Dispute resolution in Abu Dhabi – Part 2 – Litigation in the Courts

In this Part 2 of our 3 part series on dispute resolution in Abu Dhabi, we look at the advantages and disadvantages in litigating cases in the Abu Dhabi Courts.

 The Abu Dhabi Judicial Department has a vision.  That vision is to create an efficient and independent judicial system to provide world class services to litigants.  To this end various changes have been introduced to the Abu Dhabi Courts since they became independent from the Federal Court system following Abu Dhabi Law 23 of 2006 coming into force.  While most of the changes are largely unseen, and are focused on systemic and structural changes to the Judicial Department, the changes have had direct and positive impact on Court users in the Emirate of Abu Dhabi.  The changes have included, amongst other things, a reduction in Court fees; new facilities and increased training of judicial officers; the introduction of specialist Courts and appointment of full time Court experts; the increased use of technology in case management and on-going performance monitoring at all levels of the Abu Dhabi Judicial Department.

The purpose of this article is to highlight some of the advantages and issues when litigating in the Abu Dhabi Courts, taking into account the recent changes, and in the context of other forms of dispute resolution available in the Emirate of Abu Dhabi.  

Advantages of litigating in the Abu Dhabi Courts

Reasonably fast decisions

Following the introduction of both administrative and computer systems to manage cases, and the ongoing monitoring and performance management of judicial officers (including Judges), cases progress relatively quickly through the Abu Dhabi Courts.  It is now not uncommon for disputes to be resolved (including appeals to the Court of Appeal) in less than a year. In the circumstances, particularly where the issues in dispute are relatively simple, disputing parties are able to obtain a resolution of their dispute far quicker than may be the case if they were to rely on other forms of local dispute resolution such as, for example, arbitration.

The costs of prosecuting a claim

It is reasonably cheap for a claimant to prosecute a claim in the Abu Dhabi Courts.  Court fees, which are determined on a sliding scale based on the value of the claim, are capped at a maximum of AED 20,000.  The Abu Dhabi Courts deal with disputes by having regard to the papers that the parties have submitted. Hearings are relatively short and there is seldom the need for lengthy common law style oral hearings.  Claimants that have a properly documented claim are therefore likely to incur significantly less legal costs than may be the case in other jurisdictions, or if the dispute is resolved by arbitration (where ordinarily the Tribunal's fees are paid by the parties). 

Attachment orders

Perhaps one of the most important tools available to a litigant in the Abu Dhabi Courts is the procedure whereby a litigant is able to attach the UAE assets of a counter-party in circumstances where it is suspected the counter-party may dissipate its assets.  Such Precautionary Attachment Orders can only be obtained through the UAE Courts and, by obtaining such an attachment, a Claimant is able to obtain security to ensure that the counter-party retains sufficient assets for a judgment to be enforced. 

Less open to procedural abuse

Judges are granted authority by the Civil Procedure Code to manage cases and regulate proceedings.   In order to avoid incurring the displeasure and censure of the judges, parties involved in court proceedings are less likely to misuse the court procedure for their own purposes.  In addition, as the Abu Dhabi Court Judges are subject to performance monitoring, presiding Judges are often also more focused on finalizing the matter than may be the case in say arbitration where parties are more often granted procedural latitude to avoid the Tribunal's award subsequently being challenged when enforcement is sought. 

Easy local enforcement

A final and enforceable award of the Abu Dhabi Courts offers the best chance of enforcement against assets located in Abu Dhabi, and even in the other UAE Emirates.  This is in sharp contrast to, for example, arbitration and the awards of foreign courts, the enforcement of which is challenged in nearly all circumstances where execution is sought. 

Limited exposure to adverse costs awards

In general, Abu Dhabi judges will only award a nominal amount to a successful claimant.  This is often advantageous for defendants.  With limited exposure to adverse costs awards, a defendant can defend a claim and assert his rights without the concern or risk of being faced with a large costs award in the event a defence proves unsuccessful. 

