty is in existence since 1999, we expect older cases would be covered as well. This point requires some clarification.

Q: Can the defendant appeal his or case to a higher court in India, or does he have to appeal to a court in the UAE?

A: He can file objection to the execution court in India, as per Rule 2 (e) of Civil Rules of Practice "Execution Petition" means a petition to the Court for the execution of any decree or order.

Q: Is it true that only an Indian national petitioner (individual and organisation) can get a decree of the UAE executed in India? Can non-Indians petition as well? For example - banks and companies that are owned by UAE nationals?

A: Non-Indians can petition as well including banks and companies. Only the judgment debtor has to be Indian national.

Q: Can you comment on the issue of attachment of the defendant's assets in financial cases?

A: The assets in the name of the defendant can be attached in financial cases. All execution petitions in India against persons can issue arrest orders but if the person is not having any assets, he can give the petition to declare bankruptcy.

Q: Depending on the case, will this give power to the plaintiff to extradite individuals?

A: Extradition is applicable for criminal cases only, not civil/commercial cases.

(Responses from Bini Saroj, senior legal consultant with Khalifa bin Huwaidan Alketbi Advocates)