Disadvantages and issues to consider when litigating the in Abu Dhabi Courts

Difficult to settle proceedings once commenced

As is highlighted above, there is little risk in Abu Dhabi court proceedings of an adverse costs award.  Consequently, once proceedings have commenced, there is little incentive for a party to settle as litigating parties do not run the risk of being faced with a large costs award, even where they run defences or claims which lack a proper factual or legal basis.  The manner in which Abu Dhabi advocates generally structure their fees also negatively influences the incentive to settle, as a large percentage of the fee is generally payable upfront and the remainder becomes payable at the conclusion of the matter and irrespective of whether the matter is settled or a judgment is handed down.  The fact that there is an automatic right of appeal from the Court of First Instance to the Court of Appeal also means that, even if proceedings are not going particularly well for a party, there is always the ability to have a second attempt.

Not ideal for complex cases

The introduction of systems to monitor the performance of judicial officers has resulted in judges and experts attempting to resolve matters as expeditiously as possible.  An unwanted secondary effect is that very short time limits are given to litigants to respond to pleadings and submissions.  Due to the manner in which claims are brought before the Court and evidence is led, there are also limited opportunities to present expert evidence.  These issues all create difficulties for the parties, particularly where cases involve technical issues or complex commercial transactions where the original documents were not drafted in Arabic; the codified law does not deal with the relevant issue in dispute; and complicated concepts need to be explained to the Court or expert. 

Document disclosure

Documents play a critical role in cases before the Abu Dhabi Courts and are the most important form of evidence relied on by the Court.  Notwithstanding the importance of documents, there are limited circumstances to request the disclosure of documents. Choosing another forum for the resolution of a dispute, say arbitration where the parties have agreed to arbitral rules that allow for disclosure, may be a better option where access to documents held by an adversary is required.

The need for translations

Any documents presented to the Abu Dhabi Courts, which were originally drafted in another language, are required to be translated into Arabic by a licensed legal translator.  This means that translations must be sourced of all documents that are intended to be relied on and that were not drafted in Arabic (which is common, for example, in construction disputes).  Obtaining such translations can prove costly in circumstances where there are large volumes of documents, and may also prove difficult if translations have to be obtained in very limited periods of time between meetings with an expert/court hearings.

Limited experience of adjudicators in relation to specialist subjects 

The Abu Dhabi Judicial Department has introduced a split bench where specialist judges have cases in particular industry sectors such as construction and medical claims.  The Judicial Department now also employs full time Court experts in certain fields (e.g. engineering).  However, due to the complexity of modern commerce, it is simply not possible for judges and experts to be specialised in relation to all potential areas where disputes may arise.  Arbitration, where the parties are able to choose an adjudicator with specialist expertise, may be more appropriate where the dispute deals with technical matters that require specialist knowledge of that particular industry.

Enforcement abroad

A judgment from the Abu Dhabi Courts is relatively easy to enforce in the UAE.  However, enforcing UAE judgments abroad is far trickier.  Whether an Abu Dhabi judgment can be enforced abroad depends on the laws applicable in such jurisdictions and whether the foreign state has a bilateral treaty with the UAE.  The UAE has entered into bi-lateral treaties with a number of states but many important jurisdictions such as the United Kingdom and the United States have no such treaties.  By contrast, arbitral awards can be enforced pursuant to the New York Convention in other Convention States of which there are currently over 140. 

Conclusion

There are both advantages and disadvantages in litigating cases in the Abu Dhabi Courts.  Parties that are considering the form of dispute resolution most appropriate for their dispute will therefore be well advised to consider the likely nature of the dispute and the issues they will face in trying to prove and enforce the award/judgment if their claim is successful.  What is clear is that there are a number of circumstances where court proceedings before the Abu Dhabi Courts will be the preferred forum. The coming into effect of Abu Dhabi Law 26 of 2006, and subsequent programmes to modernise and improve the Abu Dhabi Courts to create a more efficient system for users, are therefore welcome developments.

Should you have any questions in connection with this article or the legal issues it covers, please contact Richard Bell or Alfred Thornton.